Retail Giants agree on Food and Grocery Code

The Australian Food and Grocery Council (AFGC) and Australia’s two largest supermarket retailers, Coles and Woolworths, have reached an agreement on the terms of a food and grocery industry code of conduct.

Key aspects of the Code include:

  • Tough restriction on retrospective and unilateral variations to grocery supply agreements
  • Greater transparency on the basis of shelf allocation for branded and private label products
  • Recognition of the importance of intellectual property rights and confidentiality in driving innovation and investment in new products
  • A low cost and fast-track dispute resolution mechanism

The Food and Grocery Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers, which the AFGC said will provide “greater certainty and clarity” about dealings in the industry without adding complexity or cost in a fast moving consumer goods sector.

The agreement has produced a voluntary code between the two major retailers and the peak body but Small Business Minister Bruce Billson hopes other retailers and suppliers, such as farmers, will also sign on.

"It seeks to address the uneven balance of power in the relationship between supermarkets and their supply chains," he said.

Gary Dawson, the chief executive of the Australian Food and Grocery Council, said "It’s in everyone’s interest – consumers, suppliers and retailers – that suppliers get a fair go in the current market structure. A viable domestic food and grocery sector underpins investment, innovation and consumer choice."

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