Draft food code aids supermarket ‘power imbalance’

By Andy Wilson

Nov 1, 2024

Fresh produce suppliers are wondering who Craig Emerson and Treasury officials have been consulting over the draft Food and Grocery Code of Conduct, claiming the code will only benefit supermarkets. Photo by Simon Bingham

Australia’s peak produce body has rejected the Federal Government’s recently released draft Food and Grocery Code of Conduct, claiming the code will only benefit supermarkets.

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The NFF horticulture council confirmed on Monday, October 28 that it does not support the updated code recently released for industry and public comment.

The council’s chair Jolyon Burnett said the industry had welcomed some of the improvements proposed for the code including increased penalties, more accessible dispute resolution processes and it being a mandatory.

However, Mr Burnett said core concerns of the fresh produce industry were still ignored, despite the review’s chair Dr Craig Emerson recognising the ‘unique’ vulnerability growers have to supermarkets exercising their market power.

“Dr Emerson started his review of the code in January and in our first submission to Dr Emerson, and at every opportunity since, the council has said perishable horticultural products and their domestic retail and wholesale markets must be regulated in a way that is consistent and fit for purpose,” Mr Burnett said.

“But despite the time available and keen public interest, neither Dr Emerson or the Treasury appear to have been interested in understanding how fresh produce supply chains work and how best to protect vulnerable suppliers.

Mr Bennet said the current draft did not deliver clarity and certainty and only required supermarkets to take ‘due care’ when telling suppliers how much produce they expect to buy and to be ‘reasonable’ with produce standards and specifications.

Mr Bennet said the code also lacked guidelines and ran ‘entirely counter’ to its intent.

“Anyone who has spent a minute in fresh produce will tell you it’ll only be supermarkets that benefit from these vague, subjective and ambiguous terms that lack any precedents.

“Elsewhere, protections in the draft Code stopping supermarkets shifting risk and cost onto suppliers have been rendered redundant by allowing supermarkets to justify circumventing them.

“Fresh produce suppliers wonder who Dr Emerson and Treasury officials have been consulting; we had high expectations given the rhetoric about cracking down on poor trading practices from the Prime Minister himself.”