Food and Grocery Code should ‘go ahead as is’ say supermarket majors and AFGC
The Retail and Supplier Roundtable (RSR), which is comprised of Australian supermarket giants Coles and Woolworths, and the Australian Food and Grocery Council (AFGC), has said in its submission to Senate inquiry into the Food and Grocery Code of Conduct that it believes the Code should “proceed quickly and unchanged through its disallowance period”.
The Senate Economics Legislation Committee is currently hearing submissions to its Inquiry into the Competition and Consumer (Industry Codes — Food and Grocery) Regulation 2015. On 5 March 2015, the Economics Legislation Committee resolved, under Standing Order 25(2)(a), to inquire into and report by 31 March 2015 on regulation of the Food and Grocery Code of Conduct.. On 26 March 2015, the committee resolved to extend the reporting date to 14 May 2015. Submissions closed on 13 March 2015.
The RSR, which was instrumental in the development of the Code, said it believed that the Code should “not be subject to further amendments that would alter either its spirit or practical outcomes”.
“Amendments would be imprudent as they would necessarily involve further delays and more consideration of issues that have already been exhaustively considered, discussed and negotiated,” the RSR said in its submission.
The RSR noted that a thoroughgoing review of the Code’s operations and effectiveness had already been scheduled and that “this review would be the appropriate forum to canvass further changes in the light of the industry’s practical experience of the Code in operation”.
All major grocery suppliers should participate
The RSR said the effectiveness of the Code would be “enhanced by the broadest industry coverage”.
“The RSR takes the view that once the disallowance period has expired all the major grocery retailers operating in Australia, with revenues exceeding $1 billion a year from a supermarket business, should become signatories to the Code,” the RSR said in its submission. “Any uncertainty regarding changes or disallowance of the Code during this period will have a bearing on the timing of a retailer’s decision to formally sign on to the Code,” it said.
Timeline of Code development
The development of the Code has been an industry-led initiative by the RSR, with agreement by the RSR members being reached on the terms of a draft Code on 18 November 2013. The matters and issues addressed in the draft Code were informed by the collective experiences of the supplier members of the AFGC, including its small and medium enterprise CEO Forum, and Coles and Woolworths.
Following an extensive review by Treasury and the Office of Parliamentary Counsel (OPC) a revised Code was provided to AFGC, Coles and Woolworths for consideration. Negotiations between Treasury, OPC, AFGC, Coles and Woolworths continued and the new version was released on 6 August 2014 to be the basis for public consultation.
Public consultation processed took place from 6 August 2014 to 12 September 2014 under Treasury’s Regulatory Impact Assessment process, which included a release of the Discussion Paper about Improving commercial relationships in the food and grocery sector. During the public consultation process, 33 submissions were received, including 13 confidential submissions. Subsequently, sections of the Code were redrafted to take account of recommendations flowing from the public consultation.
From October 2014 to February 2015, negotiations took place with Metcash Trading and ALDI.
On 12 December 2014, AFGC, Coles, Woolworths, Treasury and OPC concluded negotiations on the content of the Code.
On 3 March 2015, the Food and Grocery Code of Conduct was tabled in the Federal Parliament.
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