ACCC supermarket inquiry: Farmer calls to strengthen grocery code

The ACCC has released their report and recommendations into improving competition in the grocery sector. These are the key points for farmers.

Farmers have backed moves by the national consumer watchdog for a stronger Food and Grocery Code following the release of a much-anticipated probe into supermarket competition.

The Australian Competiton and Consumer Commission last week issued the 441-page report, which made 20 recommendations to improve competition in the grocery sector.

While most of the recommendations were aimed at consumers, the ACCC did call for Aldi, Coles and Woolworths to be required to provide fresh produce suppliers with greater transparency about the weekly tendering processes they use to negotiate price and volumes.

Other farmer-focused recommendations include:

GREATER transparency for growers who sell fresh produce through intermediaries;

SUPPLIERS of supermarket branded fresh produce to supermarkets should have earlier certainty about orders placed with them;

SUPPLIERS should be allowed to apply their own branding to fresh produce.

ACCC deputy chairman Mick Keogh said the watchdog recommended the big three supermarkets should not be able to unilaterally reduce the price or volume agreed in purchase orders confirmed through their weekly tendering processes.

He said the only exception would be in the case of a force majeure event, meaning an unforeseen situation like a flood or bushfire.

National Farmers Federation horticulture president Richard Shannon said: “The ACCC has concluded, without reform, there is a very real prospect that supermarkets are going to ride the fresh produce sector right into the ground.

“The ACCC have been wise to dismiss the claim made by supermarkets that their prices simply swing with the supply and demand winds of wholesale markets,” he said.

“This hasn’t been true for a long time.”

NSW Farmers vice president Bec Reardon said the federal government and opposition needed to act on the recommendations, with a federal election set to be called within weeks.

Mrs Reardon said a beefed-up Food and Grocery Code would be a good start, with the current parameters not fit-for-purpose in 2025.

“The ACCC made 20 recommendations aimed at promoting transparency and fairness in the supermarket sector, including clearer pricing practices and transparency in supplier dealings,” she said.

“While these recommendations are steps in the right direction, they still may fall short of addressing the core issue – the excessive market power concentrated in the hands of a few retail giants and farmers beholden to these giants.”

Australian Competition and Consumer Commission deputy chief Mick Keogh.

Australian Retailers Association chief industry affairs officer Fleur Brown said the ACCC report showed there was “no evidence of supermarket price gouging”

“Supermarkets support regional communities by defraying transport and supply chain costs across all their stores, ensuring that even those in outlying areas have access to fresh food and goods with prices largely the same in almost all stores nationwide,” she said.

Australian Dairy Farmers president Ben Bennett said the federal election campaign was a prime opportunity for both federal Labor and the Coalition to adopt the ACCC recommendations as policy.

“We need the government and opposition not only to take these recommendations on board but to go further for fresh food suppliers. We need to ensure retail price increases flow to farmers and not just into the pockets of supermarkets,” he said.