ACCC report due in July 

The Australian Competition and Consumer Commission's (ACCC) review of the retail grocery industry has now received some 190 submissions and has conducted hearings throughout Australia.

Its report to the Federal Government is due by the end of July, and with the analysis of the submissions and of the evidence given now at an advanced stage, speculation is now focusing on the terms of reference and likely outcomes.

Media statements over the past two months have highlighted the lack of submissions to the ACCC by some of the major food manufacturers within Australia, the fact that grocery price rises have been well ahead of CPI increases and competing interests which exist, with ACCC Chairman, Graeme Samuel, highlighting the contradictory nature of many of the submissions received.

The Federal Government has already moved on two fronts which may pre-empt some of the recommendations of the review.

It has moved to make it easier for foreign retailers to own stores in Australia while also foreshadowing changes to the Trade Practices Act aimed at providing greater protection for small business against predatory pricing.

Nothing has been foreshadowed as yet in relation to the ACCC's investigation into the effectiveness of the Horticulture Code of Conduct and whether the inclusion of the major retailers (buyers) would improve its effectiveness.

While only a small percentage of submissions have referred to the code, given that it only relates to the horticulture industry, there is an expectation that the ACCC will offer feedback regarding the general recognition that the current code is dysfunctional, and in relation to the broader commercial context, what amendments and/or level of regulation can be justified as being appropriate for the horticulture industry.

Given the competing supply chains which exist within the fresh produce industry, there is a need to ensure that businesses within those supply chains have the opportunity to drive out unnecessary costs and the ability to adopt commercial practices that are efficient and effective while also ensuring greater levels of contractual clarity and transparency.