Supermarkets to face fines as Government pushes on with tougher code of conduct to bring down grocery costs

Anthony Albanese has said he “wants a fair go for families and a fair go for farmers” as he outlined the Federal Government’s plans to get tough on the nation’s supermarket giants.

The supermarkets will face hefty fines for breaching the proposed mandatory code of conduct in a move the Prime Minister said would “absolutely” bring down prices for shoppers.

But the best route to deal with rocketing grocery bills has descended into political mud-slinging, with Opposition Leader Peter Dutton accusing the Government of setting up a “Mickey Mouse review” where it dictated the outcomes.

Former Labor minister Craig Emerson released an interim report on Monday from his review of the code of conduct, which was developed by the big supermarkets and has been voluntary since its introduction in 2015.

He recommended it be made mandatory and the Australian Competition and Consumer Commission be given enforcement powers with the prospect of fines of at least $10 million and up to 10 per cent of turnover for major breaches.

Mr Albanese welcomed the plan.

“The Government wants a fair go for families and a fair go for farmers, and I think that’s what Australians want as well,” he said. “Dr Emerson’s review is certainly looking at the impact on consumers, not just on suppliers.”

The final report is due in June, but Treasurer Jim Chalmers said the Government was “working on these sorts of competition reforms around the clock”.

Dr Chalmers, who also flagged he will unveil broader changes to competition rules governing mergers later this week, backed in principle the eight-firm recommendations released on Monday. “The current voluntary code is too easy to walk away from and we want to change that,” he said.

There will be further consultation over the next fortnight, with Dr Emerson still forming recommendations on how mediation and minimum standards should work.

Woolworths has backed making the code mandatory, but says it should be expanded to cover global competitors such as Amazon and Costco, rather than only the proposed quartet of Woolworths, Coles, Aldi and wholesaler Metcash.

A spokesman for the supermarket giant said making the code mandatory would build public trust and “level the playing field for retailers and wholesalers alike”.

Coles also pledged to work constructively with Dr Emerson for the remainder of the review.

“We remain committed to the objectives of the code in delivering value to our customers while maintaining strong, collaborative relationships with our valued suppliers,” a spokesperson said.

The Coalition’s preferred policy is to give the ACCC powers to seek to break up supermarket businesses or force them to sell sites where there is a concentration of market power.

Dr Emerson said forced divestiture could result in greater market concentration rather than increased diversity, and may lead to job losses.

The Nationals have been pushing for divestiture powers for more than a year, but while they see it as a priority, some Liberals say it’s not a top-order issue.

Competition Minister Andrew Leigh said it appeared the Nationals were “tigers in opposition but kittens in the Cabinet”.

Mr Dutton said on Monday it was “not unreasonable” for Australia to examine such powers given they existed in places such as the US, Canada and the UK.

“This is a Mickey Mouse review that’s been conducted by a Labor mate with an outcome predetermined by the Treasurer. And there’s not going to be any price relief here for consumers because Mr Chalmers and Mr Albanese know that their policies have directly contributed to higher prices,” he said.