Supermarkets Risk Huge Fines Under Strengthened Food and Grocery Code

Farmers are calling on the Albanese government to intensify competition reforms to prevent supermarkets from exploiting their market dominance over suppliers.

The government’s commitment to revamping the food and grocery code of conduct has been positively received by farming groups. However, they believe this should only be the initial move in combating predatory practices.

Following a review led by former Labor minister Craig Emerson, supermarkets will now be required to adhere to a strengthened code that governs their relationship with suppliers.

Severe violations of the currently voluntary code could result in penalties of up to $10 million. This will apply to grocery retailers and wholesalers with annual turnovers exceeding $5 billion, including major players like Coles, Woolworths, Aldi, and Metcash.

Dr. Emerson’s review revealed that smaller suppliers often feared retaliation if they spoke out. He recommended stronger protections against such retaliatory actions and specific safeguards for fresh produce suppliers who are at a disadvantage due to the perishability of their products.

“The significant imbalance in market power between supermarkets and smaller suppliers in Australia’s highly concentrated supermarket industry necessitates a mandatory code of conduct,” Dr. Emerson stated.

The government has agreed to implement all 11 of Dr. Emerson’s recommendations, including establishing an anonymous complaints mechanism and mediation and arbitration channels.

Treasurer Jim Chalmers emphasised, “This is all about ensuring a fair go for farmers and families. It’s about ensuring the big supermarket chains treat their growers, suppliers, and customers fairly.”

Mitchell McNab, an apple, pear, and stone fruit grower near Ardmona in central Victoria, believes the proposed fines could effectively deter retailers from mistreating suppliers.

“Now, the government must enforce these changes to make them meaningful for growers and suppliers,” Mr. McNab stated. “Hopefully, this will balance the power dynamics, enabling better negotiations with retailers. Most growers are concerned that past Senate inquiries and similar initiatives haven’t delivered on their promises.”

The National Farmers Federation’s Horticulture Council described the updated code as a “vast improvement” but noted that several potential measures were not included.

Separate inquiries into supermarket practices are being conducted by the ACCC and a Senate committee. Nationals leader David Littleproud supported the changes but criticised their timing, stating they came too late for farmers and families struggling with cost-of-living pressures.

For the latest retailer news and information, check out the IndiHub website or to speak to us about how we can help your business contact us.

Scroll to Top