Supermarkets could face hefty fines for non-compliance under new code

The Albanese Government will strengthen the Food and Grocery Code of Conduct, accepting all 11 recommendations of a recent independent review by Dr Craig Emerson.

The changes will see the code being made mandatory, with Coles, Woolworths, Aldi and Metcash being subject to multimillion-dollar penalties for serious breaches of the code.

“We’re cracking down on anti‑competitive behaviour in the supermarkets sector so people get fairer prices at the checkout,” said Treasurer Jim Chalmers, Agriculture Minister Senator Murray Watt and Competition Assistant Minister Andrew Leigh in a joint statement.

The main recommendations include:

• Making the code mandatory for all supermarkets with an annual Australian revenue of greater than $5 billion.
• Strengthening formal and informal dispute‑resolution arrangements.
• Introducing penalties for the more harmful breaches of the code with the maximum penalty the greatest of $10 million, three times the benefit gained from the contravening conduct or 10% of turnover in the preceding 12 months.
• Creating an anonymous supplier and whistleblower complaints mechanism within the Australian Competition and Consumer Commission.
• Placing greater emphasis on addressing fear of retribution.
• Improving outcomes for suppliers of fresh produce.
• Implementing these recommendations will require changes to regulations and the Competition and Consumer Act 2010, which the government will prioritise.

Supermarket comments...

As a founding signatory to the voluntary Food and Grocery Code of Conduct established in 2015, Woolworths Group said in a statement that it supported the code becoming mandatory.

“We firmly believe healthy retailer and supplier relationships are key to the continued success of our sector, as well as serving the needs of millions of customers.

“We welcome the decision to retain fast and cost-effective avenues for dispute resolution, for the benefit of suppliers, especially smaller ones.

“A key topic of this review is the supply of fresh fruit and vegetables and we note the specific recommendations for this sector in the final report.

“While there is broad support for greater price transparency in the sector, there isn’t yet consensus on how to deliver it.

“As a further step, we are willing to support an industry and government led price transparency initiative to assist on-farm decisions.”

When will this happen?

While there was no detail provided on the timing for the implementation of these changes, the government said the change will require new legislation, which will be prioritised.

The next review of the Food and Grocery Code of Conduct will commence within five years of the mandatory code taking effect.

For more information, download the final report here.

Image credit: iStock.com/sergeyryzhov