The Australian government has tabled the Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Bill 2024 in parliament, targeting supermarket misconduct with hefty fines.
The legislation aims to impose potential multi-billion-dollar fines on supermarket chains that fail to adhere to an industry code of conduct ensuring fair treatment of suppliers.
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The bill stipulates that penalties for poor supplier treatment in violation of the code should not be considered just a business expense. It sets out that maximum fines under the Food and Grocery Code could be whichever is the greater: A$10m ($6m), three times the value of the benefit from the misconduct, or 10% of the previous year’s turnover.
The government describes them as “serious penalties” and “the highest corporate penalties under any industry code”.
In addition to increased maximum fines, the bill will also raise infringement notice penalties for alleged breaches of the code.
The Australian Competition and Consumer Commission (ACCC) can issue the notices when it reasonably believes a supermarket has violated the code. Infringement notices serve as an efficient, low-cost enforcement method for minor infractions.
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By GlobalDataThe measure is part of a wider competition policy agenda by the government, aiming to give families and farmers a fairer deal. This includes tackling shrinkflation through enhancements to the unit pricing code and collaborating with states and territories on planning and zoning regulation reforms. These efforts are intended to foster competition and curb land banking.
The bill also mandates that the ACCC be informed of every merger in the supermarket sector and allocates an additional A$30m in funding for the ACCC to address misleading pricing practices in supermarkets and retail sectors.
Regulations for the new mandatory Food and Grocery Code of Conduct are set to be established in 2024, with the code taking effect from 1 April 2025.
The updated code is designed to bolster competitiveness in supermarkets so that Australians can benefit from optimal pricing.
Australia Agriculture, Fisheries and Forestry Minister Julie Collins said: “This is about getting a fair go for families and a fair go for farmers. The Albanese Labor government knows how vital our agriculture sector is to Australia, and the Australian economy.
“Our farmers produce exceptional, high-quality food and deserve to be on a level playing field with supermarkets. Since coming to government in 2022, we have been delivering for Australian farmers and producers, and today’s important reforms are another significant step forward.”
The legislation responds to allegations from politicians and farmers accusing major supermarket chains of exploiting their size to suppress competition, mistreat suppliers and overcharge customers, Reuters has reported.
These charges were denied by the companies.
Coles, Metcash and Aldi have expressed their support for the mandatory code of conduct. Woolworths deferred comment to the Australian Retailers Association (ARA), which also backed the code.
Law firm Gerard Malouf & Partners recently launched class action proceedings against Australian supermarket giants Coles and Woolworths for allegedly misleading customers.
