ACCC pledges support for Food and Grocery Code

The Australian Competition and Consumer Commission (ACCC) has committed to a dual role of outreach and enforcement, to ensure the success of the Food and Grocery Code of Conduct.

Speaking at an event hosted by the Australian Food and Grocery Council (AFGC) in Canberra, chairman Rod Sims expressed confidence in the code’s ability to redress the imbalance in bargaining power that often exists between suppliers and larger grocery retailers, by prohibiting certain types of unfair conduct and by requiring retailers to deal with suppliers in good faith at all times.

Sims welcomed the approach of the AFGC in conducting training sessions on the code, but expressed disappointment in the conduct of major retailers with regard to presenting supply agreements.

“We have written to these retailers expressing our concerns. This action, which we made public, as some suppliers urged us to do, was not a signal that the code faces great difficulties; it was, instead, a signal that we will do what we can to ensure the code succeeds,” Sims said.

“Ensuring suppliers are aware of their rights is crucial to the success of the code.”

Sims also outlined the ACCC’s plans for an increased focus on the agricultural sector, which includes establishing a dedicated Agricultural Enforcement and Engagement Unit and a new Agriculture Consultative Committee. The government will also shortly appoint an Agriculture Commissioner.

He said the commission was planning to enhance its understanding of the competitiveness of agricultural supply chains through market studies, to assist the agricultural sector deal with market concentration and fair trading issues, and identify key supply chain issues across the agricultural sector for enforcement focus, investigation and prosecution.

Sims also discussed proposed changes to the country of origin labelling regime and the role of regulators, describing the proposed new COO scheme as “major change” that would reshape the obligations of traders, requiring most food to display the percentage of local content in addition to stating a country of origin.

“The government’s proposal also transfers roles traditionally undertaken by food regulators to the ACCC and state and territory Australian Consumer Law (ACL) regulators,” he said.

Sims said the ACCC would look to build awareness and compliance through outreach and, where necessary, enforcement. He also discussed the ACCC’s approach to protecting consumers, competition and innovation by ensuring truth in advertising.

“We have been very busy in the food sector, focusing on the powerful promotional claims that go to the premium nature of a product or a particular production process.

“We have in particular focused on ‘free range’ claims, particularly those of egg producers, but also addressing representations made in the pork industry,” Sims said.