Hefty fines for supermarket misbehaviour could soon be onthe cards, according to the initial findings of a review into the Food andGrocery Code released today.
Former Competition Minister Craig Emerson conceded a "heavy imbalance"in market power existed within the supermarket sector in his interim reporthanded down today, recommending the Food and Grocery Code be made mandatorywith potentially huge fines for its breach.
NSW Farmers Vice President Rebecca Reardon said the report'srecommendations around the code could finally set the wheels in motion to addressmarket power misuse by supermarket giants.
"For years, grocery giants have had near unfettered ability touse their market power against suppliers, with a lack of accountability orpenalties for any unconscionable behaviour impacting the supply chain," MrsReardon said.
"Having a mandatory Code of Conduct for our supermarkets andtheir suppliers with enforceable, meaningful penalties for its breach couldmake the world of difference when it comes to cracking down on the harmful practicesof these super powers.
"Anti-competitive activity needs to be stopped in itstracks, and it's nice to hear the Federal Government step up and admit thecurrent Code is not good enough."
However, Emerson's failure to back divestiture powers as oneof the tools to address harmful behaviour by supermarkets was disappointing,Mrs Reardon said.
"Australia has one of the most highly concentratedsupermarket sectors in the world, and this lack of competition has enabledthese superpowers to behave as they have," Mrs Reardon said.
"We need a number of tools and reforms to address the issuesat hand, and we have pointed to divestiture powers as one of these mechanismsthat could in fact be very effective in busting supermarkets for unfair behaviour.
"Supermarkets have too much power, and too often, they are usingit in a way that is hurting farmers and harming families.
"This market concentration is the core issue and theelephant in the room, which we need to address if we want to truly change the system."
