ACCC working to ensure a successful Food and Grocery Code

21 October 2015

The Australian Competition and Consumer Commission will do what it can to ensure the Food and Grocery Code of Conduct succeeds, Chairman Rod Sims said today at an industry forum hosted by the Australian Food and Grocery Council (AFGC) in Canberra.

“We are confident the Code can succeed in achieving its objectives. It can redress the imbalance in bargaining power that often exists between suppliers and larger grocery retailers by prohibiting certain types of unfair conduct, and by requiring retailers to deal with suppliers in good faith at all times,” Mr Sims said.

Mr Sims welcomed the approach of the AFGC which has put more than 1000 people from over 80 companies through training sessions on the Code. He said, however, that the major retailers haven’t got off to a great start in presenting new supply agreements.

“We have written to these retailers expressing our concerns. This action, which we made public, as some suppliers urged us to do, was not a signal that the Code faces great difficulties; it was, instead, a signal that we will do what we can to ensure the Code succeeds,” Mr Sims said.

“Ensuring suppliers are aware of their rights is crucial to the success of the Code. Our public action was designed to help with this.”

Mr Sims also outlined the ACCC’s plans for an increased focus on the agricultural sector, which includes establishing a dedicated Agricultural Enforcement and Engagement Unit and a new Agriculture Consultative Committee. The Government will also shortly appoint an Agriculture Commissioner.

“We are planning to enhance our understanding of the competitiveness of agricultural supply chains through market studies…assist the agricultural sector deal with market concentration and fair trading issues...[and] identify key supply chain issues across the agricultural sector for enforcement focus, investigation and prosecution.”

In addressing emerging issues in the food and grocery sector, Mr Sims discussed proposed changes to the country of origin labelling regime and the role of regulators.

“The proposed new system represents major change; it would reshape the obligations of traders, requiring most food to display the percentage of local content in addition to stating a country of origin.

“The government’s proposal also transfers roles traditionally undertaken by food regulators to the ACCC and state and territory Australian Consumer Law (ACL) regulators.”

Mr Sims said the ACCC would look to build awareness and compliance through outreach.

“Naturally, if we see businesses doing the wrong thing, and we can’t bring about a change through our engagement, it will be crucial to the success of the new regime that we also have an enforcement role. The credibility of the new regime depends, of course, on the regulator playing its role, and being seen to do so.”

Mr Sims also discussed the ACCC’s approach to protecting consumers, competition and innovation by ensuring truth in advertising.

“We have been very busy in the food sector, focusing on the powerful promotional claims that go to the premium nature of a product or a particular production process.”

“We have in particular focused on ‘free range’ claims particularly those of egg producers but also addressing representations made in the pork industry,” Mr Sims said.

Read the Chairman’s speech

Release number: 
MR 200/15
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