Australia’s supermarket duopoly Coles and Woolworths are copping the blame as our cost-of-living crisis fuels allegations of dodgy discounts and poor treatment of suppliers. Changes to the current voluntary supermarket code of conduct are just one of the measures being pursued in what is a basketful of reviews, reports, handwringing and finger-pointing.
Critics say the current voluntary code of conduct, introduced in 2015 to address a lopsided balance of power between supermarkets, suppliers and producers, has been akin to being slapped with a wet lettuce. But there are doubts proposed changes to beef it up will help consumers at the checkout and improve farmgate prices for struggling producers.
For more than a decade rambunctious Queensland MP Bob Katter has called for forced divestment of supermarket monopolies. He says it will foster competition and support producers. Coles and Woolworths, who account for 70 per cent of the market according to IBISWorld, are front and centre of the conversation.
Every time we self-checkout groceries we are hit with sticker shock and shrinkflation. Wasn’t that big jar of marmalade the same price as the now much smaller jar not that long ago? Since when has the big Moccona coffee jar cost $32?
Or we reach for a product we regularly buy only to find it is no longer available. Behind the scenes there is a producer facing ruin or desperately trying to pivot because the supermarket’s buyer has deleted their product from the shelves: the producer can no longer supply it for the cost the supermarkets want to pay or can’t satisfy the promotions (aka specials) demanded of them. No number of ‘free’ knives is going to fix that.
Earlier this year, the Federal Government appointed economist and former Labor Minister Dr Craig Emerson to lead the Review of the Food and Grocery Code of Conduct. The Federal Government pledged to adopt all the recommendations including making the code mandatory for supermarkets with revenue over $5 billion, higher penalties for breaches and a pathway for whistleblowers to complain about their experience in response to feedback that suppliers were reluctant to take on big supermarkets.
Consultation on the draft legislation closed on 18 October, with the mandatory Food and Grocery Code of Conduct to replace the voluntary code on 1 April 2025.
The Federal Government has also announced reforms to merger laws, pledging to make it easier for most mergers to be approved quickly but allowing the Australian Competition and Consumer Commission (ACCC) to focus