Australia introduces bill imposing big fines for supermarket misconduct

Metcash

27/11/2024 07:12

CANBERRA, Nov 27 (Reuters) - The Australian government
on Wednesday introduced a bill into parliament that would impose
potentially billion-dollar fines on big supermarket chains that
fail to comply with an industry code of conduct ensuring they do
not mistreat suppliers. 
    The legislation follows accusations from politicians and
farmers that the biggest supermarket chains are using their
scale to stifle competition, mistreat suppliers and overcharge
customers, charges the companies reject.  
    Large grocers including market leaders Woolworths  WOW.AX 
and Coles  COL.AX  along with Germany's ALDI and wholesaler
Metcash  MTS.AX  will be made, from April next year, to comply
with a code of conduct that has until now been voluntary.
    The legislation would impose fines of up to 10% of annual
turnover for breaches of the code, which mainly covers dealings
with suppliers. 
    Woolworths reported Australian food sales of A$48 billion 
($31 billion) in 2023, while Coles had A$37 billion and Metcash
A$10 billion. ALDI does not disclose its earnings.
    "We're cracking down on supermarket misconduct because it
will help shoppers at the register, and it will help farmers and
suppliers at the negotiating table," Assistant Treasury Minister
Andrew Leigh said in a statement.
    High inflation has eroded the approval rating of the
centre-left Labor government ahead of an election due early next
year. 
    Australia's supermarket sector is one of the most
concentrated in the world, commentators say. Woolworths and
Coles together sell two-thirds of all groceries. 
    Calls to break up big chains were rejected in a
government-commissioned report earlier this year.  
    Coles, Metcash and ALDI said they supported the mandatory
code of conduct. Woolworths referred a request for comment to
the Australian Retailers Association (ARA), which said it also
supported the code.
    "Positive supplier relations are a key priority for our
members, as is value for money for consumers," said the ARA's
chief industry affairs officer, Fleur Brown, in a statement to
Reuters.
    However, the association has raised concerns that the code
has gone beyond the recommendations of the
government-commissioned report, "particularly in areas
concerning individual penalties and retribution provisions", she
said. 
    


($1 = 1.5427 Australian dollars)

 (Reporting by Peter Hobson; Editing by Stephen Coates)
 ((peter.hobson@thomsonreuters.com;))