Supermarket code close

Beleaguered grocery brands may be armed with a new code in a matter of weeks, as the industry looks for a self-regulatory solution to the ongoing supermarket supplier war.

Coles boss Ian McLeod suggested yesterday that the voluntary code will be finalised in six weeks, but this date may be brought forward if this week’s negotiations go well, reports the AFR.

Inside Retail understands the code is in its final draft stages, however, key issues surrounding the major supermarkets’ contentious home brand labels still need to be ironed out.

It is understood that suppliers are pushing for a clause that would stop their confidential information being leaked to producers of the major supermarket’s private label, a sector widely reported to currently be growing at a fast rate.  

The Australian Food and Grocery Council (AFGC), which is managing the code, will meet with Coles today, with a separate meeting with Woolworths set for the near future.

“This isn’t a political game. It involves lawyers and the government and the ACCC. It’s a matter of due process…nobody is wanting to delay [the draft code],” said a spokesperson for the AFGC to Inside Retail. 

Woolworths CEO, Grant O’Brien, dismissed calls for greater regulation of the grocery sector as recently as late February. 

“When there are calls for regulating choice in a supermarket, I really start to wonder where the Australian consumers’ interests are being prioritised,” he said at a forum held by the Queensland University of Technology.

The voluntary code will centre around four key supplier issues: contractual certainty, dispute resolution, appropriate sharing of risk, and investment and innovation.

It is hoped this will address growing supplier concerns of the last few years, primarily in relation to supermarkets using allegedly bullying tactics to drive down suppliers’ prices.

The AFGC spokesperson told Inside Retail that the draft code “is getting close” and that the body is aiming not to add any more cost burdens to the supermarket sector’s regulatory processes.

The AFR is reporting that “disquiet” is growing among retailers to release the code as soon as possible, lest the government or ACCC make good on their promise to implement a mandatory code, which would likely be more stringent.

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