The Australian federal government announced on Monday that large chain supermarkets could face fines amounting to billions of dollars if they fail to comply with the industry code of conduct. This move aims to address concerns about suppliers being unfairly pressured on pricing.
The federal government stated that supermarkets with an annual income exceeding 5 billion AUD (approximately 3.3 billion USD)—currently including Woolworths, Coles, Germany's ALDI, and wholesaler Metcash—will be forced to adhere to the previously voluntary code of conduct.
This measure follows a report released by former competition minister Craig Emerson, which indicated that the current code fails to address the imbalance in bargaining power between supermarkets and their suppliers, including farmers.
Supermarkets that violate the code will face fines of up to 10% of their annual revenue. These guidelines primarily cover dealings with suppliers. Woolworths reported Australian food sales of 48 billion AUD in 2023, Coles reported 37 billion AUD, and Metcash reported 10 billion AUD. ALDI did not disclose its earnings.
In a joint statement, Treasurer Jim Chalmers, Agriculture Minister Murray Watt, and Competition Minister Andrew Leigh said, "This is about securing fair treatment for families and farmers."
In another statement, the federal government said it would prioritize legislation to make this code mandatory.
This review is one of six investigations the government is conducting into the country's supermarket industry. Commentators have noted that Australia's supermarket sector is one of the most concentrated in the world. Woolworths and Coles together account for two-thirds of Australia's grocery sales.
