Exploitive powers of supermarkets confirmed, with growers forced to foot the bill, while Bunnings gets a free pass

10 April 2024

The NFF Horticulture Council strongly supports the key recommendations detailed in the interim Independent Review of the Food and Grocery Code of Conduct report released today.

The Council is particularly encouraged to see recommendations for the enforcement of the mandatory code, and the possibility of increased fines reaching up to 10 per cent of turnover, potentially amounting to billions.

NFF Horticulture Council Chair Jolyon Burnett said: “If we are going to allow duopolies to exist, we need to make them accountable for any anti-competitive behaviour. The supermarkets including Bunnings, need to know if they abuse their market powers, the fines imposed will be meaningful.

“The next challenge will be to ensure that when the ACCC identifies an abuse of market power, there is a realistic chance of success in court within a commercial timeframe. Otherwise, the announced fines will be futile.”

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NFF Horticulture Council also supports the need to make senior executives accountable for the practices and behaviours of their buyers and category managers. Where coercive control is exercised, there should be no room for ‘plausible deniability’.

More broadly, the report acknowledges ‘the heavy imbalance’, the fear of commercial retribution, and the highly exposed nature of growers to the buying practices of the supermarkets.

“For decades, fruit, vegetable and plant nursery growers have been forced to bear the brunt of a tilted playing field, but have been unable to speak out in fear of commercial retribution. To have a report identify these issues is an important milestone,” Mr Burnett said.

“Given the high level of vulnerability due to the perishable nature of horticulture produce, we support the need for additional stand-alone protections for the sector.

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“The sector provides 98 per cent of Australia’s fresh fruit and vegetables and almost all the nation’s nursery products and underpins the country’s food security. Some growers have reported not having a price increase for more than 15 years.

“As a virtual monopoly in the ornamental plant market, Bunnings needs to be included in the Code to cover its dealings with plant nurseries. The issues faced by this sector are identical to the challenges faced by fruit and vegetable growers. It cannot be given a free pass.”

The NFF Horticulture Council welcomes all the recommendations in the interim report and commends Craig Emerson on his work to date. The Council looks forward to the final report and prompt and meaningful action by the government.