Food and Grocery Code of Conduct Review

The Australian Food and Grocery Code of Conduct?is a prescribed voluntary code and is prescribed under Competition and Consumer Act 2010. The?Competition and Consumer (Industry Codes–Food and Grocery) Regulation 2015?(the Code) was introduced to improve transparency and certainty in the commercial dealings between retailers, wholesalers and suppliers, and provide an effective process for parties to resolve their disputes.

The Australian Food and Grocery Code of Conduct (AFGC) is scheduled to sunset (be automatically repealed) on 1?April?2025. Prior to sunsetting, a review of the Code is also required to determine whether the Code remains fit for purpose.

A review into the dispute resolution provisions (Part 5 of the Code) was conducted earlier this year and the report is now with the Government for consideration. The review of the remaining provisions of the Code was announced on 3?October 2023.

At this point in time a reviewer to undertake the review of the remaining provisions of the Code has not been announced, nor the specifics of the time frame, except it needs to be completed by June 2024. However, Treasury has advised that the review will undertake two key activities:

1. Assess the effectiveness of the Code provisions in achieving the purpose of the Code to improve the commercial relationship between retailers, wholesalers and suppliers in the grocery sector, and
2. Consider the need for the Code, including whether it should be remade, amended or repealed.

In evaluating the purpose and features of the Code, the review will have particular regard to:

1. The impact of the Code in improving commercial relations between grocery retailers, wholesalers and suppliers,
2. Whether the Code’s provisions should be extended to other retailers or wholesalers operating in the food and grocery sector,
3. Whether the Code should be made mandatory, and
4. Whether the Code should include civil penalty provisions.

AUSVEG will be preparing a submission into the Australian Food and Grocery Code of Conduct Review. In preparation for the review, we are seeking detailed information from the vegetable sector on their experiences dealing with the retailers and how the Food and Grocery Code be modified to ensure a more even playing field.?

Some suggestions already under consideration by AUSVEG for the submission include:

1. Making the AFGC mandatory rather than voluntary.
2. Enable greater equity around the weekly price negotiations for perishable goods
3. Replacing supply agreements with greater contractual certainty, including price.
4. Implementing fines and financial penalties for those businesses or individuals that breach the AFGC, including mechanisms to compensate disadvantaged suppliers.
5. Code Arbiters appointed independent of the retailers.
6. Access to education and training so that the industry better understands the AFGC and therefore level the playing field.
7. Enable mechanisms that require increased transparency and reporting from the retailers.

What can you do?

1. AUSVEG will have two ‘grower only’ webinars as forums to express concerns and provide ideas for improvements to the AFGC. These will be on Friday 1 December at 11am-12pm and on Tuesday 5?December at 4pm-5pm.?If you would like to attend one of these webinars please email [email protected] and you will be sent an invitation (webinar link) to attend. These forums are for growers/suppliers only and members participating will be asked to respect privacy and Chatham House rules will apply.
2. Please write to [email protected] with any case studies and examples that can be used to back up any changes or modifications to the AFGC.?AUSVEG will work with growers to ensure they are comfortable providing sensitive information and how we may be able to de-personalise to ensure anonymity but still maintain the rigour of the information.
3. Provide data or any documents (i.e. emails etc) as evidence to support changes to the AFGC.

AUSVEG is already collating data from growers in relation to long-term price trends, supply arrangements, margin markups and retailer behaviour complaints. AUSVEG has also engaged commercial lawyers to review current trading supply arrangements and commitments.