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Monday, 2 March 2015
Page: 1625

Grocery Prices


Dr STONE (Murray) (14:10): My question is to the Minister for Small Business. Will the minister update the House on the progress of the food and grocery code of conduct initiative? And what action is this government taking to ensure that smaller suppliers are not being taken advantage of by the big supermarkets?


Mr BILLSON (DunkleyMinister for Small Business) (14:10): I thank the member for Murray for her question and reiterate the point very eloquently made by the Prime Minister: we said we would do something about this, and we have. We have enacted the country's first food and grocery code of conduct. At the election we said we would work with industry to get this done, and that is exactly what has happened. For many years, even over the Labor years, we heard time and time again about the significant concern that was there in the food and grocery supply chains in relation to commercial dealings that they had with big retailers whereby small grocery suppliers frankly felt that they could not push their case and were getting pushed around and forced into situations against their own economic self-interest. We have seen the case studies and we have seen the legal action, where dominant retailers have engaged in conduct that crosses the line from hard bargaining into an area where those dealings are not fair, are not reasonable and are not showing respect for their supply chain.

This harms consumers, as it harms suppliers. It harms consumers because if a small supplier cannot be confident of the ground that they are operating under and can be subject to unilateral claims, then where is the incentive for them to invest? Where is the encouragement for product innovation? And that is what leads consumers to be disadvantaged. To its credit, though, the food and grocery industry has recognised a need for action in this area. They got together, they worked through the issues and they were up-front about each other's approach to commercial dealings, understanding that this government was insistent on progress being achieved on this front. And what have we done? We have delivered. As the Food and Grocery Council said today. 'This is a historic day'. It added:

We congratulate the Government for progressing the Code as an industry-led solution to problems impacting on suppliers and consumers.

Australian Dairy Farmers has praised the code, saying that it is 'a positive first step towards addressing the imbalance in market power between retailers and suppliers'. And ALDI Australia has welcomed the government's finalisation of the food and grocery code and announced that it will be signing up as a party to the code—great leadership from ALDI.

Ms Owens interjecting

The SPEAKER: The member for Parramatta is warned.

Mr BILLSON: The code seeks to ensure simple things: a written grocery supply agreement, an obligation to act in good faith, a dispute resolution mechanism. And, as the ACCC chair, Rod Sims, said today, no matter how much bargaining power a retailer holds, they must deal with their suppliers fairly.

So, this is a good outcome. Contrast that with what we got from Labor. In 2007, Labor promised it would protect small suppliers through codes and hold a national grocery pricing inquiry. Well, it should not come as any surprise to anybody: lots of Labor talk, no Labor action over six years. Instead, all we got was the Grocery Choice website. What happened with that? Even Labor realised that that was a dud. In contrast, we have got on with it, we have delivered, making sure that this is a good economy for big and small businesses. It is a good day. (Time expired)