Consultation draft important step in finalising Code of Conduct

The release of the discussion paper Improving Commercial Relationships in the Food and Grocery Sectorby the Federal Government is an integral part of finalising a Food and Grocery Code of Conduct that provides greater transparency and certainty for food and grocery suppliers in their transactions with supermarkets, said the Australian Food and Grocery Council (AFGC) today.

AFGC CEO Mr Gary Dawson said that today’s release is an important step towards achieving a meaningful and enforceable Code that will improve the operation of one of the most dynamic and competitive sectors of the economy – the fast moving consumer goods sector.

“We congratulate the Government for progressing the Code as an industry-led solution to problems impacting on suppliers and consumers,” said Mr Dawson.

“The Food and Grocery Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers and will provide greater certainty and clarity about dealings in the industry without adding unnecessary complexity or cost.

“This consultation process is important in ensuring that the Code can be tabled in Parliament as a regulation under the Competition and Consumer Act 2010 to give it real teeth,” said Mr Dawson.

Key aspects of the Code include:

  • Tough restrictions on retrospective and unilateral variations to grocery supply agreements;
  • Greater transparency on the basis of shelf allocation for branded and private label products;
  • Recognition of the importance of intellectual property rights and confidentiality in driving innovation and investment in new products; and
  • A low cost and fast track dispute resolution mechanism.

Mr Dawson also welcomed the announcement by Coles that it will implement a Supplier Charter.

“The announcement by Coles today to appoint former Victorian Premier Jeff Kennett indicates its ongoing support for the Code. Yet the finalisation of the Code is essential in driving collaborative win-win approaches through the supply chain rather than prolonging ongoing tensions across the supply chain,” said Mr Dawson.

“Mr Kennett’s appointment will provide another mechanism for suppliers to raise issues and address genuine competition concerns,” concluded Mr Dawson.



 AFGC Media Contact: James Mathews 040 741 6002