The inquiry into supermarket prices has called for stricter competition policies to protect consumers and suppliers, especially those in the vulnerable fruit and vegetable industry.
Mr Birrell highlighted the plight of suppliers who, fearing retaliation, testified anonymously about the challenges they faced, such as unenforceable contract terms and intense pricing pressures.
“The inquiry found the fruit and vegetable industry, in particular, was vulnerable to unenforceable contract terms and pricing pressures because most of their produce can’t be exported and is perishable, meaning they had a limited time frame in which to negotiate with supermarkets,” he said.
The committee has recommended creating divestiture powers specific to the supermarket sector where a supermarket has been found to have misused its market power or engaged in unconscionable conduct.
“Divestiture powers would act as a significant deterrent, with corporations risking the forced sale of assets if they abuse their market power,” Mr Birrell said.
Additionally, the committee proposed creating a Commission on Prices and Competition to oversee and scrutinise pricing practices across the supermarket supply chain — from the farm gate to the retail shelf.
This body would be expected to ensure fair trading practices and prevent unfair mark-ups harming producers and consumers.
Other recommendations include making the Food and Grocery Code of Conduct mandatory and incorporating the Dairy and Horticulture Codes of Conduct.
These changes would address the trading challenges associated with perishable goods and suppliers’ vulnerabilities.
Mr Birrell emphasised that many issues, such as unrealistic quality demands, limited negotiation windows and punitive measures from dispute resolutions, created an uneven playing field that disadvantaged farmers.
“While the price at the supermarket checkout was a significant part of the inquiry, many consumers would have been shocked that the higher prices they are paying are not benefiting producers,” Mr Birrell said.
“Some told the inquiry they had not had a price increase in 15 years.
“It is important that competition drives efficiency in the market, but the future sustainability of the fruit and vegetable sector is paramount.
“The Albanese Government needs to respond to the recommendations and step in to create a more level playing field.”
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