Sunday, February 25, 2024

A fairer and more competitive supermarket sector

The Australian Government welcomes the publication of the 2022-23 Annual Report of the Independent Reviewer of the Food and Grocery Code.

For the first time the Report is also accompanied by an interactive dashboard that provides access to the survey results and a ranking of the performance of Code Signatories based on survey responses from their suppliers. This information is being made public to promote greater transparency and to foster greater competition in the sector.

The Independent Reviewer’s rankings are as follows:

1st place – ALDI
2nd place – Metcash
3rd Place – Coles
4th Place – Woolworths.

A summary of some of the findings of the Independent Reviewer is below and the full details can be found in the Annual Report and detailed results can be accessed via the interactive dashboard on the Independent Reviewer’s website.

  • 71% of suppliers reported no issues (increasing from 67% in 2021-22);
  • 84% of respondents felt that their retailer/wholesaler usually or always communicates clearly and promptly;
  • 86% consider their retailer usually or always deals in good faith;
  • 83% of suppliers consider their retailer/wholesaler always or usually takes prompt, constructive action to resolve issues raised;
  • 41% of respondents to Woolworths and Coles identified fear of damaging their commercial relationship as an impediment to raising issues, compared to 28% Metcash and 21% ALDI.

“While the survey results of the 2023 Report suggest the Code is working well and has helped to reduce the issues faced by suppliers it also highlights ongoing problems in the supermarket sector including: delays in payment, unauthorised deductions from remittances and impediments to raising issues with retailer buying teams due to fear of damaging their commercial relationship.”

The Government is committed to improving conduct in the supplier/retailer relations. “We have commenced the 2023-24 review of the Code provisions to ensure that they remain effective in fostering a vibrant and competitive food and grocery sector in Australia. Have your say and become involved in the public consultation process by visiting the Treasury website.”

Assistant Minister for Competition, Charities and Treasury Andrew Leigh says: “While these results suggest that the Food and Grocery Code is working well, they also highlight ongoing issues in the supermarket sector. Most Australians buy their groceries at the big supermarket chains and it’s important that those big supermarkets are doing the right thing by their suppliers.

“The release of these rankings is an important transparency measure that fosters greater competition within the sector. Holding big companies accountable helps encourage a race to the top.”

On background

The Annual Report and survey of suppliers are an important part of the Independent Reviewer’s role. The Annual Report sets out the Independent Reviewer’s activities for the reporting period and outlines key findings from the 2023 surveys of Code Signatories (ALDI, Coles, Metcash and Woolworths) and their suppliers.

The Code was introduced in 2015 to lift the standard of commercial conduct between the major supermarkets, wholesalers, and their suppliers. Woolworths, Coles, ALDI, and Metcash are signatories to the Code and are bound by it. A government appointed Independent Reviewer role was also established to review complaints to ensure that suppliers are afforded due process throughout the dispute resolution process.

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