The Australian government has recently announced plans to introduce legislation that would hold major supermarket chains accountable for complying with an industry code of conduct. This move comes in response to concerns that suppliers have been facing unfair pricing practices from these large retailers.
Under the new legislation, supermarket chains with more than A$5 billion in annual revenue, such as Woolworths, Coles, ALDI, and Metcash, will be required to adhere to the code of conduct. Failure to comply could result in fines of up to 10% of their annual turnover, which could amount to billion-dollar penalties for these companies.
According to a joint statement by Treasurer Jim Chalmers, agriculture minister Murray Watt, and competition minister Andrew Leigh, the primary objective behind this legislation is to ensure a level playing field for both families and farmers. By addressing the imbalance of bargaining power between supermarkets and suppliers, the government aims to create a fairer marketplace.
This initiative follows a report by former competition minister Craig Emerson, which highlighted the shortcomings of the current voluntary code of conduct in addressing the concerns of suppliers, particularly farmers. With ongoing scrutiny of the supermarket sector and calls for reforms to increase transparency and accountability, these legislative changes are seen as a step towards creating a more sustainable grocery industry.
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While major supermarket chains like Woolworths and Coles have expressed their commitment to supporting a sustainable grocery sector and will consider the report’s recommendations, the National Farmers Federation has welcomed the new legislation. The federation believes that these changes will provide suppliers with the necessary tools to protect their interests and prevent the misuse of market power by large customers.
The Australian government’s decision to enforce compliance with the industry code of conduct through legislation marks a significant development in the effort to promote fairness and transparency in the supermarket sector. By imposing strict penalties on supermarket chains that violate the code, the government aims to empower suppliers and create a more equitable marketplace for all stakeholders involved.