September 11, 2020
Farmers and food processors have been urged to share their stories of supermarket bullying with the Australian Competition and Consumer Commission (ACCC).
The ACCC has begun a three-month probe into the domestic fresh food and dairy supply chain, from the farmgate through to supermarket, and consider whether supermarkets should face tougher regulations.
Queensland Dairyfarmers Organisation president Brian Tessmann said that for years, processors and direct supply farmers have whispered tales of coercion, bullying and veiled threats made by major retailers.
“Some of the stories I’ve heard over the years have included processors being forced to develop new product lines, forced private label supply, ‘Exclusive to X’ packaging sizes and unnecessary changes to formats and weights,” Mr Tessmann said.
“And while there isn’t anything inherently wrong with retailers suggesting product innovation for the benefit of consumers, it is wrong and unfair when these demands result in product wastage and costly changes to production processes.
“Other tactics I’ve heard of being used include the expectation that suppliers should supply below cost if they want to ensure future contracts are secured; not talking to the media or to other suppliers and generally keeping all ‘negotiations’ under wraps.
“There is never an email, a formal letter or any other incriminating evidence that can be produced in a court of law; but that is not to say that it does not happen.
“And this behaviour is not confined to the dairy industry; The examples given above are all instances outside of dairy but where the product in question has a very finite shelf life.
“While it is naive to think that no deals are being made behind closed doors, how these deals are being negotiated and the terms that processors and direct supply farmers are being forced to agree to, are putting pressure on the whole supply chain.
“So while you may think that it is not your story to tell because you don’t have the smoking gun as proof, it is the sheer number of these stories combined that will show the ACCC and the Federal Government the true extent of the power imbalances that exist because of the influence and power of Australia’s retail giants.
“The ACCC has guaranteed that the inquiry will accept confidential submissions so that farmers and processors can provide evidence of harmful practices without the fear of punishment and retribution.
“Without a doubt, every company that supplies perishable goods to the retail sector would have a story to tell. The question is whether they will be prepared to tell all for the sake of us all.
“I can only hope that all processors and farmers do the right thing and submit their stories to the inquiry.”
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The QDO will be holding a string of regional meetings around Queensland this month to discuss key topics – including the potential merger of the organisation with NSW – which would have been considered if the 2020 Annual Conference had been held.
The meeting for the Central Burnett Region will be held at the Kingaroy RSL Club from 11:00am on September 22.