Watchdog weighs in on grocery code

 

Groceries, shopping, bagIn welcoming industry efforts to develop a code of conduct to address unfair practices in the grocery sector, the Australian Competition and Consumer Commission (ACCC) has called for issues around enforceability and coverage to be addressed before a conclusion is reached.

ACCC chairman, Rod Sims, said an industry code of conduct that provides clear rights and legally enforceable norms of conduct would be of “considerable assistance” to food and grocery industry participants. 

“However, many of the protections of the proposed Code are qualified and retailers and suppliers are able to agree to ‘contract out’ of Code provisions,” Sims said at the Australian Food and Grocery Council’s Industry Leaders Forum in Canberra.

“This raises an issue of whether the Code will address the problems which industry has identified if norms of conduct in the Code are able to be traded away, rather than always enforceable.”

Sims also backed comments made by the chairman of the Productivity Commission that Australia should stick with its successful strategy of favouring the many over the few by focusing on removing barriers to competition generally, rather than pursuing policies that favour particular sectors.

“We strongly agree with the review panel that there is a need to reinvigorate Australia’s competition policy, and ensure that it evolves.”

 Sims welcomed the Harper Competition Review Draft Report and discussed proposed areas of microeconomic reform where the food and grocery sector stands to benefit. He also agreed with the review panel’s consideration of Australia’s competition laws.

“In doing so, they have clearly had regard to established international approaches to setting the appropriate boundaries of such laws.  Australia’s competition laws are behind international best practice in important respects.”

Sims broadly welcomed the panel’s recommendation on “concerted practices”, the misuse of market power, and in relation to merger assessment.

In reporting on the ACCC’s recent compliance and enforcement activities,  Sims listed outcomes in area of credence claims including beer, pork, honey, and free-range eggs.

“When making promotional claims about food or grocery products, the ‘who’, ‘what’, ‘where’, and ‘how’ must be accurate.”

Sims also provided an update on the carbon tax repeal, product safety, and competition cases.

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