Australia: Major supermarkets could face fines of up to $10m under proposed code

Australia: Major supermarkets could face fines of up to $10m under proposed code

Australia’s major supermarkets should face penalties of up to $10 million for breaches of the Food and Grocery Code of Conduct, says new report.

Dr Craig Emerson, former Labor Minister and independent reviewer, has released the Interim Report of the Review of the voluntary Food and Grocery Code of Conduct, with eight firm recommendations, including making the code mandatory for supermarkets with over $5 billion in revenue.

Those companies, which would currently be Coles, Woolworths, ALDI, and Metcash, would then be subject to the code and the penalties that go along with it, including fines of up to $10 million, or 10 per cent of annual turnover, for the most harmful breaches.

The Code would be enforced by the ACCC, which, Dr Emerson says at the moment, is chained to the back porch due to the voluntary code at present having no penalties.

“An effective Code of Conduct would benefit consumers through greater choice and better prices by enabling suppliers to innovate and invest in modern equipment to provide higher‑quality products at lower cost.”

Woolworths Group said that it supports the Code becoming mandatory but that the scope should be widened to include other large retailers.

“The Code should apply to all major retailers operating in Australia, including global retail giants such as Amazon and Costco, who have global revenues many times the size of Australian supermarkets, as well as to large Australian retailers such as Bunnings and Chemist Warehouse, who also compete in grocery categories including everyday needs such as household products (eg cleaning), and personal care.”

Critics of the Code being made mandatory argue that the only recourse for a small supplier adversely affected by a breach of the Code would be a lengthy ACCC court action, by which time the supplier would have gone broke.

Dr Emerson said it was possible to obtain ‘the best of both worlds’ with a low-cost alternative to court proceedings involving replicating options for independent mediation and arbitration that are used in other industry codes.


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