Be careful when blaming the carbon tax!

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By Watkins Tapsell.

So, the carbon tax is here and the price of goods and services are going up…or are they?
Many business owners have assumed that the carbon tax will affect the selling price of their goods and/or services and have hiked up prices – but have they investigated whether this is really the case?

The Australian Competition and Consumer Commission (ACCC) are cracking down on those businesses that are using the carbon tax as an excuse to bump up their prices. The Australian Consumer Law clearly states that misleading and false representations and testimonials are an offence and monetary penalties may apply.
More recently, a South Australian refrigeration contractor namely, Equipserve Solutions, sent an email to their customers which stated the following:
“As you would be aware the Labour Government has introduced the carbon tax effective 1 July 2012, this will affect us all in many different ways…

Before the carbon tax the price of R404A Refrigerant Gas was $98.00 per kilo (plus GST)
After the Carbon Tax the price of R404A Refrigerant Gas is $395.00 per kilo (plus GST)…
Sorry for the bad news, but this is out of our control and is a (sic) Australia wide increase.”
Equipserve were ultimately tracked down by the ACCC and admitted to:

1. Not having conducted any analysis in relation to the impact of the introduction of the carbon tax; and

2. Not being able to substantiate the increase from $98.00 to $395.00 per kilo for the refrigerant gas.

As a result, Equipserve were required to provide a highly embarrassing undertaking to publicly withdraw the comments along with a requirement to engage in an intense compliance program.
This may have all been done with a genuine belief that the carbon tax truly was going to have a significant impact upon business, but belief is just not enough when you have the Australian Consumer Law to comply with.

No doubt you do not want your business to undergo the scrutiny of the ACCC, which can have such adverse affects upon the reputation of your business. Be sure to seek professional advice in relation to any comments you may make about the impact the carbon tax (or any other issue) may have on your business.
For further information contact our Commercial Litigation Team

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