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NFF renews call for grocery code to be mandatory

Beef Central, 10/01/2024

AUSTRALIA’S peak farmer body has renewed its call for a mandatory Food and Grocery Code of Conduct with the ‘teeth’ to fix a supply chain system it says is failing farmers and consumers.

The Albanese Government yesterday announced it had appointed Dr Craig Emerson to lead the 2023-24 review of the Food and Grocery Code of Conduct “to ensure that the supermarket sector is working as it should.”

The Food and Grocery Code is prescribed under the Competition and Consumer Act 2010 to improve standards of business behaviour in the food and grocery sector. The code regulates the conduct of its signatory retailers and wholesalers towards suppliers. Signatories are subject to compliance and enforcement action by the Australian Competition and Consumer Commission.

However, the grocery code is voluntary and only applies to retailers or wholesalers that have elected to be bound by giving written notice to the ACCC, which is responsible for enforcing the code. The code does not override existing rules in the Australian Consumer Law.

Aldi, Coles, Woolworths and Metcash are signatories to the code and are bound by it, the Federal Government said.

You can have your say on the 2023-24 review and become involved in the public consultation process by visiting the Treasury website.

The Review of the dispute resolution provisions (Part 5) of the Food and Grocery Code of Conduct can be found on the Treasury website along with the Government’s response to the Review.

NFF wants a food and grocery code with ‘teeth’

National Farmers’ Federation president David Jochinke welcomed Dr Emerson’s appointment, but said “the code is failing farmers and we’ve said for a long time it should be made mandatory.”

“We need to get to the bottom of why there’s a growing gap between what farmers get paid and what produce is being sold for on supermarket shelves.

“It’s not just supermarkets we need answers from, we need to know who else in the supply chain is clipping the ticket and sending food prices skywards,” Mr Jochinke said.

The NFF called on Dr Emerson to adopt the recommendations of the ACCC’s Perishable Agricultural Goods Inquiry, including making the code mandatory, removing the ability of retailers to contract out of important protections in the Code, introducing significant civil pecuniary penalties and providing genuinely independent dispute resolution.

The NFF also welcome the government’s support for all recommendations from the review of Part 5 of the Food and Grocery Code of Conduct to support disputes to be resolved more efficiently and effectively.

Mr Jochinke said while these announcements were a positive step, there was still a long way to go to fix Australia’s competition issues.

“While reviews and inquiries are all well and good, we don’t want the Government to be distracted from pursuing immediate reform to competition laws more broadly – for instance looking at unfair trading practices or merger laws that have led to these competition issues in the first place.

“Farmers told us loud and clear in the National Farmer Priorities Survey, competition is the biggest issue keeping them up at night.

“Small family farming businesses are at the mercy of large corporates that dominate Australia’s food supply chain,” he said.

“As the cost of farming and the cost of living go through the roof, now is the time to correct this power imbalance and improve market price transparency so it’s not being used against farmers.

“Farmers need to understand how the price they are paid is determined, as should consumers,” Mr Jochinke said.

“There are so many unknowns in farming, but pricing doesn’t have to be one of them.”

Dr Emerson was the Federal Minister for Small Business from 2007-2010 and Minister for Competition Policy and Consumer Affairs from 2009-2010. He was Minister for Trade from 2010-2013. He is a former Queensland Government Director-General and senior economic adviser to Prime Minister Bob Hawke.

The Federal Government yesterday released the review of the dispute resolution provisions (Part 5) of the Food and Grocery Code of Conduct and the government’s response to that review.

The government said it supports all of the recommendations in the review to amend the code to:

Enable code arbiters to mediate and allow suppliers to contact and seek preliminary information from code arbiters without making a formal complaint, and

Enhance the independent reviewer’s role in overseeing the conduct and complaint handling practices of the code arbiters.

Transparency needed across the supply chain

Red meat retail price scrutineer Andrew Dunlop has written several articles in the past year highlighting his concerns about the producers share of the retail dollar. (more here, here and here)

Like many others, he said he would like to see the Australian Competition and Consumer Commission look into retail pricing.

“Whoever undertakes these inquiries needs to be able to have the teeth to be able to point out and impose corrections to the system so people can be fined if they are doing the wrong thing,” Mr Dunlop said.

Mr Dunlop said the ultimate goal was transparency across the supply chain.

“If you look at the United States they have transparency across their supply chain and it makes for a fair and efficient market,” he said.

“They have reports that are produced by the agricultural research service and the agricultural marketing service that can tell you what things are worth at each point of the chain and where there is any arbitrage. We don’t have that sort of information in Australia, even though that was recommend about 25-years-ago.

“That’s what is needed here for everyone in the supply chain to be able to make informed decisions.”

A fresh look to give consumers and supplies a fair deal – Chalmers

Minister for Agriculture, Fisheries and Forestry Murray Watt said the government has been making clear for many months that retailers should start dropping their prices to reflect the reduction in prices farmers are getting for their produce.

“Farmers deserve a fair price for their hard work and the some of the prices supermarkets are charging just don’t pass the pub test.

“While the government is getting on with taking action on the cost of groceries, the ball is in the court of the big retailers,” he said.

“They don’t have to wait until this review is finalised to drop their prices, they can do that right now to help Australian families doing it tough.”

Albanese ‘shamed’ into appointment – Littleproud

Nationals leader David Littleproud said Labor’s Food and Grocery Code of Conduct Review took almost 100 days to appoint a reviewer.

He said Mr Albanese has been shamed into announcing Dr Emerson’s appointment, just hours before 100 days into a 272-day review, “while families and farmers continue to be ripped off at the checkout and farmgate in a cost-of-living crisis.”

“Sadly, this delay has been embarrassing for the Prime Minister, the Treasurer and the Agriculture Minister.

“They have been caught asleep at the wheel. It has taken The Nationals’ calling out of Labor’s gross failure to get this going today, highlighting it has been almost 100 days, for Labor to finally appoint Dr Emerson,” Mr Littleproud said.

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