Codifying Supermarket-Supplier Relations

Codifying supermarket-supplier relations: A report on Australia's Food and Grocery Code of Conduct*

Caron Beaton-Wells and Jo Paul-Taylor.

*This report is accurate and reflects developments as at 1 September 2017

Download the complete report here.

Table of Contents



Executive summary


1.     Introduction


2.     About this report


I.      Research aim, questions and time frame

II.     Research method

III.    UK comparisons

IV.    Structure of this report


3.     About the Supermarket Power project


4.     Warning signs


I.      The ACCC Grocery Inquiry

II.     Intensifying competition and external influences


(a)        The Wesfarmers turnaround

(b)        The Aldi incursion

(c)        Vertical reverberations

(d)        Macro aggravations

(e)        Cultural shifts and UK influences

(f)         Political rumblings


5.     Immediate catalysts


I.      A changing industry – the dairy sector consolidates

II.     Dairy sector concerns become political concerns

III.    One dollar milk hits the shelves, heralding yet another government inquiry

IV.    The political dilemma – deny farmers or consumers?

V.    The conundrum – but what do consumers truly want?

VI.    Socio-cultural undertones and contradictions


6.     Significant actors


I.      The watchdog, watching and being watched: the ACCC


(a)        Yet more public inquiries, yet more pressure on the ACCC

(b)        A new leader at the helm

(c)        The enforcer takes aim

(d)        Harper gives grocery a free pass but goes not so easy on the ACCC


II.     A small business man: the Small Business Minister


(a)        Competition reform for small business – roots, branches and all

(b)        Small business budget measures

(c)        Effecting an effects test


III.    A monitor and mediator: the AFGC


7.     At the negotiating table


I.      The (not so) round Roundtable


(a)        Detailed but still flexible

(b)        Prescribed but voluntary


II.     Holding out: the NFF

III.    Outside the tent: Aldi and Costco

IV.    A bet both ways: Metcash, MGA and the IGAs

V.    Behind the scenes: Billson

VI.    Making it official: Treasury


(a)        Codification as a way of doing business, both for industry and government

(b)        Purposes and provisions

(c)        Getting to ‘yes’


a)     What’s the problem?

b)    Why should government get involved?

c)     So what are the options?


i.      Option 1: do nothing

ii.     Option 2: do what the Roundtable proposes


i)      Flexibility

ii)    Good faith

iii)    Dispute resolution

iv)    Penalties


iii.     Option 3: do what the farmers want


8.     In practice to date


I.      Awareness and understanding

II.     Using the Code

III.    Exclusion of price

IV.    Counteractions


(a)        Code confusion

(b)        Cultural change and competitive pressure

(c)        Continued political pressure?


V.    Reinforcements


9.     Up for review and looking ahead


I.      Trust and cooperation

II.     Transparency and certainty

III.    Effective, fair and equitable dispute resolution

IV.    Good faith


Appendix A: List of interviewees


Appendix B: Template interview questionnaire