The ACCC today released its final report into its Supermarket Inquiry, detailing the ACCC’s recommendations to the government.
In the report, the ACCC has highlighted that the supermarkets:
- are the most profitable in the world
- increased their margins over the last five years
- received significant funding from growers for promotions and rebates.
Critically, the ACCC concluded that Coles and Woolworths have monopsony power in acquiring fresh produce. For years, growers have known this power, but have been unable to speak out due to concerns over commercial retribution. Some growers have not received price increases for 15 years, yet the supermarkets continue to deny any misconduct, saying the market is determined by supply and demand.
However, the standards imposed on growers potentially contradict the retailers’ own definitions of ethical sourcing, as suppliers are subject to exploitive behaviours, opaque financial deductions, inconsistent payment structures and inadequate remediation processes.
Key findings of the report regarding the treatment of suppliers also highlighted that fresh produce growers do not have the information or certainty required for making efficient investment decisions, and also that the suppliers’ dependence on Coles and Woolworths means that they’re the ones carrying both the extra cost and risk.
Australian growers provide 98 per cent of Australia’s fresh fruit and vegetables and underpins our food security. The ACCC said the findings of the report have highlighted the ‘significant long-term consequences’ on the sustainability of Australia’s fresh produce sector. In short, the supermarkets’ behaviours are threatening the viability of the sector, which should be alarming to the government.
Through APAL’s advocacy work on competition policy, in collaboration with 21 industry associations across the horticulture sector through the NFF Hort Council, APAL will continue to push for reforms in the perishable goods sector.
While the Supermarkets Inquiry initially focused on the impact of supermarket misconduct on consumers, efforts of the Hort Council and other ag sectors, helped shift attention toward the treatment of suppliers, particularly farmers. As a result, the majority of the report’s recommendations now reflect these concerns.
The final report outlines 20 recommendations, including increased transparency in retailer–supplier relationships, improved forecasting, transparency of weekly tendering and rebates processes, and enhancements to the Food and Grocery Code.
Jeremy Griffith, Head of Industry, Advocacy and Government Relations at APAL, said the horticulture sector fully supports the report’s recommendations.
“Supermarkets can no longer ignore their own misconduct; they need to finally acknowledge their behaviour, accept responsibility, and do the right thing by Australian growers,” said Jeremy.
“Months of Senate inquiries, hearings, and mounting media pressure have forced this issue into the spotlight, exposing the way suppliers, especially fresh fruit and vegetable growers, are being exploited.
“Over the course of the Senate inquiries, we’ve seen months of hearings and interviews, and the mounting media pressure has helped to shift the focus of this report to shine a light on the treatment of suppliers, particularly fresh fruit and vegetable growers.
“No sector is more vulnerable to retailer power than perishable goods suppliers. The nature of fresh produce means growers are left with little bargaining power, and are the ones baring all the risk and cost. It’s time for a reset, one where suppliers are not just treated fairly, but actively protected from the supermarket duopoly that dominates this country.
“Frankly, supermarkets should be ashamed of how they are treating the very sector that underpins Australia’s food security. APAL will continue working through the NFF Hort Council, lobbying the government to ensure these recommendations aren’t just noted, they are enforced.”
The ACCC has produced a Supermarkets Inquiry fact sheet which includes a summary of the key findings.
The full report (441 pages) can also be downloaded from the ACCC website via the link below.
