Australia launches grocery code review amid concerns over effectiveness

Following New Zealand’s recent moves towards creating a local code of conduct for the highly concentrated grocery sector, Australia has now come under the spotlight regarding its own code.

One of the main red flags regarding its effectiveness has been the almost zero number of complaints handled by designated code arbitrators. These are individuals designated by each signatory retailer that a food brand/supplier can turn to with a written complaint if they do not deal directly with the retailer or choose not to go the direct route.

Australia’s four signatory retailers to this code are its four largest supermarket chains – Coles, Woolworths, ALDI and Metcash – and each have their own Code Arbiter, who is allowed to engage in ‘informal discussions’ with complainants.

The scheme was intended to ensure that brands and suppliers do not suffer any retaliation from retailers, but there appears to be almost no trust in this process.

According to data from the Australian Treasury, among the four major retailers, only two complaints were received in the fiscal year 2021 to 2022, and only two in the previous year, all directed at Coles.

As such, the Australian Treasury has launched a public consultation to review these dispute resolution provisions, hoping to gather feedback to implement useful changes to the code.

“Very few vendor complaints have been filed with code arbitrators about the [previous] two years,”the ministry said through formal documentation.

“There are several possible explanations for this, including that perhaps the Code is having a positive effect on the industry or that retailers are properly resolving disputes directly. [but it is also possible that] vendors are unaware of the role of code umpires or are concerned about raising complaints to code umpires [for various reasons] including fear of damaging the business relationship or fear of retaliation.