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'Horticulture squeezes the lemon on supermarket reform'

The NFF Horticulture Council has today welcomed both the final report by Dr Craig Emerson as part of his review of the Food and Grocery Code of Conduct, and the Federal Government response.

The final report builds on an earlier interim report tabled by Dr Emerson that foreshadowed already firm recommendations on making the Code mandatory, introducing significant penalties for non-compliance, and a more accessible dispute resolution process.

NFF Horticulture Council Chair, Jolyon Burnett, said the industry thanked Dr Emerson for his work and would now take some time to digest both his recommendations and the Government response before responding in detail.

"At face value, we can see benefit in requiring grocery agreements include the basis for determining prices, ensuring supermarket forecasts of required volumes are conducted with due care, and that produce standards and specifications must be reasonable," Mr Burnett said. "An updated Code, based on the recommendations accepted by Government, would be a vast improvement on the one currently in effect."

"Expectations across the horticulture industry have been high since Dr Emerson in his interim report recognised the perishable nature of fresh produce leaves growers uniquely vulnerable, and called for further submissions on what additional protections, measures or obligations could be inserted into the Code to address this market power imbalance.

"In response, the Council and its members have worked up a number of practical recommendations that we believe are very modest in terms of the burdens or restrictions they place on trading parties, while returning outsized benefits in transparency and fairness.

"At this stage, some of these measures to further protect fresh produce growers appear to have been left on the table by Dr Emerson, including creating a role for independent assessors for either party to call on to help resolve disagreements concerning fresh produce specifications, making supermarkets report publicly and to suppliers on the accuracy of their volume forecasting, and removing rebates entirely.

"Along with prohibiting without exception, supermarkets from charging suppliers for costs that are outside their control, including for example where there is wastage after the transfer of ownership.

"We have also been disappointed that while Dr Emerson has referenced the inequities experienced by greenlife growers supplying Bunnings, his recommendations do not include bringing Bunnings under the Code. This in our view misses an important opportunity to extend some protection to greenlife growers and ensure that Bunnings, as the dominate retailer of plants, does not abuse its power.

"However, we are encouraged that in its response, the Government expresses 'concern about the allegations of retailer conduct towards suppliers of nursery plants… especially those with significant bargaining power' and has committed to monitoring their conduct.

"Bunnings is now on notice to come to the table and negotiate a fairer trading environment for greenlife growers.

"We've been on quite a journey, where the Australian public have been left a clear impression of the raw deals our growers are getting with supermarkets and Bunnings. We have a rare opportunity to reform our markets in a way that puts more money in the back pocket of growers for all the risks they take on our behalf, and aren't now going to be taking a backward step.

"The devil, as they say, will be in the detail. And any result not yet guaranteed. So, the focus of the Council will now shift to engaging with Government on the process of drafting the updated Code."


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