With the federal election concluded, the Albanese Labor Government now has the opportunity to address the findings of the most significant inquiry into supermarket behaviour in decades. The Australian Competition and Consumer Commission's (ACCC) Supermarkets Inquiry Final Report, released during the election campaign, confirmed long-standing concerns over the market dominance of supermarket chains and their treatment of fresh produce growers.
The report revealed that Coles and Woolworths possess considerable market power (described as oligopsony power), which they use to control growers. It also found that Australian supermarkets are among the most profitable in the world, have increased their margins over the past five years, and have created high barriers to entry that deter new competitors. Moreover, growers have been funding promotions and rebates that benefit retailers, further tilting the balance of power.
The ACCC warned that if current trends continue, Coles and Woolworths will grow even more dominant, leading to long-term harm to the sustainability of Australia's fresh produce sector.
While these findings are troubling, they are not surprising to many in the industry. What's different now is the level of public and political awareness. Growers have historically stayed silent, fearing commercial retaliation. But now, public trust in major retailers has eroded as reports of grower exploitation surface.
There is bipartisan political support for reform. The Greens, Liberals, and Nationals have all backed proposals for diversifying the grocery market. Prime Minister Anthony Albanese has stated that "Australian farmers deserve a fair price for their goods."
In response, the Food and Grocery Code of Conduct has been made mandatory, with strengthened provisions. These include greater penalties—up to $10 million or a percentage of turnover—for breaches, requirements for written supply agreements, independent dispute resolution, and protections against retaliation for suppliers exercising their rights.
The ACCC has made several key recommendations:
Supermarkets should not be able to opt out of minimum protections in the Food and Grocery Code. They should provide suppliers with detailed supply forecasts and more transparency in weekly tendering processes, pricing, and volume agreements. They should also avoid unilateral price or volume changes, allow suppliers to use their own branding, and disclose how supplier-funded retail media contributions are used. Suppliers selling through intermediaries should receive clearer information, and supermarket-branded product suppliers should get earlier order confirmations.
With the inquiry complete and public support mounting, stakeholders are urging the government to enact substantial reforms. These include increasing transparency, improving accountability, and ensuring that fresh produce growers receive fairer treatment and pricing. The next phase will determine whether these recommendations translate into meaningful change.
For more information:
APAL
Tel: +61 3 9329 3511
Email: [email protected]
wwww.apal.org.au
