Australia plans to enforce substantial fines on supermarket chains engaging in unfair practices against suppliers. The government announced new regulations on Monday, mandating that supermarket giants earning over 5 billion Australian dollars annually comply with a previously voluntary industry code of conduct.
The new rules will apply to Woolworths, Coles, Aldi, and Metcash, collectively dominating over 80 percent of the market, and may extend to other retailers like Costco as their revenues grow. Breaches of the code could result in fines up to 10 percent of their annual turnover, potentially amounting to billions of dollars.
To support these measures, the government intends to establish a confidential complaints mechanism for suppliers and whistleblowers under the Australian Competition and Consumer Commission (ACCC).
Treasurer Jim Chalmers, along with assistant competition minister Andrew Leigh and agriculture minister Murray Watt, emphasized that these initiatives aim to ensure fairness for families and farmers. They aim to enhance supermarket competitiveness to benefit consumers with better prices.
The reforms follow a report by Craig Emerson, highlighting the inadequacy of the previous code in addressing the power imbalance between supermarkets and suppliers. Emerson underscored suppliers’ fears of retaliation and stressed the necessity for robust enforcement mechanisms.
Australia’s grocery market is highly concentrated, with Woolworths and Coles alone commanding about two-thirds of total sales. Recent research by Choice revealed minimal price differences between these major chains for a typical grocery basket.
These regulatory changes mark Australia’s efforts to curb anti-competitive behavior in the supermarket sector, aiming for fairer consumer prices and stronger supplier protections.
