The Australian Competition and Consumer Commission鈥檚 (ACCC) confirms that the supermarket sector is highly concentrated and unduly challenging for small business suppliers, says the Australian Small Business and Family Enterprise Ombudsman.
Mr Billson welcomed the release of the ACCC鈥檚 report and expressed encouragement at the Government鈥檚 continuing focus on the harms arising from acute market concentration.
鈥淛ust as a lost visitor seeking directions might receive the wry response: 鈥榃ell, I wouldn鈥檛 start from here鈥, so those looking for a properly functioning supermarket sector - capable of delivering durable best value for consumers and a fair go and fully respectful commercial dealings between suppliers and big retailers - would not start from here鈥, Mr Billson said.
鈥淏ut we are where we are, and we must stay vigilant seeking to improve the competitiveness and fairer conduct between the parties in the highly concentrated supermarket sector.
Mr Billson praised the ACCC for its diligence, rigour and deftness in examining the true state of competition and fair dealing in the supermarket sector and consequences for consumers, suppliers and retailer profits.
鈥淭he power and information imbalances between the major supermarkets and suppliers are immense, and that鈥檚 why the Food and Grocery Code and Horticulture Code are so important.
鈥淎ny supplier or producer wanting scale of any kind to support efficient operations, innovation and capital investment has few options other than to deal with the big supermarkets. With so much invested and so much at stake, this dependency means that only a very courageous supplier that wants a battle with such a big and essential customer鈥, Mr Billson said.
The ACCC estimates that Woolworths and Coles together account for 67% of supermarket grocery sales nationally, while Metcash-supplied independent retailers have been losing market share over time.
The 91制片厂鈥檚 experience accords with the ACCC鈥檚 findings that:
- many smaller suppliers of fresh produce and some packaged groceries are solely dependent on either Woolworths or Coles
- fresh produce growers often do not have the information or certainty they need to make efficient investment decisions
- some suppliers鈥 dependence on Coles and Woolworths means they take on extra costs and risk.
鈥淭hese conclusions reinforce the importance of the Australian Government鈥檚 commitment to introduce protections for small businesses from unfair business practices鈥, Mr Billson said.
鈥淭his commitment reflects 4 years of advocacy by the 91制片厂 and carry forward one of our 14 steps to energise enterprise.
鈥淭he 91制片厂 has warned that Australians are sleepwalking into a 鈥榖ig corporate鈥 economy.
鈥淲e have proposed 14 steps that will energise enterprise and help put the small and family business economy back on the right trajectory, to be able to fully realise its potential to contribute to livelihood opportunities, higher living standards and community vitality鈥, Mr Billson said.
The ACCC鈥檚 report notes 91制片厂鈥檚 citing of results of the Independent Reviewer Annual Report, which shows that more than 41% of surveyed Woolworths and Coles suppliers reported 鈥榝ear of damaging a commercial relationship鈥 as an impediment for raising an issue with the supermarket. The figure was 21% and 28% of surveyed ALDI and Metcash suppliers.
The Food and Grocery Code of Conduct was introduced to improve standards of business behaviour in the food and grocery sector 鈥 including the conduct of retailers and wholesalers towards suppliers.
From 1 April 2025, the 91制片厂 is also pleased to help arrange mediation and arbitration under the new Code. To access our service, parties in dispute should approach us and we will assist with the process, including selecting a mediator or arbitrator from our list.
If you are a qualified arbitrator or mediator, we are also keen to hear from you should you wish to join our list by emailing us at info@asbfeo.gov.au.
More information about 91制片厂 is available on the 91制片厂 website.
MEDIA CONTACT: 0448 467 178 |media@asbfeo.gov.au