Supermarkets, food suppliers agree on conduct code
A voluntary code setting out rules of engagement for supermarkets and their suppliers has been presented to the Federal Government today.
The Australian Food and Grocery Council, which represents food manufacturers, and major supermarkets Coles and Woolworths agreed on the content of the code on Friday night.
It's the culmination of more than a year of negotiations, designed to address concerns that the supermarkets misuse their market power in dealing with food suppliers.
The Food and Grocery Council's chief executive Gary Dawson says the code is an enormous step forward and addresses suppliers' biggest concerns.
"It is a tough market, where you've got rising costs, retail price deflation, and where suppliers large and small face an imbalance in market power," he said.
"The essential goal of this agreement is to drive greater contractual certainty [for manufacturers], to underpin investment and innovation.
"It does that through putting clear restrictions, tough restrictions, on things like retrospective changes to contracts, unilateral changes to contracts; restrictions on retailers demanding payment from suppliers for shelf positioning; safeguards around the protection of IP [intellectual property] and confidential information, and that's important when it comes to the split between branded products and retailers' own brands; and dispute resolution options [for suppliers] that give suppliers a range of choices, including going straight to the ACCC."
It would be voluntary for supermarkets to sign up to the code, but once they do, any breaches would then be punishable under the Competition Act, through the Australian Competition and Consumer Commission (ACCC).
The National Farmers Federation walked away from talks to establish a voluntary code in March this year, saying it wanted a mandatory code.
NFF chief executive Matt Linnegar says it's the outcome that matters, and he'll be taking a close look at what the proposed voluntary code means for farmers.
"We said we needed to move to a mandatory code because a voluntary process appears not to be good enough," he said.
"That's not to say that it's mandatory code or bust. That is our position, but we've always said that if a prescribed voluntary code, like we're talking about here, delivers the sort of outcomes we're seeking, then we're obviously happy to have a look at that."
Source: ABC News, 18 November 2013
