Preparing for Australia's new unfair trading practices regime
Australia's consumer protection framework is undergoing one of its most significant reforms in recent years. The new unfair trading practices regime will introduce broad obligations that affect how businesses market, sell and deliver products and services, with particular relevance for food and beverage businesses that engage directly with consumers.
Key takeaways
- Australia's new unfair trading practices regime expands the scope of the Australian Consumer Law (the ACL), introducing a broad general prohibition on unfair trading practices and new rules targeting drip pricing and subscriptions.
- Food and beverage businesses should review policies, customer journeys, promotional campaigns, disclosures, interface design and checkout flows for potential risks ahead of the new regime commencing on 1 July 2027.
- Penalties for non-compliance are significant, with the maximum penalty for corporations being the greater of $100 million, three times the benefit obtained or 30% of adjusted turnover during the breach period.
The new general prohibition on unfair trading practices
The Federal Parliament has passed new laws introducing a general prohibition on unfair trading practices, which will commence on 1 July 2027. The prohibition targets conduct that manipulates consumers or unreasonably distorts consumer decision-making, capturing practices that may not clearly fall within the existing ACL prohibitions on misleading conduct, unconscionable conduct or unfair contract terms.
A contravention will occur if conduct:
- does, or is likely to, manipulate the consumer or unreasonably distort the environment in which the consumer makes (or is likely to make) a decision; and
- causes, or is likely to cause, detriment to the consumer (financial or otherwise, including wasted time, inconvenience or other negative impacts).
The legislation includes a non-exhaustive list of practices that may contravene the new prohibition, including:
- failing to disclose material information;
- presenting information in a complex or confusing way;
- impeding the consumer's ability to exercise their legal rights or seek legal remedies; and
- creating decision-making environments that place consumers under unreasonable pressure.
The prohibition applies to the supply of, or offer to supply, goods or services to consumers in both online and offline settings. In the food and beverage sector, the new laws have implications for retailers and manufacturers alike. However, the prohibition does not apply to B2B conduct, though the Government has commenced consultation on a possible extension to some B2B dealings.
The new requirement to display transaction-based charges
The reforms also introduce new obligations targeting 'drip pricing', the practice of progressively adding fees during a transaction rather than disclosing them up front.
The new requirements apply where a business displays a base price but a separate transaction-based charge (such as a delivery or postage fee) may also be payable. Payment surcharges, taxes and duties, charges imposed on the supplier and other prescribed charges are excluded.
Where the new requirements apply, businesses must disclose the following information about any transaction-based charges near the base price prominently, legibly and unambiguously:
- the amount of the charge (or how it is calculated);
- that the charge is a per-transaction charge;
- whether the charge is payable (eg, if a fee applies for delivery but not for pickup); and
- whether the base price already includes the charge.
Businesses that charge delivery, service or handling fees should review how those charges are displayed across websites, mobile applications, advertising and ordering platforms. For manufacturers, this may include direct-to-consumer sales channels, branded online stores and promotional campaigns that advertise products at a particular price where the purchase may incur extra transaction-based charges.
The new obligations for subscription services
The reforms also introduce new disclosure, notification and cancellation requirements for consumer and small business subscription contracts that automatically renew or continue unless the customer takes action to cancel. The new rules will likely apply to a range of food and beverage subscription models operated by both manufacturers and retailers, including:
- subscription contracts with an indefinite period that continue until cancelled (eg, a subscription that delivers a new bag of coffee each month);
- fixed-term subscription contracts that automatically renew unless cancelled before expiry (eg, a paid loyalty or rewards program with an annual membership fee that automatically renews for a further term);
- free-trial subscription contracts that automatically convert into a paid subscription unless cancelled before the trial ends (eg, a 14-day meal-kit trial that rolls onto paid weekly deliveries); and
- introductory discount subscription contracts that automatically continue at a higher price unless cancelled before the discount period ends (eg, a branded snack box subscription offered at a discounted rate for the first three months).
Before customers sign up, businesses will be required to provide clear and prominent information about payment obligations, subscription periods, renewal arrangements, notice requirements and cancellation rights. Ongoing notification requirements during the life of a subscription may also be introduced by future regulations.
Importantly, businesses must provide customers with an easy-to-find and straightforward cancellation process. Cancellation pathways must not be unnecessarily burdensome and, where customers can subscribe online, businesses will generally be required to provide an online cancellation option.
Implications for businesses in the food and beverage sector
The new unfair trading practices prohibition is likely to have significant implications for businesses in the food and beverage sector, from manufacturers to retailers, particularly given the sector's reliance on promotions, loyalty programs, personalised offers and digital sales channels. Businesses may face increased scrutiny where promotions create a false sense of urgency or otherwise place consumers under unreasonable pressure to make purchasing decisions.
In practice, the reforms are likely to affect a range of businesses, including online grocery retailers, alcohol delivery services, meal-kit providers, food delivery platforms and manufacturers that run consumer-facing advertising campaigns and loyalty or rewards programs. Potential risk areas include the use of online countdown timers, 'limited stock' claims and 'confirm shaming' prompts designed to pressure consumers to immediately purchase products to avoid missing out on rewards or discounts, as well as the disclosure of mandatory delivery or processing fees only at the final stages of checkout. Subscription-based services, including wine clubs or meal-kit subscriptions, may also attract scrutiny where cancellation processes are difficult to find or navigate.
ACCC enforcement: a preview of things to come
The ACCC has long advocated for unfair trading practices reform, and its recent enforcement activity under the existing ACL prohibitions highlights the types of conduct that would likely attract scrutiny under the new regime:
- Dendy Cinemas: In June 2025, the company agreed to pay a penalty of $19,800 after the ACCC issued an infringement notice alleging that it had engaged in drip pricing by failing to prominently display the total movie ticket price online and disclosing an unavoidable per-ticket booking fee only at the final stage of checkout.1
- HelloFresh and Youfoodz: In December 2025, the ACCC commenced proceedings against both meal-kit providers, alleging that consumers were given the false impression they could easily cancel their subscriptions online before a specified cut-off date to avoid receiving or being charged for their first delivery. The ACCC alleges that online cancellation was either unavailable or ineffective, requiring consumers to contact customer service instead. According to the ACCC, this conduct left consumers inadequately informed when signing up, frustrated when attempting to cancel and out of pocket for unwanted deliveries.2 These proceedings are ongoing.
The proceedings against HelloFresh and Youfoodz are a particularly timely reminder to subscription-based food and beverage businesses that inadequate cancellation processes are a live enforcement risk.
What food and beverage businesses should do now
With the reforms due to commence on 1 July 2027, all food and beverage businesses should begin assessing potential risks now. These actions include:
- reviewing customer journeys, consumer-facing advertising and promotional campaigns in online and offline channels to assess how customers interact with key decision points and whether any aspect of the customer experience could influence decision-making in a way that may attract scrutiny under the new prohibition;
- reviewing how prices are displayed to ensure transaction-based charges sit near the base price in a legible, prominent and unambiguous manner;
- reviewing subscription disclosures and paid loyalty or membership program terms to ensure that they clearly set out contract periods, cancellation steps, renewal policies, notice periods and payment information;
- simplifying subscription and paid loyalty or membership program cancellation processes to ensure steps in the cancellation processes are 'reasonably necessary'; and
- assessing contracts with small business counterparts, as the exit and notification requirements for subscription contracts extend to small business subscribers as well as consumers.