Announcement date
24 June 2024
Link to announcement
Government response to the Independent Review of the Food and Grocery Code of Conduct
Problem being addressed
The voluntary Food and Grocery Code of Conduct (the Code) appears at Schedule 1 to the Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015. The Code was implemented in 2015 to address the imbalance in bargaining power between Australian supermarket retailers and their smaller suppliers. It was developed in response to concerns and complaints about the conduct of supermarkets towards their suppliers.
The purpose of the Code was to set minimum standards for behaviour by supermarkets towards their suppliers, and to provide an avenue for dispute resolution that is free of the fear of retribution.
Significant stakeholder feedback indicates that the Code has not been effective in achieving its purpose.
Proposal
As proposed in the Final Report of the Independent Review of the Food and Grocery Code of Conduct, make the Code mandatory with meaningful penalties applying to grocery retailers and wholesalers with an annual turnover of greater than $5 billion.
Assessed Impact Analysis outcome
Impact Analysis Equivalent
Assessment comments
The Office of Impact Analysis (OIA) does not assess the quality of reviews and documents used in lieu of an Impact Analysis (IA). Impact Analysis Equivalents (IAE) are assessed by OIA for relevance to the recommended option(s) and for the coverage of the 7 Impact Analysis questions conducted.
The OIA assessed that the options analysed in the certified review—Final Report of the Independent Review of the Food and Grocery Code of Conduct—and additional analysis prepared by the Treasury are sufficiently relevant to the proposal to meet the requirements in the Australian Government Guide to Policy Impact Analysis.
Regulatory burden
The Treasury estimates these measures will result in an increase in regulatory costs of $0.48 million per year, averaged over ten years.