Watchdog looks at bakery carbon tax memo

The consumer watchdog is looking into an internal newsletter sent to bakery chain Brumby’s franchisees suggesting they raise prices and “let the carbon tax take the blame”.

The advice from Brumby’s managing director, Deane Priest, revealed by The West Australian newspaper on Wednesday, says stores can make more money by blaming the carbon pricing scheme which started on July 1.

“We are doing an RRP (recommended retail price) review at present which is projected to be in line with CPI (consumer price index), but take the opportunity to make some moves in June and July,” Mr Priest wrote in the June edition of Backmix, an internal publication.

“Let the carbon tax take the blame, after all, your costs will be going up due to it.”

The Australian Competition and Consumer Commission says it’s making inquiries.

“The ACCC would be concerned if any franchisor encouraged or induced its franchisees to make misleading price claims about the impact of the carbon price,” the watchdog said in a statement.

“Businesses are entitled to increase their prices as they see fit.

“It is business as usual, so long as any claims or representations made about the impact of the carbon price are truthful and have a reasonable basis.”

AAP is seeking a response from Brumby’s and its parent company Retail Food Group.

The stock exchange-listed Retail Food Group has more than 1200 franchised outlets across the country including Donut King, Michel’s Patisserie, Brumby’s Bakery, bb’s cafe, Esquires Coffee Houses and Pizza Capers.

Opposition Leader Tony Abbott said every business was under pressure because of the carbon tax.

“The truth is the carbon tax is going to impact on every price in our country because every price in our country embeds the cost of power and embeds the cost of transport,” Mr Abbott told reporters in Adelaide.

“That’s the whole point. If it doesn’t hurt, it doesn’t work.”

Mr Abbott said all businesses needed to be “fair dinkum” when it came to setting prices.

“There can be no rip-offs and the ACCC is right to police any business that is threatening to rip off its customers,” he said.

“But I can fully understand why every single business in this country is looking at its costs and thinking of how much prices have got to go up.”

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