ACCC allows supermarkets to work together to overcome supply issues - Inside FMCG

ACCC allows supermarkets to work together to overcome supply issues

The nation’s biggest supermarkets have been granted permission by the ACCC to work together to ensure the fair distribution of groceries given unprecedented demand by consumers in recent weeks.

Coles, Woolworths, Aldi and Metcash can now coordinate with each other when working with manufacturers, suppliers, and transport and logistics providers, but will not be allowed to agree on retail prices for products.

The ACCC’s interim authorisation allows supermarkets to temporarily side step competition rules, which exist to prevent market collusion, to ensure consumers have “reliable and fair access” to groceries during the COVID-19 pandemic.

“Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks, both in store and online, which has led to shortages of some products and disruption to delivery services,” ACCC chair Rod Sims said.

“This is essentially due to unnecessary panic buying, and the logistics challenge this presents, rather than an underlying supply problem.”

Sims noted that some individual supermarket chains have already taken steps to mitigate issues caused by panic buying and recognised that allowing businesses to work together is “appropriate and necessary at this time”.

A spokesperson for Coles praised the ACCC for acting quickly on the request from retailers in order to address the food and grocery supply issues.

“While Coles and other retailers have each undertaken a number of initiatives to address issues such as stockpiling behaviour, a co-ordinated response will enable us to quickly implement consistent and appropriate measures as required,” a Coles spokesperson said.

“Industry participants will also be able to work together with suppliers and logistics providers to ensure that we are making the best use of resources and allocating essential supplies fairly while prioritising those most in need.”

Woolworths Group CEO Brad Banducci said this collaboration between supermarkets is “in the national interest”.

“It’s in the national interest for retailers to be able to collaborate on issues such as the health and safety of team members and customers, and on ensuring Australia’s supply chains are robust and operating effectively.  This will ultimately mean more products, delivered safely to communities across Australia,” Banducci said.

“We’re pleased that the ACCC and the government are supportive of sensible collaboration between Coles, ALDI, Metcash and Woolworths in this challenging period for the Australian community.”

The ACCC granted the interim authorisation on Monday afternoon after receiving the application from the Department of Home Affairs’ Supermarket Taskforce last Friday.

Any grocery retailer can participate, and retailers, suppliers, manufacturers and transport groups can choose to opt out of any arrangements if they wish.

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