The Australian Food and Grocery Council (AFGC) has asked food and beverage suppliers what they really think of the Food and Grocery Code of Conduct one year after its introduction.
The AFGC surveyed suppliers, asking them to rate the major supermarket chains on their compliance with the self-regulatory industry Code, and said it found “plenty of room for improvement”.
Asked to rate how the major chains are complying with their Code obligations, the supplier survey found 5% rated Coles either “Consistently Well” or “Mostly” compliant with the Code; 2% rated Woolworths “Consistently Well” or “Mostly” compliant with the Code; and 1% rated Aldi either “Consistently Well” or “Mostly” compliant with the Code.
Continuing Code-related issues being raised by suppliers included criteria for range reviews and delisting of products; requests to suppliers for payments to make up shortfalls in retailer profits; payment terms; and progress on new grocery supply agreements.
On the up-side, the AFGC said the survey of its member companies found high levels of knowledge and understanding of the Code, reflecting the high take-up of code training provided by the AFGC.
“It’s clear that suppliers appreciate the significance of the Code which aims to improve trading relationships by requiring more certainty and transparency in retailer-supplier trading relations,” said AFGC CEO Gary Dawson.
Dawson noted that Woolworths, Coles and Aldi had all voluntarily signed up to the Code, and that the past year had been a transition year in which they had been required to make their trading terms Code compliant.
“Given this has been a transition year as both suppliers and retailers have come up to speed with the Code and worked it into their business practices, the results show that there is still a way to go in this adjustment,” Dawson said.
“The survey results have been provided to the retailers and we have had constructive follow up discussions on the issues raised and ways of improving code compliance including training of staff, clarity and consistency in new Code-compliant supplier terms, and practices that are still causing concern.
Dawson said the ACCC, which has oversight of the Code as a regulation under the Competition and Consumer Act, had also been briefed on the survey results.
“We are encouraged by the way in which the major retailers that have signed the Code and responded to issues raised during its implementation. Key to this has been constructively engaging with suppliers and the AFGC to improve communication on the operation of the Code,” he said.
