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Carbon costings: how to stay on the right side of the ACCC
Carbon and Environment Daily

Check your facts before attributing price rises to carbon costs and take care with pre-July 1 offers to 'beat the tax', says a new ACCC guide for business on carbon price claims.

Examples of misleading claims described in the guide include overstating the effects of a carbon price and wrongfully claiming that the whole of a price increase is due to it.

Statements encouraging customers to 'buy now before the carbon tax bites' must be made in a way that "do not overstate the savings to be made by purchasing before the introduction of a carbon price", the guide says.

"If your business prices will not increase by much at all due to a carbon price you should be very cautious about making these types of claims," it says.

If a business finds its costs have increased, but cannot confirm the reason, it must not attribute any increases in its own prices or fees to the carbon price.

"If your statements exaggerate the saving to be made, they will be misleading under the Act." 

Seek independent advice or compare various information sources
Approaches endorsed by the ACCC guide include obtaining independent advice to assess likely increases flowing from carbon pricing.

Alternatively, a business could use information from sources including utility bills, supplier invoices and statements, carbon price calculators and organisations and agencies that routinely provide it with business advice.

However, a business using this type of information should consider factors including its consistency with impacts predicted by government and industry associations, and whether it takes into account the effects of "any carbon price-related rebates or assistance available to you or your suppliers".

As an illustrative example of a business that follows appropriate procedures, the guide describes a bakery that on July 1 alerts customers that prices for some products will increase by five cents on August 1 due to the carbon price.

The bakery has calculated its increase on the basis of a letter from an ingredient supplier and a notice from its energy retailer.

"The business has also compared its proposed price increase with information provided by the government and its industry association and finds its increase to be in line with expectations.

"By taking care to compare the information available from different sources the business has avoided the risk of misleading its customers," the guide says.

If a business finds its costs have increased, but cannot confirm the reason, it must not attribute any increases in its own prices or fees to the carbon price, the guide says. 

The story is publishd with permission. It was first published on 16 November 2011 in Carbon and Environment Daily.