Significant penalties confirmed for supermarkets that engage in poor behaviour

AUSTRALIA’S supermarket duopoly has been put on notice following confirmation from the federal government this week that it would legislate hefty fines for retailers that breach the grocery code of conduct.

The voluntary Food and Grocery Code of Conduct, detailing how the relationship between suppliers and retailers should work, is also set to become mandatory, a key recommendation from Dr Craig Emerson’s independent review into the code.

On Monday last week, the federal government announced it would adopt each of the 11 recommendations outlined in Dr Emerson’s final report, also handed down on Monday.

These recommendations include establishing an anonymous complaints mechanism for suppliers to raise issues directly with the Australian Competition and Consumer Commission, strengthening supplier protections against retribution and implementing an improved dispute-resolution process.

Central to the proposals is the introduction of strong penalties of up to $10 million, or 10 per cent of the grocer’s annual revenue in the preceding 12 months, for harmful code breaches.

Corangamite federal member Libby Coker said the introduction of a mandatory Food and Grocery Code of Conduct and significant penalties for overcharging would ensure supermarkets are held to account for poor behaviour.

“We know the weekly grocery bill is just too high and we know that farmers are often pressured to undersell their products to the big supermarkets.

“It’s not good enough, particularly now when people are facing cost of living pressures.

“We’re also giving famers the support they need – to speak out without fear of retribution – when they believe they’re being pressured into underselling their product.

“We want to be a nation that grows our own food, and we need to back in our farmers so they can afford to do it.

“These measures are all about giving consumers a fair go and giving our producers a fair go.”

It follows the release last week of the first government-funded report on Australia’s supermarket prices by consumer group CHOICE, which revealed that a basket of groceries at Aldi is about 25 per cent cheaper than a basket at Coles or Woolworths.

To gather these results, undercover shoppers were deployed to 81 supermarkets – 27 Woolworths, 27 Coles, 23 Aldi and 4 IGA stores – to record the price of a grocery basket filled with 14 common pantry staples, including flour, tinned diced tomatoes and full-cream dairy milk.

CHOICE will now release supermarket price monitoring surveys every three months, with the next report due before the end of September.

“This matters because Australian shoppers want to know where they can get the best deal,” Assistant Minister for Competition, Charities, Treasury and Employment Andrew Leigh said.

“As you follow these CHOICE price monitoring reports, you’re able not only to get the best deal for your family, but also to put more competitive pressure on the Australian supermarkets.

“Australia’s grocery sector is one of the most concentrated in the world, with a significant market share for the two biggest players.

“So, it’s only fair that we have considerable price scrutiny on the prices of groceries being paid by Australian shoppers.”

Ms Coker said the quarterly assessments would help consumers determine which supermarket had the cheapest basket of groceries.