The Australian Food and Grocery Council (AFGC) believes the new Grocery Code will have “real teeth” and is slightly different to the Grocery Inquiry of 2008 and the subsequent Horticulture Code.
“We believe this code will strike the right balance and while we need an effective, competitive market, it will be an instrument of Parliament, has a lot more bite and there will be significant penalties associated with breaches of the code,” an AFGC spokesperson said.
Grocery Code stakeholder meetings are the next step that may determine whether the voluntary Food and Grocery Code of Conduct, facilitated by Treasury’s Competition Policy Unit, will proceed and be effective, and also enforceable under the Competition and Consumer Act 2010.
It was designed to establish a clear set of principles relating to the trading relationship between supermarket majors Coles and Woolworths and suppliers.
Submissions to the Grocery Code closed this week, after the Treasury released the exposure draft of the Grocery Code consultation paper, ‘Improving Commercial Relationships in the Food and Grocery Sector,’ for five weeks of public feedback.
Groups expected to make submissions include Aldi, AACS, AFGC, ACCI, the ARA, Ausveg, Coles, FoodWorks, Master Grocers Australia, Metcash, WA Independent Grocers, Woolworths, consumer and small business groups.
In November 2013, Coles, Woolworths and the AFGC provided their jointly developed Grocery Code to the Government, which was subsequently redrafted to comply with the legislative framework under the Competition and Consumer Act 2010 (CCA).
If a retailer agrees to be bound by the voluntary Grocery Code and is later found to have breached it, enforcement action can be taken under the CCA by the Australian Competition and Consumer Commission or by private action, which may include injunctions and compensation for damages.