Food and grocery code: Producer’s pain and fears of retribution

Growers fear they may lose business if they raise complaints to powerful retailers, as many struggle to earn a profit in the face of input costs.

Australia’s horticulture producers fear losing business if they raise complaints or try to negotiate prices with retailers, as growers struggle to earn a profit in the face of rising input costs.

An independent review of the Food and Grocery Code, conducted by the federal government, found zero requests from suppliers were made to the code arbiters in 2022-23, but independent reviewer Chris Leptos said he received “direct approaches from suppliers where they are reluctant to formalise a complaint”.

“The lack of formal complaints may be explained by the changes adopted by the code signatories – specifically, authorising their code arbiters to play a more proactive role in listening to supplier concerns without lodging a formal complaint,” Mr Leptos said in the report.

The voluntary code was introduced in 2015 under the Competition and Consumer Act 2010, and works to address an imbalance of bargaining power between retailers and suppliers.

The report found fruit and vegetable suppliers reported “less favourable treatment” compared to other product suppliers.

Of the suppliers who were concerned raising issues with a buying team, fear of retribution was among the most common reasons, while more than 53 per cent of respondents were afraid of damaging a commercial relationship.

Victorian Farmers Federation president Emma Germano said tackling issues between suppliers and purchasers was as complex as the horticulture sector was varied.

Victorian Farmers Federation president Emma Germano said many growers feared retribution should they push hard in price negotiations. Picture: Supplied

“There's absolutely a fear of retribution,” Ms Germano said, adding the code itself was not useful for fruit and vegetable suppliers.

“A lot of fruit and vegetable growers are saying they’re in genuine distress.”

Ms Germano said the horticulture industry faced challenges due to the dominance of a few large retailers particularly in a market that was often oversupplied, leading to a race to the bottom in terms of pricing.

But the senate inquiry into the supermarket duopoly could also bring unexpected challenges for the industry.

“The sentiments we’re seeing is that there could be adverse consequences to the inquiry … the government can’t use supermarkets as a smokescreen,” Ms Germano said.