The peak body for food and grocery manufacturing Australian Food & Grocery Council notes the report by the Senate’s select committee on supermarket pricing.
The Committee’s ‘Supermarket Prices: Final report’ highlighted the need to strengthen the Food and Grocery Code of Conduct through tougher penalties and the introduction of an independent arbiter. It also underlined “the reality and concern over fear of retribution faced by food and grocery manufacturers.” This chimes with the review of the Code by Craig Emerson which strengthens protections for suppliers.
AFGC CEO Tanya Barden says: “Clearly, the entire food and grocery supply chain – from retailers to suppliers and consumers – remains under pressure. However, we all need to share the costs as well as the benefits equitably without putting any one link in that chain under undue pressure.”
Regarding divestiture powers, the AFGC considers these are potentially premature at this stage given the commitments the government has made the strengthen the merger laws and Food and Grocery Code of Conduct.
Many of the issues raised in the recommendations of the Committee’s report are being looked at by the ACCC’s year-long inquiry. Pricing arrangements in the industry are complex making the ACCC well placed to take up these matters.
Food, beverage, and grocery manufacturers account for over 270,000 jobs, many of them in rural and regional Australia. The health of the industry and those jobs depends fair practices that generate sufficient profits to justify investment in manufacturing.
AFGC’s submission to the inquiry called for investment incentives that drive manufacturing capability and job creation through boosting the sector’s competitiveness, resilience, and agility.
“With regards to multinational companies, AFGC is disappointed that companies were given fewer than three business days’ notice to appear in front of the Committee. As the report notes, the companies have since forwarded their written submissions to the Committee and cooperated with the process. Their submissions are available on the public record.”