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National Farmers' Federation

Draft food code aids, abets and perpetuates supermarket power imbalance

The NFF Horticulture Council has today confirmed it cannot support an updated Food and Grocery Code of Conduct that resembles the draft recently shared for comment.

Chair of the Council, Jolyon Burnett said while the industry had welcomed improvements proposed for the Code, including making it mandatory, increased penalties, and more accessible dispute resolution processes, the core concerns of the fresh produce industry remained ignored.

“Dr Emerson started his review of the Code in January and in our first submission to Dr Emerson, and at every opportunity since, the Council have said perishable horticultural products and their domestic retail and wholesale markets must be regulated in a way that is consistent and fit for purpose,” said Mr Burnett.

“Dr Emerson acknowledged fresh produce suppliers were uniquely vulnerable to supermarkets exercising their market power.

“But despite the time available and keen public interest, neither Dr Emerson or the Treasury appear to have been interested in understanding how fresh produce supply chains work and how best to protect vulnerable suppliers.

“Instead of delivering clarity and certainty in trading relationships, the draft Code requires supermarkets to take “due care” when telling suppliers how much produce they expect to buy and to be “reasonable” with produce standards and specifications.

“Anyone who has spent a minute in fresh produce will tell you it’ll only be supermarkets that benefit from these vague, subjective, ambiguous terms, that lack any precedents and come with no guidelines.

“Elsewhere, protections in the draft Code stopping supermarkets shifting risk and cost onto suppliers have been rendered redundant by allowing supermarkets to justify circumventing them by virtue of the gains they stand to make, and not benefits accruing to the supplier alone.

“It runs entirely counter to the intent of the Code that benefits accruing to supermarkets could be used to subvert important protections and justify arrangements that, based on impacts on suppliers alone, would be considered unfair and unreasonable.

“Fresh produce suppliers wonder who Dr Emerson and Treasury officials have been consulting. We had high expectations given the rhetoric about cracking down on poor trading practices from the Prime Minister himself.

“The Council would be grateful for the opportunity to walk the Treasurer through the very reasonable improvements we’ve recommended to the draft Code that would make it more useful for supermarkets and suppliers alike.”