The Australian Competition and Consumer Commission views with concern the recent rail bridge damage near Katherine in the Northern Territory and the disruption in freight supplies to Darwin that has resulted. Whilst acknowledging that business costs increase from time to time, and businesses are free to set their own prices, businesses should not misrepresent the impact of the derailment on their prices.
"Traders must ensure they don’t mislead consumers about the reasons for price increases," ACCC Chairman Rod Sims said.
"Price rises unrelated to the recent derailment should not be blamed on the lack of trains. If a company makes a claim regarding the increase in their prices or about the size or nature of any surcharge to be levied, they need to make sure that claim is accurate."
Consumers and businesses may notice increases in the price of basic goods and services if supply chains are disrupted following natural disasters. This may happen because:
- it costs traders more to get goods into shops – for example, they may have to transport goods further due to road or rail closures, or use other ways to transport goods such as by air, which means increased costs,
- supply and demand – prices go up when there is a lack of goods or services, and greater demand.
The Australian Consumer Law provides the ACCC and NT Consumer Affairs with powers to investigate the accuracy of claims about the impact of natural disasters.
The ACCC is watching this issue closely in the Northern Territory and will be in contact with major companies where there are concerns that they may be making false or misleading claims about the impact of this recent event.
Consumers and businesses are also encouraged to shop around and also to ask companies to justify prices and surcharges which appear to be unreasonably high.