Australia: Australia is planning to levy significant fines on supermarket chains that misuse their bargaining power with suppliers.
Supermarket chains with yearly sales of more than $5 billion Australian dollars ($3.3 billion) will have to abide by a voluntary industry code of conduct, per government regulations unveiled on Monday.
The adjustments will affect Woolworths, Coles, Aldi, and Metcash, who collectively account for over 80 percent of the market. If their revenues increase, they may also affect stores like Costco.
Retailers who violate the code may face fines of up to 10 percent of their yearly sales, potentially amounting to billions of dollars. The Australian Competition and Consumer Commission will have an anonymous supplier and whistleblower complaints channel, according to the government.
The old rule did not address the “imbalance of bargaining power” between supermarkets and their suppliers, according to a report written by former competition minister Craig Emerson.
A “credible threat of effective enforcement and not be undermined by the threat of signatories walking away from their commitments” was necessary for an effective code, according to Emerson’s analysis, which stated that suppliers feared punishment from supermarkets if they complained. One of the world’s most concentrated food marketplaces is found in Australia. The two biggest players, Woolworths and Coles, together make up over two thirds of all sales.
A typical basket of groceries showed that the price difference between the two chains was less than one dollar, according to research released last week by the consumer advocacy group Choice.
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