201311.18

Government welcomes industry led protection for suppliers

The Federal Government has welcomed the release of a draft Food and Grocery Code of Conduct by Coles, Woolworths and the Australian Food and Grocery Council to balance out relationships between retailers and suppliers.

It’s pleasing to see the industry collaboratively working together to achieve an outcome which regulates the way suppliers and retailers interact.

For some time there have been concerns about the balance in the relationship between the supermarkets and suppliers and this draft code is an important, substantial and constructive step in improving those interactions.

The Coalition believes this first step in improving competition in the grocery sector will help boost productivity, innovation and investment.

It should be noted that the previous Labor Government dragged its heels for six years before almost sabotaging the process near the end of its term in trying to ‘game’ the process for political advantage.

The Coalition managed to get the parties back around the table with clear and consistent guidance about the Government’s expectations and encouragement for an industry-led solution from those who know best the supply chain pressures and tensions.

The Government and the ACCC will now analyse the draft industry led code to ensure there are not unintended consequences before putting it out for public consultation which will allow other retailers and suppliers not involved in the process to provide input.

The draft code will then undergo a two stage regulatory impact statement and go through the cabinet process before being implemented through regulation.