Woolworths gives qualified support to new mandatory Food and Grocery Code of Conduct

Sean Smith
The Nightly
Woolworths said it was considering the Government’s adoption of the recommendations made in the final report.
Woolworths said it was considering the Government’s adoption of the recommendations made in the final report. Credit: Asanka Ratnayake/Getty Images

Woolworths is at a loss about how to give farmers more information on the pricing of their crops and produce in the wake of the Federal Government’s backing for a new mandatory code of conduct.

Australia’s biggest grocer on Monday reiterated its support for the code becoming mandatory but stopped short of endorsing recommendations that put the major supermarket chains at risk of multi billion-dollar fines.

The Government has adopted all 11 recommendations of a review into the code undertaken by former Labor Minister Craig Emerson in response to concerns the voluntary code of conduct lacked muscle.

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The recommendations cover the big chains with annual revenue of more than $5 billion a year and include an anonymous complaints process managed by the competition watchdog, new avenues for mediation and arbitration, and fines of up to 10 per cent of a grocer’s turnover for breaches.

Woolworths said it was considering the Government’s adoption of the recommendations made in Mr Emerson’s final report.

“Woolworths Group reiterates its support for the code becoming mandatory and we firmly believe healthy retailer and supplier relationships are key to the continued success of our sector, as well as serving the needs of millions of customers,” it said.

“We welcome the decision to retain fast and cost effective avenues for dispute resolution, for the benefit of suppliers, especially smaller ones.”

However, it questioned how to achieve the report’s recommendations on informing farmers about how the prices for their produce and crops are determined.

“A key topic of this review is the supply of fresh fruit and vegetables and we note the specific recommendations for this sector in the final report,” Woolworths said.

“While there is broad support for greater price transparency in the sector, there isn’t yet consensus on how to deliver it.”

The review recommends that “where a grocery supply agreement for fresh produce does not include a price, it should include the basis for how price is determined”, including references to any online databases or information used by supermarkets to inform their views.

“This would provide greater transparency to suppliers and empower them to conduct a better-informed negotiation with supermarkets.”.

Farmers have long complained the big grocery chains are price gouging on fruit and vegetables.

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