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ACCC guide reveals do’s and don’ts of carbon price claims

Monday, 28 May 2012 | By Michelle Hammond

Start-ups now have no excuse for breaking the rules with regard to the carbon tax, after the competition watchdog launched an updated guide and a series of videos on carbon price claims.

 

Dr Michael Schaper, deputy chair of the Australian Competition and Consumer Commission, released a business snapshot summary of the updated guide at a conference in Hobart last week.

 

“[Now] is a timely opportunity for businesses to consider what claims they want to make about the impact of the carbon price, and the need to do so with a reasonable basis,” Schaper said.

 

In response to industry consultation and feedback, the ACCC has revised its business guidance and released web videos to further assist businesses in understanding their rights and obligations.

 

The updated guide, titled Carbon price claims – Guide for business, addresses issues arising out of engagement with industry associations and small business.

 

It includes information to support carbon price claims and on dealing with suppliers.

 

The guide also provides more practical guidance on specific issues experienced by small businesses, and gives examples to illustrate how the guidance applies in practice.

 

“To date, the issues concerning small businesses generally fall into the category of ill-informed statements about the impact of the carbon price on their costs and prices,” Schaper said.

 

“The guide seeks to assist businesses with the key issues to consider when making a carbon price claim.”

 

Schaper stressed it is “business as usual” in the sense that businesses are entitled to increase their prices “as they see fit”.

 

“Leading up to and following the July 1, 2012 start of the carbon price, the same legal obligations not to mislead or deceive apply,” he said.

 

Here’s a list of the do’s and don’ts on the carbon tax, as told to SmartCompany:

 

 

Do

 

Be truthful and reasonable 

 

If a business claims that a price rise is linked to the carbon price, the claim must be truthful and have a reasonable basis, the ACCC says.

 

Get invoices in order  

 

Before making a claim about the impact of carbon prices, business should consider invoices showing the impact of the carbon price on supply chain or business input costs; invoices or notices showing the impact of the carbon price on the cost of services such as gas and electricity; and invoices and other information showing the impact on products or services before and after a price change.

 

Consider other information sources  

 

Before making any claims, businesses should also consider calculations from an appropriate business calculator that considers increased costs relevant to a particular business, information from professional advisers or consultants such as accountants, and information from industry associations and the government.

Be careful talking to competitors 

 

Be careful when talking to competitors, as businesses must determine carbon costs and prices independently from competitors.

 

Businesses must avoid discussions and, most importantly, agreements with competitors about the price impact of the carbon price.

 

Wait until July 1 to adjust prices 

 

Schaper says the impact of the carbon tax is difficult to calculate, so it may be “easiest” for businesses to wait until July 1 to adjust prices.

 

 

Don’t

 

Make price lists which incorrectly link all price increases  

 

The ACCC warns businesses should not incorrectly link all price increases to the carbon price on price lists.

 

Allow comments by sales representatives that incorrectly link all price increases 

 

Comments by sales representatives that incorrectly link an increase in the price of goods or services to the carbon price are illegal.

 

Enter into contracts, arrangements or understandings with competitors on price 

 

It continues to be illegal to enter into any contract, arrangement or understanding with other businesses relating to the price of the goods or services or any price adjustments, including those attributable to a carbon price.

 

This story first appeared on SmartCompany.

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