Avocados and the new ACL consumer threshold.

Inflation, avocados and consumer law.

You may be wondering what is the connection between these 3 seemingly unrelated topics?

Inflation has contributed to the increase in avocado prices by up to 129% in recent years. Separately, a Government review has recognised that in light of inflation, the Australian Consumer Law (ACL) for consumers and small businesses required adjustment.

For many years, the ACL protected consumers acquiring goods or services, with a cap of $40,000. But, with the rise in costs of living, the value of this cap was no longer reflective of the value it was intended to protect. As a result, from 1 July 2021, this cap has been increased to $100,000. Many consumers are breathing a sigh of relief.

More bang for your buck

Pleasingly, both consumers and small businesses stand to benefit.

The new cap expands the number of potential consumers who can benefit from minimum standards of protection under the ACL. The changes mean more business-to-business transactions will now come within the scope of ‘consumer’ purchases under the ACL.  Additionally, small (and larger) businesses who acquire higher value goods (eg office equipment or hardware) will be able to rely on the ACL for protection where their goods or services are:

• under $100,000;
• not acquired for the purpose of:
  • resupply; or
  • transformation within the process of production or manufacture; or
  • repairing other goods or fixtures on land.

Consumer guarantees

The ACL provides statutory protection, known as ‘consumer guarantees’, where consumers can enforce their rights. These include guarantees that:

• goods are:
  • of acceptable quality;
  • fit for purpose;
  • comply with their description;
  • correspond with any sample or demonstration; and
  • have a clear title.

• services are:
  • fit for purpose;
  • provided with due care and skill; and
  • delivered within the timeframe agreed upon, or within a reasonable time.

For an exhaustive list of the other protections under the ACL, visit the ACCC Consumer Guarantees page.

Being prepared

Businesses with transactions under the new scope of a ‘consumer’ must be prepared as they may be subject to the consumer guarantees. Notably, whilst suppliers cannot contract out of these statutory guarantees, they may limit their liability for a breach of consumer guarantee to the repair or replacement of the goods (or their cost).

Where do we go from here?

Given this new ACL landscape and having regard to the new cap, suppliers and small businesses should:

• review and update relevant contracts, warranty policies, trading terms and supply terms and conditions; and
• update internal ACL compliance training and materials including additional compliance programs for staff.

Contact Bespoke for further information about how these ACL changes may affect you. We might also have some tips for you on where to buy the best value avocados!