Australia has introduced a bill that could impose hefty fines on large supermarket chains failing to comply with a new industry code of conduct.
The Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Bill 2024 aims to prevent suppliers from being badly treated, by imposing fines on supermarkets that breach the voluntary Food and Grocery Code of Conduct.
The bill proposes that the maximum fines will be “the greater of” A$10m, “three times the value of the benefit gained from the contravening conduct”, or 10% of turnover booked in the previous year.
According to Australia’s Albanese Government, these are the “highest corporate penalties under any industry code.”
Infringement notice penalties for alleged breaches of the code will also increase.
As part of the bill, if the Australian Competition and Consumer Commission (ACCC) has “reasonable grounds”, it can issue infringement notices.
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By GlobalData
A government-commissioned report in April highlighted that enforcing obligatory rules, is “essential” to deal with the “heavy imbalance in market power” between Australia’s top grocers – Woolworths, Coles, Metcash and Aldi – and their suppliers.
Regulations for a new mandatory Food and Grocery Code of Conduct will be established this year, with enforcement beginning on 1 April 2025.
This latest initiative is part of the government’s broader strategy to promote fairness and equitable opportunities for families and farmers.
The bill includes provision that the ACCC will be notified of every merger in the supermarket sector.
To bolster enforcement, the ACCC will receive an additional A$30m in funding.
Australia’s Minister for Agriculture, Fisheries and Forestry Julie Collins said: “This is about getting a fair go for families and a fair go for farmers. The Albanese Labor Government knows how vital our agriculture sector is to Australia, and the Australian economy.
“Our farmers produce exceptional, highquality food and deserve to be on a level playing field with supermarkets.”
