In 2014, the Government introduced the Food and Grocery Code of Conduct (the code) to deal with the public concern that the commercial practices of supermarkets and wholesalers were negatively affecting their suppliers to the ultimate detriment of consumers.
The purpose of the code is to improve standards of business conduct in the food and grocery sector. It was developed in response to concerns raised in the public debate about the conduct of retailers (in particular, supermarkets) towards their suppliers, and arose out of an industry led response to these issues.
Following a period of extensive consultation, the Government decided that a voluntary prescribed industry code of conduct was the appropriate mechanism. However, the Government committed to review the code three years from its commencement to ensure it was working effectively including whether it was achieving its purpose as a voluntary code.
The following terms of reference restate the matters that must be considered as part of the review, as specified within the Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2015.
Terms of Reference
The review of the code will examine but not be limited to:
- the extent to which retailers and wholesalers have become bound by the code;
- levels of compliance with the code by retailers and wholesalers bound by the code;
- whether the purposes of the code are being met;
- the extent to which the code assists in addressing any imbalances in the allocation of risks between retailers, wholesalers and suppliers;
- whether there are any further measures that would improve the operation of the code with respect to the matters mentioned in paragraphs (c) and (d);
- the interactions between the code and the Horticulture Code of Conduct;
- how the code compares with overseas regulation of commercial relations between retailers, wholesalers and suppliers;
- whether the code should be mandatory or voluntary;
- whether the code should include civil penalty provisions;
- whether retailers, wholesalers and suppliers should be bound by the code and, if so, to what extent;
- whether the code should be repealed or amended and, if so, the timing of any such repeal or amendment; and
- the products that should be covered by the code.
The reviewer is required to prepare a report suitable for public release by the Assistant Minister to the Treasurer, the Hon Michael Sukkar MP, within six months.
The report is to include findings and recommendations based on evidence presented to the reviewer and these terms of reference. The reviewer is required to undertake appropriate consultation including with industry and the Australian Competition and Consumer Commission (ACCC) when gathering evidence to support the findings and recommendations of the final report.