Profiteering and price gouging during disasters

Prices for basic goods—like face masks, bottled water, bread, milk, fruit, vegetables and petrol—might increase during a health emergency or after a natural disaster.

This often happens because:

• it costs businesses more to get goods into their shops—businesses may have to transport their goods further due to road closures or fly goods into town
• the supply of goods can be impacted—short supply increases demand, which lifts prices.

For example, in 2011 Cyclone Yasi destroyed 75% of North Queensland's banana crop when it passed through the area. Bananas were still available from other growers around the country, but the reduced supply forced up demand. This led to higher prices.

A business can set any price it chooses for its goods or services. The government won't interfere unless there's evidence of illegal conduct (e.g. collusion) or unconscionable conduct.

Unconscionable conduct by businesses

Unconscionable conduct is a statement or action so unreasonable it's not considered acceptable behaviour in society. Unconscionable conduct is against the law.

Business behaviour may be considered unconscionable if it is harsher or more overbearing than reasonable commercial bargaining.

Businesses must not act unconscionably when selling or supplying goods and services to (or buying from) a customer or small business. A price increase on its own does not constitute as unconscionable conduct.

Examples of unconscionable conduct

Unconscionable conduct often includes a combination or extreme examples of:

• not properly explaining the conditions of a contract to someone who doesn't speak English or has a learning disability
• not allowing someone enough time to read an agreement, ask questions or get advice
• using a customer’s friend or relative to influence their decision
• making a customer sign a blank or one-sided contract
• making false statements about the real cost of a loan
• failing to disclose key contract terms
• using high-pressure tactics (e.g. refusing to take 'no' for an answer).

Penalties for unconscionable conduct

If found guilty of unconscionable conduct, the maximum fines are:

• for a corporation, the greater of either
  • $50 million
  • 3 times the value of the benefit obtained
  • 30% of adjusted turnover during the breach period (if the court can't determine the benefit obtained from the offence)
• for an individual $2.5 million per breach.