Former Labor minister Craig Emerson will head up the federal government’s review of the Food and Grocery Code of Conduct amid growing allegations of price gouging of fresh produce by the major supermarkets.
The code is prescribed under the Competition and Consumer Act 2010, and Coles, Woolworths, Aldi and Metcash are signatories to it.
The supermarkets are bound by the voluntary code, which regulates the conduct of those retailers and wholesalers towards suppliers.
The code was introduced to improve standards of business behaviour in the food and grocery sector, but in light of accusations the bigger supermarkets have not been passing on lower farmgate prices to their customers, the government is examining if the code should be toughened.
The National Farmers Federation wants the code to be made mandatory.
Prime Minister Anthony Albanese has appointed Dr Emerson to lead the 2023-24 review of the code to look at all these issues.
“We have been clear – if the price for meat and fruit and vegetables is going down at the farm gate then families should be seeing cheaper prices on supermarket shelves too,” Mr Albanese said.
“Supermarkets have a duty to make sure they’re providing affordable options for all Australians, especially when they’re making savings on their own costs.
“If there are further steps that are needed, then the government will not hesitate to take action.”
Dr Emerson was the federal minister for small business from 2007 to 2010 and minister for competition policy and consumer affairs from 2009 to 2010.
He was minister for trade from 2010 to 2013.
Assistant Minister for Competition, Charities and Treasury Andrew Leigh described Dr Emerson as “one of Australia’s top policy economists” who will bring “his wisdom and compassion” to the economic reform.
“Dr Emerson’s work will form an important part of the wider review of policy settings that the Competition Taskforce is leading,” Dr Leigh said.
“In the 1990s, the Keating Government’s competition reforms raised household incomes by $5000. History shows competition reforms can change lives for the better.
“Capitalism depends on competition. Monopolies gouge consumers and workers and undermine fairness. Competition means better prices and more choice for Australian families.”
The government has also released the review of the dispute resolution provisions (Part 5) of the Food and Grocery Code of Conduct and its response to it.
The government 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, as well as recommendations to enhance the independent reviewer’s role in overseeing the conduct and complaint-handling practices of the code arbiters.
The recommendations will be implemented as part of a broader package of reforms to the code following the conclusion of the 2023-24 review of the remaining provisions of the code.
Agriculture Minister Murray Watt said farmers and supermarket customers were not being treated fairly by the big supermarkets.
“We’ve been making clear for many months now that retailers should start dropping their prices to reflect the reduction in prices farmers are getting for their produce,” the minister said.
“Farmers deserve a fair price for their hard work and 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.
“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.”
However, shadow treasurer Angus Taylor said the government has been too slow to act.
He said the Opposition is eager to see what comes out of the review but was sceptical about the Federal Government’s sincerity on the topic.
“Labor has been taken, kicking and screaming on this one,” he told ABC Radio.
“It’s taken 100 days to appoint someone to do this, and we’ve seen their approach to competition policy historically has been closer to crony capitalism.
“We’ve seen that in the airlines market with their approach to Qantas and Qatar Airways.
“So we do want to see good strong competition policy, we do want to see a competitive retail sector, we do want to see lower prices for bread and dairy… and we will back any sensible policies on this.
“But there’s a long way to go and Labor’s credibility on competition policy is not strong.”
Original Article published by Chris Johnson on Riotact.