List of recommendations

Recommendation 1

9.24The committee recommends the Australian Government amend the Competition and Consumer Act 2010 to create divestiture powers specific to the supermarket sector, where a supermarket has been found to have misused their market power under section 46 of the Act, or engaged in unconscionable conduct.

Recommendation 2

9.30The committee recommends that the Australian Government progress legislative amendments to section 46 of the Competition and Consumer Act 2010 to prohibit the charging of excess prices (otherwise known as price gouging).

Recommendation 3

9.38The committee recommends that, as a matter of priority, the Australian Government establish a Commission on Prices and Competition to examine prices and price setting practices of industries across the economy, and review government and other restrictions on effective competition which are leading to high prices. In relation to supermarkets, the commission should be provided with the authority to:

monitor and investigate supermarket prices and price setting practices, including prices along the supply chain (including the farmgate, wholesale and retail price), mark-ups and profits;

conduct market studies to review restrictions on competition in the supermarket sector;

require supermarkets to publish historical pricing data that is transparent and accessible to both suppliers and consumers;

access any data and information required to undertake its work, including supermarket pricing, mark-ups and profits data and price setting policies (both historical and current);

make referrals to the Australian Competition and Consumer Commission for enforcement; and

publish reports as required and at least on an annual basis.

Recommendation 4

9.49The committee recommends the Australian Government progress legislative amendments to allow the Australian Competition and Consumer Commission (ACCC) the authority to investigate and prosecute unfair trading practices.

Recommendation 5

9.50The committee recommends that The Treasury take immediate steps to make the Food and Grocery Code of Conduct mandatory, with an appropriate regime of financial and other penalties for breaches and protections against supplier retribution. The code should be made mandatory as soon as possible and no later than 30 September 2024.

9.51To ensure complete supply chain protection, the mandatory Food and Grocery Code of Conduct must include the Dairy Code of Conduct and the Horticulture Code of Conduct as schedules.

9.52The Food and Grocery Code of Conduct should:

be fully mandatory for retailers with enforceable rules;

be enforceable with substantial penalties for breaches;

include mandatory minimum standards that cannot be 'opted out' of;

be overseen by Code arbiters who are fully independent of supermarkets, who should proactively conduct random audits so suppliers have anonymity in the process;

create provisions specifically for the trading of fresh produce, reflecting the perishability of the product and the particular vulnerability of suppliers;

create a portal for suppliers to lodge issues, and once a threshold is met and a consistent theme is identified, the ACCC can investigate the issue;

investigate implementing measures under the Code that provide suppliers with improved information symmetry, which should include creating a price register for farmers to assist them in understanding market prices across primary industries; and

a public consultation period to implement all of the above.

Recommendation 6

9.59The committee recommends that The Treasury amend the mandatory Food and Grocery Code of Conduct to explicitly provide that:

greenlife industries are captured by the code; and

the code includes any large retailer that stocks food and/or grocery products.

Recommendation 7

9.1The committee recommends that the Australian Government implement merger reforms as proposed by the Australian Competition and Consumer Commission (ACCC), including:

mandatory notification of mergers above a prescribed notification threshold, with a call-in power for proposed transactions below the threshold that raise potential competition concerns;

merger clearance tests applied by the ACCC and Tribunal on review;

reversal of the test for clearance under section 50 of the Competition and Consumer Act 2010 to require merger parties to satisfy the ACCC, or the Australian Competition Tribunal on review, that the transaction would not be likely to substantially lessen competition; and

amendments to section 50 of the Competition and Consumer Act 2010 to provide for increased focus on changes to the structural conditions resulting from a merger that may make markets less competitive and to address creeping acquisitions.

Recommendation 8

9.71The committee further recommends that as part of reform to merger laws, the Australian Government provide the Australian Competition and Consumer Commission with the powers to investigate and make recommendations to government to address land banking in the supermarket sector.

Recommendation 9

9.75The committee recommends that the Australian Government amend the Unit Pricing Code made under the Competition and Consumer Act 2010, so that supermarkets are required to:

adopt a mandatory information standard for unit pricing, including improvements to the legibility and prominence of unit prices, and changes in price and size of products, in line with consumer expectations;

standardise and rationalise discount and promotional terms, to prevent promotional material indicating a discount when one is not available; and

prominently disclose any changes in the price or size of a product.

9.76The committee recommends that the Australian Government ensure the Australian Competition and Consumer Commission is provided with sufficient regulatory and enforcement powers regarding the Unit Pricing Code.

Recommendation 10 —

9.80The committee recommends the Australian Government increase funding to the Australian Competition and Consumer Commission (ACCC) to ensure the ACCC is adequately funded and resourced to regulate, investigate, enforce and prosecute competition policy matters, including unfair trading practices, the Unit Pricing Code, the Food and Grocery Code of Conduct, and any other matters falling within its remit.

9.81The committee further recommends that the ACCC be given appropriate legislative powers to compel whatever information it requires as part of its investigative work.

Recommendation 11

9.86The committee recommends that the Department of Climate Change, Energy, the Environment and Water update the 2017 National Food Waste Strategy to include a best-practice, nation-wide approach to addressing food waste in the supermarket chain. The updated strategy should consider:

reform of the use-by and best-before labels and their role in food wastage and consumer confusion;

whether unrealistic cosmetic standards are adversely affecting farmers and the quantity of food waste across the country; and

a requirement for supermarkets to publish regular data on food waste volumes, including food rejected for cosmetic reasons and food donated to foodbanks and similar charities.

9.87The committee recommends that the above reforms be progressed following a public consultation period.

Recommendation 12

9.90The committee calls on supermarkets to do more to improve the health and safety standards for supermarket employees, to ensure supermarket workers are appropriately protected from customer abuse.

Recommendation 13

9.96The committee recommends that the Senate refer to the Economics References Committee the following matters for inquiry and report by the last sitting day of February 2025:

The role of multinational food manufacturers in the supermarket industry in Australia, with particular reference to:

-the bargaining power of multinational food companies when engaging with Australian supermarkets;

-the process of multinational food companies in negotiating price changes with Australian supermarkets and retailers;

-the role of the multinational food companies in price setting and how this impacts on food prices;

-the price of company products in other jurisdictions and how these compare to Australia; and

-any related matters.

Recommendation 14

9.100The committee recommends that the Senate refer to the Economics References Committee the following matters for inquiry and report by the last sitting day of February 2025:

The role of Australia's 'big box' retailers in price setting, with particular reference to:

- the market behaviours of such retailers, including price negotiation practices and engagement with suppliers;

-acquisition and use of land; and

-any other related matters.