Federal Member for Nicholls, Sam Birrell MP, has welcomed the findings of the Senate Select Committee on supermarket prices which has recommended an overhaul of the supermarket sector and a strengthening of competition policy to protect consumers and suppliers.

“Many of the suppliers, including farmers, that appeared before the committee did so anonymously for fear of retribution for trying to negotiate a level playing field,” Mr Birrell said.

“The inquiry found the fruit and vegetable industry in particular was vulnerable to unenforceable contract terms and pricing pressures because most of their produce can’t be exported, and is perishable, meaning they had a limited timeframe in which to negotiate with supermarkets.”

The committee recommends the creation of divestiture powers specific to the supermarket sector, where a supermarket has been found to have misused their market power or engaged in
unconscionable conduct.

“Divestiture powers would act as a significant deterrent, with corporations risking the forced sale of assets if they abuse their market power,” Mr Birrell said.

The committee also recommends the establishment of a Commission on Prices and Competition which would monitor and investigate supermarket prices and price-setting practices, including prices along the supply chain (including the farmgate, wholesale and retail price), mark-ups and profits;

Competition would be further strengthened by giving the Australian Competition and Consumer Commission (ACCC) the authority to investigate and prosecute unfair trading practices.

The Food and Grocery Code of Conduct would be made compulsory, and the Dairy Code of
Conduct and the Horticulture Code of Conduct would be adopted as schedules.

“The recommendation to create provisions specifically for the trading of fresh produce, reflecting the perishability of the product and the particular vulnerability of suppliers would be a welcome addition,” Mr Birrell said.

“The committee was told that the negotiations between supermarkets and farmers is uneven due to a range of issues such as time limited negotiations, lack of alternative markets, unrealistic quality expectations, forced involvement in supermarkets specials; and retribution resulting from the arbitration and complaints process.”

“While the price at the supermarket checkout was a significant part of the inquiry, many
consumers would have been shocked that the higher prices they are paying are not benefiting
producers, some told the inquiry they had not had a price increase in 15 years.”

“It is important that competition drives efficiency in the market but the future sustainability of the fruit and vegetable sector is paramount.”

“The Albanese government needs to respond to the recommendations, and step in to create a
more level playing field,” Mr Birrell said.