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Suppliers call on ACCC to investigate retailers

Image credit: Nadine Chemali
Image credit: Nadine Chemali

Suppliers have called on the Australian Competition and Consumer Commission (ACCC) to investigate whether retailers are complying with the Food and Grocery Code of Conduct, following a turbulent few weeks in which major brands were withheld from supermarket shelves.

In early April, some of Australia’s favourite pet food brands like Whiskas, Pedigree, My Dog and Dine as well as Uncle Toby’s cereals vanished from shelves around the country in what appeared to be an ongoing price war between supermarkets and suppliers.

The ACCC said in a statement to Inside FMCG that it “is aware of the issues and is assessing the matter”.

The ACCC’s code of conduct contains rules relating to grocery supply agreements, payments, termination of agreements, dispute resolution and a range of other matters. It is a voluntary code, under the Competition and Consumer Act, and therefore only applies to retailers or wholesalers that have elected to be bound by the Code, something that Woolworths, Coles, Aldi and About Life have done.

While the code requires both retailers and suppliers to act “in good faith”, there may be grounds for a retailer to delist a product that is withheld by a supplier or unobtainable for an extended period of time.

Industry sources told the AFR that this area is open to potential abuse as most suppliers do not have enough market data to argue their case.

The ACCC invites suppliers to report alleged breaches of the Act or Code and has also made submissions to a recent review of the Food and Grocery Code.

A spokesperson for Woolworths told Inside FMCG that its team members are trained to comply with all the requirements of the code of conduct.

“We treat our obligations under the Food and Grocery Code very seriously and train our teams to comply with its requirements in all our dealings with suppliers,” a spokesperson for Woolworths said in a statement to Inside FMCG.

“If a supplier has concerns with any aspect of our conduct, there are a range of channels available, including anonymous reporting lines, for those to be raised and properly investigated.”

“While we will always endeavour to limit increases to the cost of groceries for Australian families, we have reached agreements with many suppliers to pay many millions more for the products they supply to us in recent times.”

Aldi was the first major supermarket signatory to the code and a spokesperson told Inside FMCG that they pride themselves on strong supplier relationships.

“Our way of doing business with our suppliers has always been in line with the spirit and clauses of the Code. By prioritising sustainable growth over short term behaviour, our approach ensures that our business focuses on strong, long-term partnerships that drive value for both parties, whilst catering for the buying preferences of our customers,” the spokesperson for Aldi said.

“We support the code, the intent of the code and do not have difficulty complying. We recently showed our support through our submission to the independent review of the Food and Grocery Code of Conduct.”

Inside FMCG also contacted Coles for comment but did not receive a response ahead of publication.

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