Supermarket Giants To Face Fines Over $10 Million

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By Published On: April 9, 20240 Comments

The Food and Grocery Code of Conduct Review Interim Report recommends major penalties for supermarket's conduct breaches.

The ACCC’s inquiry into Australia’s supermarket sector is in full swing. The year-long inquiry aims to examine competition in the supermarket sector and how it has changed since the ACCC’s last inquiry nearly 15 years ago back in 2008.

The Food and Grocery Code of Conduct Review Interim Report was released this week, with the report including recommendations that the Code be made mandatory, with penalties of $10 million or more for serious breaches.

Dr Craig Emerson, independent reviewer, says making the code mandatory is essential to deal with the heavy imbalance in market power between the major players – Coles, Woolworths, ALDI, and Metcash – and their smaller suppliers.

He calls for an effective code of conduct which would, “benefit smaller suppliers and consumers by enabling suppliers to innovate and invest in modern equipment to provide better products at lower cost.”

Dr Emerson states, “The existing Code is not effective. It contains no penalties for breaches and supermarkets can opt out of important provisions by overriding them in their grocery supply agreements. I firmly recommend the Code be made mandatory and apply to all supermarkets with annual revenues exceeding $5 billion, which at present are Coles, Woolworths and ALDI, and wholesaler, Metcash.

“The Code should be strengthened to better protect suppliers, with new protections against retribution, since suppliers’ fear of retribution compromises the Code’s effectiveness.”

The proposed changes would enable the ACCC to be able to seek penalties for major or systemic breaches of up to $10 million, 10 percent of a supermarket’s annual turnover, or three times the benefit it gained from the breach, whichever is the greatest. A low-cost alternative to court proceedings is recommended to ensure this with redesignated supplier or independent Code Mediators to ensure justice for suppliers.

Stakeholders are invited to make submissions to the Interim Report by 30 April 2024.

The Final Report will be provided to the Government by 30 June 2024.

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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