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Transcript of doorstop, Parliament House

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TRANSCRIPT THE HON BRUCE BILLSON MP Minister for Small Business Federal Member for Dunkley ____________________________________________________

Media Contact: Kane Silom 0458 550 506


Parliament House, Canberra

Monday, 18 November 2013 BBTS/009


Subjects: Supermarket Industry Code of Conduct

Bruce Billson: You would have heard today that Woolworths, Coles and the Australian Food and Grocery Council have collaboratively developed a supermarket industry code. This is a historic step, a very significant step. We’re back on track now to see an important part of our economy establish mutually respectful collaborative relationships that are good for retailers, good for the suppliers and good for consumers.

It’s been sometime since this discussion commenced and what we were concerned about under the previous Government is they injected themselves into that industry led work, basically got it off the rails and the parties retreated to their corners.

The coalition’s encouragement under the Abbot Government is to get back together, industry knows its industry best, and to put in place a code that sets a framework for good relations between suppliers and the major supermarkets. Essentially it goes to the imbalance in market power. Our supermarkets in Australia are very large. Coles and Woolworths represent an enormous proportion of the fast moving consumer goods market and suppliers are very dependent on them for their business and their longevity. That’s a balance that can be quite unfair and unreasonable and maybe subject to exploitation where the major supermarkets aren’t using their market power responsibly.

This code is a step in the right direction to recognise that the conduct of the big supermarkets is good for the economy, good for the suppliers and good for consumers and we welcome that development today.

Journalist: But it’s only a voluntary code isn’t it?

Bruce Billson: Well yes, yes it is a voluntary code at this stage. That’s what has been agreed upon between the major players but there are further action steps that will now follow. We will put this code through a regulatory impact statement. Other retailers, other supermarkets that aren’t as large as Coles and Woolworths will be able to consider the impact of the code on their operations. Suppliers need not individually consider about signing up. They know they can get involvement through the participation of the big supermarkets. But through the regulatory impact statement we can have a good look at the code that’s been developed collaboratively, see if it’s effective, see if it has the tools and teeth that’s needed to support good ongoing relationships between the big supermarkets and the suppliers. Through that feedback we will see whether further action steps are required.

Journalist: And what if they don’t abide by the code of conduct?

Bruce Billson: Well it would be pretty vivid and clear if the major supermarket players either don’t participate or don’t participate in the spirit of the code. If that’s the case, we’ve made it clear that the Government will act. We will ensure that there are proper working and commercial relationships that are fair and mutually respectful and offer an opportunity for efficient businesses big and small to prosper and succeed in this country.

So if there is non-compliance, if it appears the code is ineffective then we will take further steps to make sure these commercial relationships, where there are quite significant imbalances in market power are properly managed and guided through an effective code.

Journalist: Will you set benchmarks or a period for review? How will that work?

Bruce Billson: Our first step is to receive the code. We will do that today and we will discuss it with the stakeholders that have collaboratively developed it. The next step will be to put it out to a regulatory impact statement. That way other stakeholders can have their look at the code, they can evaluate whether they feel it’s effective. We can take that information on board through the regulatory impact statement and move forward from there.

Journalist: But it appears that the code could have gone further on private brands. Why hasn’t this agreement sought further restrictions given the pressures it’s putting on regular producers.

Bruce Billson: Yeah in my discussions with the parties both would have liked the code to have gone in additional directions and further steps in particular areas. The area of private brands, there’s been some negotiation undertaken there. The Food and Grocery Council have gotten to the point where their suppliers feel it is adequate what’s in the code but again, let’s look and see what happens with the code and the feedback we get.

Secondly, there are investigations underway at the moment that the ACCC is pursing where there are allegations of unconscionable conduct in the relationships between the supermarkets and some of their suppliers. The code compliments those legislatively based actions. And then we’ve got a further action step which is the root and branch review of our competition laws to make sure the tool kit is fit for purpose. So no single measure will be the answer. Combined, we think we will get this right and make sure this important part of our economy has good commercial relations that are in everybody’s interest.

Journalist: And just on that legal action is there a timeframe that has been put on that starting in court?

Bruce Billson: Yeah well the investigations are underway, they’ve been extensive and the ACCC commissioner Rod Simms has advised both the Parliament and in his public statements the investigations should conclude around the end of the year. Early in the New Year we will be looking to see whether there’s a basis for further legal action and the potential for prosecution. So that work is underway, it’s well advanced and we should know more early in the New Year. Thank you very much.