Australia: Supermarkets to face heavy penalties under new code

Australia: Supermarkets to face heavy penalties under new code

The Australian government has confirmed it will accept all recommendations in the final report of an inquiry into the Food and Grocery Code of Conduct.

Dr Craig Emerson, former Labor Minister and independent reviewer, released the final report with recommendations including making the code mandatory for supermarkets with over $5 billion in revenue and heavy penalties for breaches.

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 heavy imbalance in market power between supermarkets and smaller suppliers in Australia’s highly concentrated supermarket industry demands a mandatory code of conduct,” said Dr Emerson in the report.

Emerson said that smaller suppliers feared retribution from the big supermarkets if they made a complaint and recommended strengthening protections against retribution as well as recommending new protections for suppliers of fresh produce.

“I further recommend that an anonymous channel be established by the ACCC to receive complaints about retribution and other breaches of the Code.

“The ACCC could use this information to form views about systemic Code breaches by a supermarket or a particular buyer or category manager, which could trigger an investigation, including the use of the ACCC’s compulsory information-gathering powers.”

In a statement, the Federal Government said accepting all the recommendations is about getting a fair go for families and a fair go for farmers.

“Our efforts will help to ensure our supermarkets are as competitive as they can be so Australians get the best prices possible.

“We’re cracking down on anti‑competitive behaviour in the supermarkets sector so people get fairer prices at the checkout.”

The review is part of the Albanese Government’s broad competition reform agenda, which includes an ACCC inquiry into supermarket prices, funding for CHOICE to conduct quarterly price monitoring reports, and progressing legislation to implement the biggest change to the merger reform system in almost 50 years.


Scroll to Top