Coalition Supports Mandatory Code of Conduct for Supermarkets

The Coalition has shown support for the Labor government’s proposed mandatory code of conduct for supermarkets.

Although the current code regulates supermarket-supplier relationships, it operates on a voluntary basis without penalties for misconduct.

The proposed mandatory code would empower the Australian Competition and Consumer Commission (ACCC) to levy fines on offenders.

Under this proposed code, companies could face fines of up to $10 million (US$6.6 million) or 10 percent of annual turnover for serious breaches, and 600 penalty units (approximately $187,800) for minor violations.

On April 9, Shadow Infrastructure Minister Bridget McKenzie emphasized the need to broaden the scope of the report’s recommendations.

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‘We’ve been calling for a mandatory code for supermarkets for a very long time,’ McKenzie told Nine News.

‘Obviously, our suppliers, particularly small businesses and primary producers, require better terms and some assurance when dealing with major supermarkets.

‘We have major multinational players in the supermarket sector who are not covered. So, I would like to see this expanded gradually.’

The report recommended imposing a mandatory code on supermarkets with an annual turnover of $5 billion (US$3.3 billion), which would include major players like Woolworths, Coles, Aldi, and Metcash.

McKenzie’s comments echoed Woolworths’ concerns, advocating for the code to encompass all large retailers and grocery wholesalers.

‘The Code should apply to all major retailers operating in Australia, including global retail giants such as Amazon and Costco, who have global revenues many times the size of Australian supermarkets, as well as to large Australia retailers such as Bunnings and Chemist Warehouse who also compete in grocery categories, including everyday needs such as household products and personal care,’ a Woolworths spokesperson stated.

Coalition Working on Divestiture Powers

Simultaneously, the shadow minister provided an update on the Coalition’s efforts to introduce divestiture powers into Australian competition laws through proposed legislation.

Divestiture power allows authorities to compel companies to divest assets, such as stores and brands, in specific circumstances.

‘Last week in Sydney, [Opposition Leader] Peter Dutton and myself both spoke separately at the small business conference and were very, very clear with those small businesses that divestiture power … is something that the Coalition will absolutely be taking to the next election.’

While details of the legislation have not been publicly disclosed by the Coalition, McKenzie mentioned that more information would be forthcoming in the following weeks and months.

Although the Greens’ legislation is aimed at supermarkets, it could have broader implications, potentially affecting businesses in other sectors.

The Greens’ proposal has faced criticism from the business community, branding it as an “extreme” and ineffective solution to the current cost of living crisis.

On the other hand, Prime Minister Anthony Albanese dismissed the notion of splitting up supermarket chains, stating that Australia is ‘not the Soviet Union.’