Australia to make supermarket industry code mandatory, breaches may result in huge fines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 24 2024
0mins
Source: reuters
- Government Action on Supermarket Chains: Australia plans to impose hefty fines on major supermarket chains like Woolworths, Coles, ALDI, and Metcash if they do not comply with an industry code of conduct to address concerns of unfair pricing practices towards suppliers.
- Code of Conduct Enforcement: Grocers with over A$5 billion in annual revenue will be required to follow the code of conduct, which was previously voluntary, with potential fines of up to 10% of their annual turnover for breaches.
- Review Findings: A report highlighted that the current code fails to address the power imbalance between supermarkets and suppliers, prompting the government to make the code mandatory to ensure fair treatment for families and farmers.
- Industry Impact: The move aims to create a fairer environment for both consumers and suppliers in the grocery sector, which is highly concentrated with Woolworths and Coles dominating two-thirds of the market share.
- Support and Response: While Woolworths and Coles are considering the recommendations, ALDI supports making the code mandatory, and the National Farmers Federation believes these changes will empower suppliers to address market power misuse.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
