The Albanese Labor Government has made the Food and Grocery Code of Conduct mandatory, protecting farmers and everyday Australians at the supermarket checkout.
The mandatory code has now been signed by the Governor General and published on the Federal Register of Legislation. The new mandatory code will come into force on 1 April 2025, replacing the voluntary code.
This will protect suppliers and farmers and improve supermarket conduct with heavy penalties for breaches of the code.
The mandatory code will address imbalances in bargaining power between large grocery retailers or wholesalers and their suppliers and includes new obligations to protect suppliers from retribution and strengthened dispute resolution mechanisms for suppliers.
The Government is creating an anonymous supplier and whistle‑blower complaints pathway through the Australian Competition and Consumer Commission.
The making of the mandatory code follows extensive consultation with industry. In response to feedback, the Government has brought forward the next statutory review of the code from 2030 to 2027 to ensure the code remains effective and fit‑for‑purpose.
The Government is implementing all recommendations of Dr Craig Emerson’s independent review of the code. In addition to making the code mandatory, the Government has passed the Fairer for Families and Farmers Bill to increase the penalties for breaches of the code. Remarkably, the Liberal and ³Ô¹ÏÍøÕ¾ Parties voted against these increased penalties.
Following the passage of the Fairer for Families and Farmers Bill, the maximum penalty for the most harmful breaches of the mandatory code by large grocery retailers or wholesalers will be the greater of:
- $10 million
- 3 times the value of the benefit gained from the contravening conduct, or
- 10 per cent of turnover in the preceding 12 months.
These are serious penalties. They are the highest corporate penalties under any industry code under Part IVB of the Competition and Consumer Act 2010 and will ensure that treating suppliers poorly in breach of the code is not merely a cost of doing business.
The mandatory Food and Grocery Code is part of the Government’s broader competition policy agenda to get families and farmers a fair go, including:
- cracking down on shrinkflation by strengthening the Unit Pricing Code to make it easier for Australians to make accurate and timely price comparisons;
- working with the states and territories to reform planning and zoning regulations to boost competition and reduce land banking;
- ensuring the Australian Competition and Consumer Commission will be notified of every merger in the supermarket sector, in the biggest strengthening of Australia’s merger settings in half a century; and
- providing the Australian Competition and Consumer Commission with additional funding to crack down on misleading and deceptive pricing practices in the supermarket and retail sectors.
The mandatory code is available on the Federal Register of Legislation.
