The competition watchdog is investigating concerns that Woolworths and Aldi “have not got off to a good start” under the new Grocery Code of Conduct.
The Code was set up to ensure retailers deal with their suppliers ‘in good faith’, after years of complaints from farmers and food manufacturers about unfair treatment.
The Australian Competition and Consumer Commission (ACCC) says some suppliers have complained about the way Woolworths and Aldi have gone about setting up new supplier agreements, which are required by the Code.
ACCC chairman Rod Sims said the Code of Conduct, “imposes a duty to deal with suppliers in good faith and we are concerned by reports we have received from suppliers that suggest that some retailers have not got off to a good start”.
“The ACCC has concerns as to the manner in which some retailers, in particular Woolworths and Aldi, are presenting new Grocery Supply Agreements (GSAs), which might give the impression that the supplier is not able to negotiate the terms of the GSA,” he added.
“The ACCC is also concerned about the low level of detail provided in some GSAs about the circumstances in which certain payments may arise.”
ABC Rural has contacted Woolworths and Aldi for comment.
Aldi was the first retailer to sign up to the Code, after it was launched by the Federal Government in March.
Woolworths, Coles and Sydney-based retailer, About Life, have also signed on.
The Code aims to prevent retailers from abusing their market power, and sets out a series of prohibited actions. Those include retailers requiring payment for wastage of product that occurs on the retailers’ premises.
Retailers and suppliers may opt out of provisions, but only, “if the opt outs are agreed, if the agreement sets out the circumstances in which the opt out applies and if the payment is reasonable in the circumstances, ” the ACCC says.
The Code is voluntary to sign up to, but binding on retailers that do.
The ACCC said it has written to each of the retailers, which have provided the watchdog with copies of their new supplier agreements as well as correspondence sent to suppliers when offering those new agreements.
The ACCC is responsible for enforcing compliance with the Grocery Code.