Would capping the price of bread, milk and eggs make your groceries cheaper?

Updated 3 November 2026 with the latest figures.

On 28 October 2026 the ABS reported that prices rose 4.3% in the year to September. Fuel jumped 23.6%. Milk rose 5.4% and fruit more than 10%, according to ABS figures reported by Yahoo Finance.

That afternoon Labor MP Ed Husic, who chairs the House economics committee, went on the ABC. He said supermarkets were profiting at families' expense.

His fix: consider caps on staples like bread, milk and eggs. He named no price and no mechanism. Assistant Treasurer Daniel Mulino ruled it out, and the Liberals' Andrew Hastie called it "very interventionist".

On 3 November the Reserve Bank lifted the cash rate to 4.85%, its fifth rise this year. It now expects inflation to stay above 3% until late 2027 (RBA).

The idea will keep coming back. So would it work?

A cap would cut the shelf price of the capped items. It would barely dent the total bill, and a cap set too low has emptied shelves and pushed up other prices overseas.

Confidence: Likely.

Three parts to this: the size of the basket, the record overseas and who pays.

For every $100 a household spends, about $1.18 goes on bread, milk and eggs. That comes from the ABS weights behind the inflation figure: bread 0.62%, milk 0.42% and eggs 0.14% of the basket. Food and non-alcoholic drinks as a whole are 17.44%.

Woolworths chief executive Amanda Bardwell says squeezed shoppers are already trading down to cheaper mince. So any relief matters. But size matters too.

Take the best result a recent cap has managed overseas, a 35% price cut. On our maths, that cut across all three items would save about 41 cents in every $100. It would take roughly 0.4 of a point off headline inflation, once.

Petrol works the other way. Fuel carries a weight of 3.35%, and a 23.6% rise adds about 0.8 of a point on our maths. The pump is doing twice the damage the best grocery cap could undo.

Hungary is the warning. In 2022 it froze prices on a handful of staple foods, then added eggs and potatoes in the autumn.

By November 2022 food prices were up 49% on a year, more than double the EU average, Bloomberg reported. Aldi limited shoppers to one litre of milk per visit.

Hungary's own central bank concluded the caps were "of no help in containing food inflation". Its analysis found retailers made up lost margin by raising prices on goods that weren't capped. Its governor, György Matolcsy, urged lawmakers to scrap them immediately.

Croatia is the counterpoint. Economists Ivan Mužić and Ivan Žilić studied its 2022 cap on milk products using weekly store data. Capped milk was about 35% cheaper and stayed on shelves.

Substitutes did not get dearer, but the effect on overall inflation was negligible.

A cap only works if the price still covers the cost of making the product. Otherwise suppliers sell less, or retailers recover the money elsewhere.

Australia has run this test before, without a law. In 2011 Coles cut its milk to $1 a litre and absorbed the cost, shrinking its margin from 20 cents to as little as 3 cents. Dairy farmers blamed it for years.

A 2017 ACCC ruling found the cheap milk was not what kept farm-gate prices low. It pointed instead to farmers' weak bargaining power with processors. So a cap can come out of a supermarket's margin, if the supermarket chooses to carry it.

Eggs carry the bigger risk. Bird flu has seen more than a million laying hens culled since late 2023, ANZ's Rhea Bhagat wrote in March 2025. A capped price during a shortage is how you get empty shelves.

Isabella Weber, an economist at the University of Massachusetts Amherst, is a leading advocate. She argues caps are an emergency tool for staples sold by a few dominant firms, at a time of supply shocks.

Australia fits part of that description. The ACCC found in 2025 that Coles, Woolworths and Aldi are among the most profitable supermarket businesses compared with global peers. Their average product margins rose over five years.

Croatia also shows a narrow cap can cut a price without emptying shelves. The study found poorer households gained most.

Where the evidence pushes back is scale. AMP's deputy chief economist Diana Mousina says Australia tried price controls in the 1970s and they largely failed. Croatia's win was real on milk and close to nothing on inflation.

Australia also already has a softer tool. Since 1 July 2026, very large retailers such as Coles and Woolworths break the law if they charge excessive prices compared with supply cost plus a reasonable margin (Treasury). The ACCC enforces it, and the maximum fine is the greater of $10 million, three times the benefit or 10% of turnover.

Husic has not said what price he would set, which products count, or who would enforce it. The verdict assumes any cap would sit near today's prices, not well below cost. Nor is it clear yet how hard the ACCC will use the new price gouging law.

The law is a further unknown. In 1973 voters refused to give Canberra a general power over prices: 43.81% voted yes and no state said yes. Australia's last price watchdog, the Prices Justification Tribunal, could only make findings it couldn't enforce, and closed in 1981.

A cap would make bread, milk and eggs cheaper at the till, but it would save cents in every $100 you spend and risks empty shelves if set too low.

Shoppers on the lowest incomes would gain most from a careful cap. Supermarkets, farmers and anyone buying uncapped food could pay for a careless one.

This piece draws on 19 sources: four official data releases or reports, one government announcement, one central bank analysis, one peer-reviewed study and 12 news, analysis and reference pages. We could not open the full text of the Croatian study, so its findings come from the published abstract. The 41 cents and 0.4 and 0.8 point figures are our arithmetic from ABS weights and price changes; weights shift slightly over time, so treat them as approximate. Updated on 3 November 2026. Researched with AI tools; checked and edited by VOID.

Bread, milk and eggs are only about $1.18 of every $100 a household spends. Capping them would cut those prices but barely touch the total bill, and Hungary's caps ended with milk rationing and dearer everything else. Croatia did it carefully on milk and it worked for that item, and Australia already bans supermarket price gouging, so the design matters more than the slogan.