Supermarket Code of Conduct

The new Voluntary Code of Conduct by Australia’s largest supermarket chains, Woolworths and Coles, will be a turning point in grower–supermarket relationships; but only if it has legislative teeth.

It’s no secret growers are fed up with the supermarket wars as the duopoly battle for cheaper prices and greater market share, often at suppliers’ expense. The draft code covers issues such as promotion payments and shelf space, delisting rules, contact between supermarket buyers and suppliers, private-label products, and for the first time, a dispute resolution process. A grower will no longer be obliged to make payments to a retailer to compensate for ‘shrinkage’, another name for spoilage, stolen goods or goods lost due to accounting errors; and retailers can not force suppliers to make payments as a condition of stocking or listing their goods.The draft code will now be scrutinised by the Government and the Australian Competition and Consumer Commission (ACCC) to ensure there are no unintended consequences, such as higher prices for consumers. The new code will then be put out for public consultation, which will allow other retailers and suppliers not involved in the process to provide input. The draft code will undergo a two-stage regulatory impact statement before going through the cabinet process and implementation via regulation. Only time will tell if the regulations have the legislative teeth to address the current imbalance of power between supermarkets and suppliers.

This magazine has always been a strong supporter of Protected Cropping Australia, a national association funded and managed by commercial growers, suppliers and service providers. It has had little government support since its inception in 1990. Formerly known as the Australian Hydroponic & Greenhouse Association (AHGA), I have reported and participated in the industry’s growth over two decades. The success of the industry is best described by then Federal Minister for Fisheries, Forestry and Conservation, Senator Eric Abetz, at the 2007 National Industry Conference held in Launceston: “Your industry is the fastest growing food producing sector in Australia. It’s expanding at about the rate of 4-6% per annum. This sort of growth of course doesn’t just happen by chance. It happens through hard work, strong business relationships, and forward-thinking. You are an industry that embraces new technology. This industry is one that is viewed as self-reliant, creating its own success. In short, it’s an industry that’s going places,” he said.

So, it came as a surprise to read in the New Zealand press recently that the success of the Australian protected cropping industry is attributed to the national levy on the vegetable and potato industry. The press item was a puff piece, with a focus on a major Australian greenhouse tomato operation. It was a moot point that Australian fresh tomato growers do not contribute to the national levy! In reality, the industry’s success is because growers learnt to become self-reliant; because there is little government support.

Steven Carruthers

PH&G December 2013 / Issue 138