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Farmers call for a mandatory code for supermarkets

20 March 2013

The National Farmers’ Federation (NFF) has renewed calls for the introduction of a mandatory code of conduct for supermarkets, aimed at preventing a misuse of market power.

NFF President Jock Laurie said the NFF had worked with the major retailers and the Australian Food and Grocery Council (AFGC) in good faith to develop a voluntary code, but had lost confidence that it could go far enough in protecting farmers’ interests.

“Australia has an extremely concentrated supermarket retail sector, which risks an abuse of power by the supermarkets over their suppliers. The primary purpose of a code, either voluntary or mandatory, is to ensure the retailers do not misuse their market power,” Mr Laurie said.

“As such, our position has always been to support a mandatory code and longer-term changes to competition and consumer law, but to first see if the same outcomes can be achieved on a voluntary basis, and we have been working towards this with both retailers and the AFGC.

“After some months of discussion, we lack confidence that the voluntary code can deliver the strong outcomes that farmers expect – which is why we are calling on the Federal Government to work with us to deliver a sensible mandatory code.

“This means the Government immediately commencing a process that clearly identifies the issues throughout the sector, and finds adequate ways to address them.

“From our initial viewpoint, any mandatory code could include measures to safeguard against a misuse of power between all the major retailers and suppliers; address concerns around contract negotiations between farmers and retailers; and provide an avenue for dispute resolution, including a confidential complaint process and an independent dispute resolution mechanism through an ombudsman or commissioner.

“And it must be done in a way that does not add unnecessary costs into the agricultural supply chain. Farmers are price takers, so it is essential that any additional costs are not passed on to farmers.

“Importantly, we will only support a mandatory code that has real teeth; that is able to identify areas of concern to farmers and address these. This would include appropriate penalties.

“We also call on the Government to make changes to the Competition and Consumer Act to ensure a more balanced supply-chain approach in the long-term – ensuring that the rights of farmers are balanced more equally with those of consumers and retailers.

“At the moment, farmers are left exposed, which is why our members have strongly called for Government action,” Mr Laurie said.

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