A Voluntary Code of Practice for Supermarkets?

You might have read or heard about The Australian Food and Grocery Council A Voluntary Code of Practice for Supermarkets. So why the kerfuffle?

Well, it was instigated due to investigations by Australian Competition and Consumer Commission (ACCC) into the manipulative power of supermarkets and have stated that if proves ineffective then they will push for mandatory regulation.

“A Voluntary Code of Practice for Supermarkets? The Code seeks to regulate supply terms and practices between major retailers and grocery suppliers. The Code is intended to lead to greater transparency and certainty for grocery suppliers in relation to supply terms and to provide an improved dispute resolution process to resolve disputes.”

Is the term ‘voluntary code of practice’ as oxymoronic as baggy tights, post-Apocalyptic, or Microsoft English?

The short answer is: self-regulation has a spotted history and is dependent on many things including workplace culture.  Just think of media ethics and self-regulation in radio.  There are a number of fiasco’s that come to mind including Karl Sandilands’ gaffs, or about John Laws coming clean about what sponsorship means for his public pronouncements.

At the moment consumers and suppliers are being dictated to by the duopoly that is Coles and Woolworths.  At least half the fresh food is Australia is supplied by these supermarkets and they’ve have 80% of the grocery market.

For the consumer this means we pay higher prices than the UK for example where four large supermarkets have between them 65% of the grocery market.

For suppliers we hope some things might improve. To date the milk wars have damaged our dairy industry.

At the Country Valley Dairy

At the Country Valley Dairy

The most successful dairy farmers are those who supply  a niche market and are able to process their own milk.  Harvest Hub’s Country Valley is an example of this.

Strange though as there is already a Produce and Grocery Industry Code of Conduct and both supermarkets are on the committee but no change forthcoming on this committee. Why another code? Is it a PR stunt?

As Matt Levey posted on Choice site “Hands up if you want cheap milk? Actually, let’s try rephrasing that – hands up if you want to rip off farmers?”

On a large scale the duopoly supermarkets have been able to issue ultimatums to suppliers and growers.  ABC news reported Simplot, the vegetable processing company, for example, has been put on notice by the supermarkets to match significantly reduced prices of China and New Zealand.

In more recent reporting Simplot is all in favor of a fairer system that might arise out of a voluntary code of practice. The Supermarkets can choose to or not to do anything with the code.

Like Nick Xenophon, the independent senator  the code is a good move but we’re worried, as many consumers, growers and suppliers are that it lacks bite.  There are no financial penalties for breaching the code.

The supermarket will voluntarily say that they will not change contracts midstream. How can you do that anyway? Why do they need a voluntary code of practice for that when we would have thought that it shouldn’t be happening anyway? And …not retrospectively change terms of the contract?

Were you also aware that the suppliers were charged for anything stolen from the shelves? An archaic presumption?

Simply removing some outrageous practices, we believe, does not make a Voluntary Code of practice reasonable.

Many believe the hype of what they see and hear on this Code of Practice but don’t question it? Or don’t fully understand the depth of the meaning of the Voluntary Code. The real issue and what is worrying is that it further reduces diversity and that is bad news. Suppliers are being turned into Home Brand suppliers and packers, losing their own branding and so it further seems to be replicating the Wall Mart effect.