Canada's most authoritative and exciting grocery b2b publication
Industry NewsAustralia to enforce mandatory supermarket code, imposing hefty fines for breaches

Australia to enforce mandatory supermarket code, imposing hefty fines for breaches

Australia is poised to impose billion-dollar fines on major supermarket chains that fail to adhere to an industry code of conduct. The move is aimed at addressing concerns about unfair pricing practices towards suppliers, including farmers, the federal government says.

The new regulations will target grocery chains with annual revenues exceeding A$5 billion (US$3.3 billion), which currently includes Woolworths, Coles, ALDI and wholesaler Metcash. The companies will be required to comply with the code of conduct, which has so far been voluntary.

The decision follows a report by former competition minister Craig Emerson, which concluded that the existing code was “failing to address the imbalance of bargaining power between supermarkets and their suppliers, including farmers,” according to a government statement.

Grocers to face fines

Supermarkets found in breach of the code could face fines of up to 10 per cent of their annual turnover. In 2023, Woolworths reported Australian food sales of A$48 billion, Coles A$37 billion, and Metcash A$10 billion. ALDI does not disclose its earnings.

“This is about getting a fair go for families and a fair go for farmers,” says Treasurer Jim Chalmers, Agriculture Minister Murray Watt, and Competition Minister Andrew Leigh in a joint statement.

The review is part of six government inquiries into the highly concentrated supermarket sector in Australia, where Woolworths and Coles together control two-thirds of the grocery market.

Grocers respond

Woolworths and Coles representatives said they would review the report’s recommendations and the government’s response. An ALDI Australia spokesperson expressed support for making the code mandatory and stated the company was reviewing the recommendations. A Metcash spokesperson affirmed their commitment to the code and their ongoing collaboration with suppliers.

The National Farmers Federation welcomed the changes, which they believe will empower grocery suppliers to voice concerns over potential misuse of market power by large customers to lower wholesale prices.

“These changes should finally give the code the clout it needs to protect farmers,” says Charlie Thomas, the federation’s acting CEO, in a statement. “It will hopefully mean that farmers can speak up without fear of retribution, and we’ll start to get a clearer picture of the issues at play.”

Additionally, a separate inquiry into consumer pricing by the Australian Competition and Commission is expected to report its findings in February 2025.

Follow us:

Recent Issues

Related Articles