The interim report seeks to prevent big supermarkets from abusing their market power while rejecting populist policies such as forced divestiture of stores.
The interim report of my review of the Food and Grocery Code of Conduct has been guided by widely accepted economic principles.
It recommends intervention through a mandatory code where a supermarket abuses its superior market power in dealings with smaller suppliers, while providing options for the parties to resolve disputes through agreed mediation and arbitration.
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Craig Emerson is managing director of Emerson Economics. He is a distinguished fellow at the ANU, director of the Australian APEC Study Centre at RMIT and adjunct professor at Victoria University’s College of Business.
