FARMERS have cautiously welcomed a voluntary code of conduct for suppliers' dealings with the supermarket duopoly, announced in Canberra on Monday.
After several years of talks, and allegations of supermarkets bullying suppliers, Small Business Minister Bruce Billson announced the code would be put in place.
He said the code would help consumers and suppliers by ensuring "fair and healthy competition" in the grocery sector. But the two major supermarkets are yet to sign up. Australian Competition and Consumer Commission chairman Rod Sims said he expected both retailers, Coles and Woolworths, would sign up soon.
Mr Sims said the voluntary code prohibited some types of unfair conduct by supermarkets and provided a clearer framework for supermarkets' dealings with farmers and grocery suppliers.
He said suppliers would have extra protections under the new code and once the retailers and wholesalers signed up, the commission would be able to enforce it. The code includes court action for breaches.
"There can be a significant imbalance in bargaining power between suppliers and large grocery retailers and wholesalers," Mr Sims said.
"The code seeks to limit some of the conduct that was brought to the ACCC's attention during our supermarket suppliers' investigation," Mr Sims said.
While the National Farmers' Federation welcomed the code, chief executive Simon Talbot reiterated the primary producers' calls for a mandatory code to be put in place.
He said it was a "constructive step", but the "proof of this pudding will be in the eating" and the NFF would monitor how it worked in practice.
"The key issue for farmers is ensuring that there is transparency and equity right across the agricultural supply chain from saleyards to supermarkets," Mr Talbot said.
"Clearly, if a voluntary prescribed code is going to work, it needs to have support from across the retail sector, and we hope that support will be forthcoming."
The code will also be reviewed in three years to check it is fulfilling the aims.
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