May 25, 2015
A push to turn the voluntary Food and Grocery Code – which aims to protect suppliers from unfair practices by supermarket giants Coles and Woolworths – into a mandatory code has failed.
The Senate Economics Legislation Committee has concluded its inquiry into the voluntary code and has recommended that the regulation stand without change.
Suppliers – especially dairy producers hit by the “milk war” – have been calling for a mandatory code and the appointment of an ombudsman to correct the imbalance of bargaining power between supermarkets and producers.
Four National Party senators – Matthew Canavan (Queensland), Bridget McKenzie (Victoria), Barry O’Sullivan (Queensland) and John Williams (NSW) – dissented from the Committee’s recommendation, calling on the establishment of a Grocery Ombudsman to enforce a mandatory Code of Conduct.
“Suppliers face a number of hurdles in making and establishing a case for a complaint under the Code,” the Senators wrote.
“Lack of access to relevant documents from retailers is one key issue. This is exacerbated by the presence of substantial information asymmetries, which mean that in many cases suppliers will face uncertainty about whether documents necessary to make and sustain their case even exist.”
They also said the potential cost to suppliers seeking dispute resolution under the Code was a significant barrier, particularly the cost of mediation and arbitration where fees could reach up to $2000 a day.
Neither Coles not Woolworths appeared at the inquiry.
