ACCC to crack down on businesses making misleading representations over carbon tax

The Australian Competition and Consumer Commission has initiated proceedings in the Federal Court against a refrigerant gas business on the grounds of deceptive conduct.

The ACCC alleges Actrol Parts Pty Ltd made misleading representations about significant price increases effective from July 1, 2012, the date which the carbon tax scheme came into effect.

The competition watchdog also alleges Actrol contravened Australian Consumer Law by “amassing a stockpile” of refrigerant gas prior to the implementation of its price increases in order to increase its earnings.

In a statement, ACCC chairman Rod Sims said the commission takes these matters very seriously.

“This case is a further demonstration of the role of the ACCC in scrutinising claims made by all levels of business in relation to the introduction of the carbon tax, and taking enforcement action where appropriate,” he said. “The ACCC will be equally vigilant in monitoring the practices of businesses following the repeal of the carbon tax.”

Sally Scott, partner at Hall & Wilcox Lawyers, told SmartCompany the ACCC began focusing on misleading carbon tax claims when the price on carbon was introduced several years ago.

“The ACCC would expect that businesses ought to be on top of representation issues concerning the carbon tax by now, being several years after the introduction of the carbon tax,” she said.

“Businesses need to ensure that if they link a price rise to the carbon tax, they can substantiate the link. They should also retain evidence so that they are in a position to prove the link if necessary.”

The ACCC today released a carbon monitoring report for the March 2014 quarter. Treasurer Joe Hockey has directed the ACCC to monitor the prices, costs and profits across various sectors in order to assess the general effect of the carbon tax.

Sims said in a statement the watchdog will monitor prices closely when the government fulfils its election promise to remove the price on carbon.

“This information will permit the ACCC to understand how the carbon tax has affected price tags across the economy,” he said. “It provides a benchmark to allow the ACCC to compare prices charged to consumers both before and after the carbon tax is removed.”

Sims says the purpose of monitoring the effects of the carbon tax scheme is to ensure a reduction in costs is passed on to consumers if the government successfully repeals the carbon tax.

“The ACCC expects that after the repeal of the carbon tax businesses will remove any remaining carbon components in prices and that consumers will see the benefit of the repeal as quickly as possible.”

There is intense disagreement between politicians over whether or not the carbon tax affects small businesses. A survey of 400 Australian businesses conducted last year by Ai Group found 70% of them had not been able to pass on any energy cost increases to consumers –resulting in tighter profit margins.

Council of Small Businesses of Australia executive director Peter Strong previously told SmartCompanythere were more serious concerns for small businesses than the carbon tax.

“Every extra cost impacts small business,” he said. “But the bigger issues still remain red tape, contract laws, the duopoly of Coles and Woolworths, landlords and workplace relations and penalty rates.”

SmartCompany contacted Actrol for comment but did not receive a response prior to publication.