ACCC Reviews

The ACCC inquiry into retail grocery prices announced last week by Assistant Treasurer Chris Bowen, has been welcomed by many consumer groups and grower representative organisations.

This latest inquiry follows a number of earlier reviews including the 1999 Joint Parliamentary Select Committee Enquiry into the Retail Grocery Industry and the 2003 Buck Report. Both these early reviews made recommendations to the Government of the day on issues such as the potential for the misuse of market power by the retail chains and the introduction of a mandatory code of conduct to apply across the retail grocery industry including growers, manufacturers, wholesalers, retailers and exporters.

These recommendations were however, ignored by the Government, with the wholesaling sector of the fruit and vegetable industry ultimately being the only sector of the total grocery industry being subject to the application of a specific mandatory code.

We are all aware of the debate over the mandatory Horticulture Code and the political farce that has culminated in a largely unworkable code which has failed to focus the attention of the industry on the core issues of disclosure and building better commercial relationships throughout the supply chain.

The current attention being given by the media and grower representative organisations to the return price being paid to growers masks and confuses a number of the underlying issues being faced by growers. The significant issue, as investigated by the first enquiry in 1999, is the potential for misuse of market power. 

This latest review will also put the Horticulture Code under the spotlight, with the ACCC to assess the effectiveness of the Code and whether the inclusion of other major buyers such as retailers would improve its effectiveness.

This is a positive outcome with this review running parallel to a second review currently being conducted by the appointed Horticulture Code Committee. It is the view of both BML and Brismark that the existing code, while providing for the use of documented terms of trade and a dispute resolution framework, remains too prescriptive and inflexible for it to be effective or workable.

On this basis, in its recent submission to the Horticulture Code Committee, Brisbane Markets Limited has called for the application of the code to be suspended until the outcomes of these current reviews are finalised.

The ACCC review will provide a timely analysis of the retail grocery industry which will no doubt provide a basis for more detailed discussion and debate over the coming months.