Competition Inquiries - A Snapshot for Growers

Competition Inquiries – A Snapshot for Growers

There is a lot happening in the Competition space at the moment, all of which are of interest to the horticulture industry. Here is a quick snapshot of each to bring you up to speed:

Food and Grocery Code of Conduct (FGCC)

The FGCC is an industry code in Australia aimed at regulating the conduct of supermarkets and wholesalers in their dealings with suppliers. Here are some key issues covered in the FGCC:

  •       Fair Dealings: The code ensures that supermarkets and wholesalers deal with their suppliers fairly and in good faith.
  •       Contractual Arrangements: It regulates the terms of agreements between retailers and suppliers, including issues like payment terms, price variations, and contract duration.
  •       Dispute Resolution: The FGCC provides mechanisms for resolving disputes between retailers and suppliers, including arbitration processes.
  •       Confidentiality: It includes provisions to protect confidential information shared between retailers and suppliers during negotiations and business dealings.
  •       Unilateral Changes: Retailers are prohibited from making unilateral changes to agreements with suppliers without providing reasonable notice and consultation.
  •       Compliance and Enforcement: The code establishes procedures for monitoring compliance and enforcing its provisions, including penalties for breaches.

Overall, the FGCC aims to promote fairness, transparency, and accountability in the food and grocery supply chain, benefiting both suppliers and retailers.

From a supplier’s perspective, some key issues with the FGCC include:

  • Imbalance of Power: Suppliers often feel that there is still an imbalance of power in their relationships with retailers, despite the code’s provisions. Retailers may still wield significant negotiating power, leading to unfavorable terms for suppliers.
  • Payment Practices: Despite regulations on payment terms, some suppliers may still face delayed payments or other issues related to invoicing and payment processing, impacting their cash flow and financial stability.
  • Price Negotiations: Suppliers may find it challenging to negotiate fair prices for their products, especially when faced with pressure to lower prices or provide additional discounts to secure contract with retailers.
  • Dispute Resolution: While the FGCC provides mechanisms for resolving disputes, some suppliers may encounter difficulties in accessing these processes or may feel that outcomes are not always fair or impartial.
  • Confidentiality Concerns: Suppliers may be reluctant to share sensitive business information with retailers due to concerns about confidentiality protections under the code.
  • Enforcement Challenges: Suppliers may feel that enforcement of the code is insufficient or inconsistent, leading to a lack of accountability for retailers who breach its provisions.

Here is a link for more on the Treasury Review of the Food and Grocery Code of Conduct.

Senate Select Committee on Supermarket Prices

On 6 December 2023, the Senate resolved that the Select Committee on Supermarket Prices be established to inquire into and report on the price setting practices and market power of major supermarkets.

Click here for the NFF Hort Council’s recent submission. ABGC sits on the Hort Council with a range of other Australian horticultural commodities.

ACCC Inquiry into Supermarkets and Price Gouging

The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority tasked with enforcing competition and consumer protection laws in Australia.

An inquiry into supermarkets and price gouging is focusing on investigating whether supermarkets are engaging in unfair pricing practices.

Treasury Competition Review

The Competition Review will provide advice to the government on how to improve competition across the economy.

The Review will look at competition laws, policies and institutions to ensure they remain fit‑for‑purpose for the modern economy, with a focus on reforms that would increase productivity, reduce the cost of living and/or lift wages.

The Review team will publicly consult and issue papers on specific reform topics over the next 2 years.

 

YES! Growers have a chance to act on this!

Banana growers can take action by prioritizing 10-15 minutes to confidentially complete NFF Hort Council’s survey. This will continue to help inform their responses and submissions to the above-mentioned inquiries. ABGC will continue to have a seat at the Hort Council table to represent the needs of our members.

Grower membership is essential to supporting ABGC’s leadership and advocacy role. To become a member*, go to abgc.org.au/membership or contact Kathryn Dryden via members@abgc.org.au or 0455 553 596.

*Membership fees are different to the compulsory PHA levies. ABGC members also receive great benefits!