Supermarkets found to have breached the Food and Grocery Code of Conduct could face either $10 million in fines or 10% of their annual sales, under a new bill introduced to Parliament by the Government.
The codebetween suppliers and supermarket chains. It’s currently optional and there are limited penalties for breaches.
The bill follows a Government review earlier this year, which recommended making the code compulsory for all supermarkets and introducing tougher penalties for failing to observe the rules.
Supermarkets
Coles and Woolworths control roughly two-thirds of Australia’s supermarket sector.
Both companies reported profits of more than $1 billion in the last financial year.
The supermarkets have faced mounting accusations of underpaying farmers for their produce and unreasonably marking up the prices of their products, a practice known as ‘price gouging’.
Supermarket code
The Food and Grocery Code is a rulebook for the supermarket industry created in 2015.
It set out best practices for suppliers (like farmers and manufacturers) and supermarkets, covering fair remuneration for goods, notice of price changes, coordinating food wastage, and negotiating disputes.
Currently, the code is voluntary and there are no penalties for breaches. Coles, Woolworths, ALDI, and IGA owner Metcash have all signed up to the code.
Review
Theinto the Food and Grocery Code of Conduct earlier this year, led by former Labor Minister Craig Emerson.
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The Emerson review recommended two key changes: making the code compulsory and introducing fines for breaches.
While making the code compulsory didn’t require legislation, introducing new fines for breaches does. The Government has now introduced a bill to do this.
Penalties
The code will become compulsory from April 2025.
If the Government’s bill passes, supermarkets would faceof the revamped code — whichever is the largest amount of either:
$10 million
Three times the value of any benefit gained from a breach
10% of the previous year’s sales
Woolworths’ supermarket arm made $50.7 billion in sales in 2023/24. If it were penalised according to the third option, it would be fined $5.07 billion.
Opposition
Deputy Opposition Leader Sussan Ley said the Coalition will consider the penalties.
However, she criticised the timing of the Government’s introduction of the bill.
Speaking to Channel Nine, Ley said: “This government has been there for 900 days, and right now… with maybe only two sitting days left they’re introducing legislation about supermarkets…Why is this suddenly turning up now?”
