European Parliament Investigation

An interesting media article I received over the past week highlighted that the European Parliament has signed a declaration on investigating and remedying the abuse of power by large supermarkets operating within the countries comprising the European Union (EU).

It goes on to state that the declaration asks the European Commission to investigate the impacts that the concentration of the EU supermarket sector is having on small business, suppliers, workers and consumers.

A factor raised as a reason behind the declaration was the stated observation that retailing in Europe was increasingly being dominated by a small number of supermarket chains which were “fast becoming gatekeepers controlling farmers and other suppliers only real access to consumers”.

This is an interesting position to come out of the EU, given that many consumer and grower organisations have held similar concerns regarding the situation that exists in Australia. This situation further highlights the misguided approach of the existing mandatory horticulture code of conduct which is continuing to impose a substantial regulatory burden and the associated compliance costs for just the wholesaling sector of the fresh produce industry.

Other sectors of the industry and indeed, the balance of the retail grocery industry, are not subject to the regulations.

It is a concern therefore that the Horticulture Code Committee, which has been given the task of progressing a review of the effectiveness of the code, may focus on band-aid solutions rather than tackling the fundamental flaws in the current regulations.

The committee's call for submissions from industry late last year resulted in only 15 being received which in itself, appears to highlight the general lack of interest with the Code.

The horticulture industry must have confidence that the committee is seeking to ensure an objective and impartial assessment of the merits or otherwise of the existing document.

Having said this, and given the highly politicised environment which led to the introduction of the Code, and the manner in which the coalition Government ignored the recommendations of the likes of the Centre for International Economics in regard to the cost and justification for a code, it would be appropriate for the new Federal Labor Government to give urgent priority to a much more comprehensive and far reaching review of the basis and justification for the Code, its contents and its application.

This review must go beyond the existing scope of both the current ACCC and Horticulture Code Committee reviews and must focus on achieving an industry endorsed solution which works to improve commercial practices within the industry.