Australia’s major supermarkets and grocery wholesalers are subject to a compulsory Food and Grocery Code of Conduct from 1 April 2025.
The Australian Competition and Consumer Commission (ACCC) has declared the enforcement of the revised code.
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Enacted under the Competition and Consumer Act, the code applies to retailers and wholesalers with revenues exceeding A$5bn ($3.13bn) from their supermarket or grocery wholesaling operations in the preceding fiscal year.
The code automatically extends protection to suppliers dealing with these entities. It outlines the procedures for how supermarkets and wholesalers should engage in negotiations and establish contracts with their suppliers.
It mandates the creation of written supply agreements, adherence to lawful conduct and the obligation to treat suppliers with good faith. It also safeguards suppliers from any form of retaliation when they choose to assert their rights under the code.
The ACCC has been granted new powers to enforce compliance with the Food and Grocery Code of Conduct. It can issue infringement notices and initiate legal proceedings against businesses that violate the code.
In cases of severe violations, penalties can escalate to $10m per incident or three times the benefit obtained from the contravention, or if such a value is indeterminable, up to 10% of the company’s annual turnover from the previous year.
These enhanced penalties serve as a significant deterrent to ensure adherence to the code’s regulations.
The ACCC has set up an online portal enabling anonymous reporting of suspected infractions of the code, and highlights that retail pricing strategies, merger reforms and addressing competition challenges will be at the forefront of its agenda for the fiscal year 2025/26.
In September 2024, the ACCC published an interim report highlighting a significant decline in consumer trust towards the nation’s leading supermarket chains, Coles and Woolworths.
In March 2024, the commission completed its investigation into the supermarket sector and released 20 recommendations aimed at improving competition within the market.
