Coalition Senators' additional comments

Coalition Senators’ additional comments

1.1In response to Schedule 4—Industry codes, Coalition Senators note that, despite the Albanese Government’s efforts to strengthen the Mandatory Food and Grocery and Unit Pricing Codes, these initiatives remain heavily delayed or deliver insufficient disincentive to anticompetitive behaviour.

The Food and Grocery Code

1.2The Albanese Government has confirmed that its Mandatory Food and Grocery Code will not come into force until 1 April 2025.

1.3This will be nearly 10 months after the Government announced it would accept all the recommendations of the Emerson Report, including making this Code mandatory—something the Coalition has been calling for since late 2022.

1.4Infringement notice penalties under the Code, although raised by the Government in December, are still capped at $198 000.

1.5Treasury officials gave evidence at the most recent Senate Estimates hearings in November 2024 that other recommendations of the Emerson Report, among them an anonymous complaints mechanism and Code Supervisor, would not be operational until the Mandatory Food and Grocery Code is implemented.[1]

Unit Pricing Code

1.6During the same Senate Estimates hearing, Treasury also confirmed that consultation on the Unit Pricing Code, announced by Prime Minister Anthony Albanese in October 2024, would not begin until the first quarter of 2025.[2]

The Coalition’s alternative

1.7In June 2024, the Coalition announced a comprehensive supermarket competition package.

1.8This package includes:

establishing a Supermarket Commissioner to act as an impartial complaints avenue for suppliers;

raising the infringement notice fine for breaching the Code to $2 million; and

introducing targeted, carefully prescribed divestiture powers where serious allegations of land banking, anti-competitive discounting, and unfairly passing costs on to suppliers occurs.

Coalition Senators’ findings

1.9The Albanese Government’s delayed response is a case of too little, too late, and betrays a distracted Government that has lost touch with the urgent need for cheaper groceries among consumers, paving the way for new entries into the supermarket sector, and improved opportunities and protections for suppliers.

1.10This inactivity is taking place against a backdrop of twin cost of living and cost of doing business crises, fuelled by Labor’s economic mismanagement and misguided priorities, and has left stakeholders waiting unnecessarily for relief— including over the last Christmas and summer school holidays.

1.11Food stress remains endemic, with the 2024 Foodbank Hunger Report revealing 2 million Australian households, or 19 per cent, had experienced severe food insecurity in the previous 12 months.[3]

1.12Meanwhile, court action has been taken against Coles and Woolworths by the Australian Competition and Consumer Commission (ACCC) for alleged anti‑competitive activity.

1.13There are also legitimate concerns that the timing of the upcoming Federal election risks blowing out delays further still.

1.14The Albanese Government’s current policy features insufficient disincentive for anti-competitive conduct, especially among larger operators.

1.15It was telling that the ACCC told a hearing of the Senate Cost of Living Committee last year that key barriers to new supermarket entry, including high establishment costs and logistics, were not addressed by the Government’s initiatives.[4]

1.16The Albanese Government finally treat supermarket sector competition with the urgency and sufficient penalties required to deliver cheaper groceries, greater opportunity for new entries, and protections for suppliers.

Footnotes

[1]Mr Tony McDonald, Assistant Secretary, Competition and Digital Platforms Branch, Department of the Treasury, Committee Hansard, 6 November 2024, p. 114.

[2]Mr McDonald, Department of the Treasury, Committee Hansard, 6 November 2024, p. 114.

[3]Foodbank, Hunger Report 2024, October 2024, p. 2.

[4]Mr Mick Keogh, Deputy Chair, Australian Competition and Consumer Commission, Select Committee on the Cost of Living, Proof Committee Hansard, 11 October 2024, p 25.