Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Small Business. I remind the minister that the draft food and grocery industry code of conduct has been released today. Will the minister outline how the government's work with Coles, Woolworths and the Australian Food and Grocery Council will benefit suppliers in the electorate of Murray?

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

I thank the member for Murray for her question and her abiding interest in this topic. Today is not only the birthday of my friend and colleague the Minister for Health and my friend and colleague the Minister for the Environment, it is actually the birthday of the Food and Grocery Prescribed Industry Code of Conduct. It is a very exciting day for those in the supply chain and I am getting a lot of encouragement about the significance of this day. We have seen for many years concerns about the imbalance in market power where these very large businesses, our major supermarket retailers, have been dealing with much smaller suppliers and small business and how at times the small businesses feel quite vulnerable and quite unable to exercise great commercial leverage because they are so dependent on those supermarkets.

Our encouragement to Coles and Woolworths and the Food and Grocery Council, recognising that they know their industry best, is to do their best work in coming up with a collaborative code, in working cooperatively to address the legitimate concerns that are there. They started that work when the coalition was in opposition and, despite the clear and consistent message from the coalition, the previous Labor government was all over the place. In fact, that work was actually ruined by a politically motivated intervention by the previous government to try and position itself, Labor, as doing something about this area of concern but then actually destroying the very collaboration that was leading to the outcome that we have today. So today I was pleased to receive this document.

This is a voluntary code. Just so people are aware of what a voluntary code is, that means people can volunteer to participate, but once they have chosen to participate it becomes a prescribed code and they are then bound to abide by the provisions of this code. So if Coles and Woolworths, as they have stated today, volunteer to engage—and we encourage all retailers to do that—then if they decide to withdraw everyone will know, everyone will see that action. For people who misunderstand the nature of these codes, I hope that gives them a very clear indication of what is going on.

It mandates grocery supply agreements which—for the member for Murray—will deal with transparency and predictable terms. It will deal with what are fair and reasonable minimal terms. It will put a limit on the kinds of changes that can be made mid-contract. It will talk about what happens with shrinkage and wastage, where some suppliers in the past have been expected to fund shrinkage and wastage in a retail business even though they have no control over that business. It deals with delisting. It deals with payment predictability. It deals with how product quality and standards will be dealt with. It will deal with how own brands are dealt with, so that an idea or an innovation that a supplier that might raise with a supermarket is not picked up and run off to the own brand area and perhaps given to another supplier. It has dispute resolution mechanisms. This is a very significant and substantial step forward in an area of market concern. Where Labor failed to act, the coalition has acted. I recognise and welcome Coles, Woolworths and the Australian Food and Grocery Council—a good piece of work. (Time expired)