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Pricing hints for business

SINCE July 1, operators of cafés, takeaways and restaurants have been over-represented by complaints to the GST Pricing Line. For this reason, the ACCC has issued some handy hints on pricing.

The GST News For Business No. 5 publication, available on the ACCC web site, gives examples of tax-related cost savings and explains why price rises of more than 10 per cent can, and have, led to ACCC investigations.

Any savings resulting from the new tax system should be passed on to consumers.

For example, soft drink used to attract 22 per cent wholesale sales tax.

When this was abolished on July 1, the cost of soft drink generally fell, even after adding GST.

Supermarkets’ July 1 soft drink prices were about 7 per cent lower on average than in June.

Businesses, particularly cafés, takeaways and restaurants, are also reminded that it is not appropriate to add the GST to the bill at the cash register, or have something like “plus 10 per cent GST” at the bottom of the menu.

This may mislead consumers and breach the Trade Practices Act.

Prices charged to customers from July 1 include GST, so the prices displayed on menus, signs and blackboards should reflect this.

Make sure staff are ready to answer customer questions and explain price changes.

This will help retain customer loyalty and reduce the likelihood of complaints.

Failure to deal adequately with customer inquiries and concerns has already led to enforcement action by the ACCC.

The ACCC is following up all valid complaints to ensure price exploitation does not occur.

To make a complaint or get more information about price exploitation ring the GST Pricing Line on 1300 302 502 or visit the web site at http://gst.accc.gov.au

n Professor Allan Fels is chairman of the Australian Competition and Consumer Commission.

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