Australia enforces strict supermarket code

Australia’s federal government announced on Monday that it could impose billion-dollar fines on large supermarket chains that fail to comply with a new mandatory industry code of conduct aimed at addressing pricing pressures on suppliers.

The code, previously voluntary, will now apply to grocers with annual revenues exceeding A$5 billion (US$3.3 billion), including Woolworths, Coles, ALDI, and Metcash.

The supermarkets could face fines of up to 10 per cent of their annual turnover for breaches. For instance, Woolworths reported Australian food sales of A$48 billion in 2023, Coles A$37 billion, and Metcash A$10 billion, while ALDI’s earnings are undisclosed.

This decision follows a report by former competition minister Craig Emerson, which found the current code ineffective in balancing power between supermarkets and suppliers, particularly farmers.

Government officials, including Treasurer Jim Chalmers, stated that the aim was to ensure fairness for families and farmers.

The National Farmers Federation welcomed the changes, asserting they would protect farmers from unfair pricing practices. Additionally, the Australian Competition and Commission will report on consumer pricing by February 2025.

Attribution: Reuters.