Changes to the Competition and Consumer Act, including the power to divest supermarkets if found to have misused their market power, are key recommendations from the Senate Select Committee on Supermarket Prices. But Labor and Coalition senators delivered dissenting reports.
Amendments should also be made to the Act to prohibit price gouging and a Commission on Prices and Competition be established. The commission would examine prices and price setting practices across a range of industries and have authority to:
- 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;
- conduct market studies to review restrictions on competition in the supermarket sector;
- require supermarkets to publish historical pricing data that is transparent and accessible to both suppliers and consumers;
- access any data and information required to undertake its work, including supermarket pricing, mark-ups and profits data and price setting policies (both historical and current);
- make referrals to the Australian Competition and Consumer Commission for enforcement; and
- publish reports as required and at least on an annual basis.
The Food and Grocery Code should be made mandatory as soon as possible – by 30 September – and must include the Dairy Code of Conduct and the Horticulture Code of Conduct as schedules, the ctee said. The code should:
- be fully mandatory for retailers with enforceable rules;
- be enforceable with substantial penalties for breaches;
- include mandatory minimum standards that cannot be 'opted out' of;
- be overseen by Code arbiters who are fully independent of supermarkets, who should proactively conduct random audits so suppliers have anonymity in the process;
- create provisions specifically for the trading of fresh produce, reflecting the perishability of the product and the particular vulnerability of suppliers;
- create a portal for suppliers to lodge issues, and once a threshold is met and a consistent theme is identified, the ACCC can investigate the issue;
- investigate implementing measures under the Code that provide suppliers with improved information symmetry, which should include creating a price register for farmers to assist them in understanding market prices across primary industries; and
- a public consultation period to implement all of the above.
It also wants the code to take in other large retailers that stock food or grocery products.
Recommendation 11 said the Department of Climate Change, Energy, the Environment and Water needed to update the 2017 National Food Waste Strategy to include a best-practice, nation-wide approach to addressing food waste in the supermarket chain. The updated strategy should consider:
- reform of the use-by and best-before labels and their role in food wastage and consumer confusion;
- whether unrealistic cosmetic standards are adversely affecting farmers and the quantity of food waste across the country; and
- a requirement for supermarkets to publish regular data on food waste volumes, including food rejected for cosmetic reasons and food donated to foodbanks and similar charities.
The committee also recommended the Senate refer to the Economics References Committee the role of multinational food manufacturers in the supermarket industry in Australia, with particular reference to:
- the bargaining power of multinational food companies when engaging with Australian supermarkets;
- the process of multinational food companies in negotiating price changes with Australian supermarkets and retailers;
- the role of the multinational food companies in price setting and how this impacts on food prices;
- the price of company products in other jurisdictions and how these compare to Australia; and
- any related matters.
And
- the role of Australia's 'big box' retailers in price setting, with particular reference to:
- the market behaviours of such retailers, including price negotiation practices and engagement with suppliers;
- acquisition and use of land; and
- any other related matters.
