Supermarkets warned

Albanese threatens to mandate grocery conduct code

Anthony Albanese has delivered a fresh warning to supermarket giants, telling them the current voluntary grocery code of conduct could become mandated if they don’t do the right thing.

Amid accusations supermarkets are not passing on the lower prices being paid to farmers on to consumers, the government has threatened to intervene.

Coinciding with new data showing inflation is at a 22month low, Coles this week slashed prices on beef and lamb by more than 20 per cent, and made reductions on a host of essential items.

But the Prime Minister has warned if a review – to be headed by former minister Craig Emerson – finds supermarkets are not doing the right thing, there will be consequences, including forcing retailers into a mandatory code rather than the current independent, voluntary one.

“We know that at a time when people are doing it tough, the big supermarket chains have been making record profits, and we know that there’s something out of sync there,” Mr Albanese said.

“And we say to all of the supermarkets and to big business, they have a responsibility to look after customers, and my government is prepared to take whatever action is necessary.

“We know at the moment, the code of conduct is a voluntary one, it’s industry-led. But we’re prepared to look at mandating, if that is necessary.”

In addition to the supplierfocused review, a Senate inquiry was set up in December to probe price gouging, and the consumer watchdog is doing its own work on supermarkets.

Mr Albanese said the government was committed to ensuring “every single reduction in costs” found by the big supermarkets is passed on to customers.

As it stands, the food and grocery code of conduct is a non-legislated commitment introduced in 2015 in a bid to improve business standards, that grocery retailers and wholesalers can choose to sign up to. Current signatories ALDI, Coles, Woolworths and the parent organisation of IGA are bound by the code.

There’s little in the code for shoppers, and it won’t necessarily mean lower prices at the checkout, but it does stipulate obligations and protections for supermarkets and the way they deal with suppliers.

The government review that Dr Emerson will lead will examine whether there should be a shift away from the voluntary, industry-led scheme to something stricter, with government oversight.

Australia’s peak farming body supports the probe, and said it hoped the review would give the code the “teeth it needs to fix a system failing consumers and farmers”.

National Farmers Federation president David Jochinke said the body had been calling for a mandatory code for a long time.