Eight months after the introduction of Australia's mandatory supermarket code of conduct, the federal government has announced a US$1.3 million (A$2 million) grant program aimed at helping small businesses and fresh produce suppliers better understand their rights under the updated rules.
The revised code, introduced in April, applies to major supermarket chains including Woolworths, Coles, ALDI, and Metcash. It was developed following a review that found small and medium suppliers, particularly in the fresh produce sector, were vulnerable to unfair practices during negotiations with large retailers.
The code requires supermarkets to negotiate in good faith and prohibits retaliatory actions such as delisting products or moving them to less prominent shelf positions. Each retailer must also appoint independent mediators to handle disputes with suppliers. Breaching the code can result in penalties of up to US$6.6 million (A$10 million), three times the value of any benefit gained, or 10% of the company's annual turnover.
To strengthen supplier awareness, the government announced that industry associations within the fruit, vegetable, and mushroom sectors will be eligible to apply for the new education grants. The funding will support regional outreach and supplier training to improve compliance and understanding of the code's protections.
Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh said the program will help ensure fairer conditions in the supply chain. "This program will give smaller suppliers the knowledge and confidence to stand up for themselves, ensuring Australia's food system is fair from paddock to plate," he said.
Minister for Small Business Anne Aly added that the initiative would enable smaller producers to "stand up to major supermarkets and get a fair deal."
Applications for the grant program will open on December 5, with up to three grants expected to be awarded between 2025–26 and 2027–28.
The supermarket sector remains under government scrutiny following several policy moves in recent months. In October, the Treasury released draft legislation proposing a ban on supermarkets charging excessive prices in an effort to address concerns over price gouging. It also launched consultations on whether current unit pricing regulations adequately prevent "shrinkflation," where product sizes are reduced without a corresponding price decrease.
The government's latest funding program aims to support suppliers through education and transparency initiatives while maintaining oversight of supermarket pricing and trading practices.
Source: SmartCompany
