Supermarkets under review by ACCC

27th August 2020 | Eativity editors

The National Party has secured an inquiry by the Australian Competition and Consumer Commission (ACCC) into the domestic fresh food and dairy supply chain, from the farmgate through to the retailer, including examining the treatment of farmers in the marketplace. 

Minister for Agriculture and Deputy Leader of the Nationals, David Littleproud, says the government has secured a three-month ACCC independent inquiry into the supply chain for fresh foods such as meat (beef, lamb, pork, chicken), eggs, seafood, fruit and vegetables. Critically, this inquiry will examine whether the new Dairy Code should also be extended across the entire domestic supply chain to include retailers. 

Off their trolley? The big supermarkets will be under the ACCC’s spotlight.

“The Nationals fought to deliver this inquiry in response to long-held concerns about bargaining imbalances that currently exist and the misuse, and in some cases the abuse, of this power by some sections of the fresh food supply chain,” the Minister says.

“Australian farmers take considerable risks and work incredibly hard to grow the fresh and affordable food we all take for granted. But there are concerns that once farm produce is harvested or processed and sent off to market, producers have little bargaining power and are at the mercy of the powerful supermarkets when it comes to the price they are paid.

“Unfortunately, not all interactions between farmers and supermarkets are conducted fairly. There are bargaining imbalances and other serious issues that need to be looked at.”

In 2019, Coles had to $5 million+ to Norco dairy farmers after it was found it hadn’t passed on the full amount of a milk price rise, despite claiming it had in a marketing campaign. 

Last year, Coles had to fork out big bucks to Norco dairy farmers after cutting them short.

“This inquiry will provide Australian farmers across all food-producing sectors with an opportunity to submit evidence, raise concerns and share their own experiences in the domestic marketplace,” Littleproud says. The ACCC has guaranteed that the inquiry will accept confidential submissions so that farmers can provide evidence of harmful practices without the fear of retribution by the major supermarkets.

The National Farmers’ Federation (NFF) has welcomed the announcement of the inquiry. NFF Chief Executive Tony Mahar says there continues to be systemic power imbalances across Australia’s food supply chain, and an inquiry into these markets is a prudent step.

“The importance of a robust, sustainable food supply chain, from paddock to supermarket, has come into sharp focus during the COVID-19 pandemic,” he says. “Letting sunlight in across the whole food supply chain will benefit all involved, from farmers to consumers.

“Inquiries into the meat, dairy and chicken sectors have revealed that too often, farmers, as the first link in the supply chain, face real challenges in their ability to negotiate.”

The inquiry begins on Monday and the ACCC will report to government by November 30.