The Treasury is consulting on 'Improving Commercial Relationships in the Food and Grocery Sector' and the draft Food and Grocery Code of Conduct (the Grocery Code).
In November 2013, Coles, Woolworths and the Australian Food and Grocery Council provided their jointly developed Grocery Code to the Government. The Grocery Code was subsequently redrafted to comply with the legislative framework under the Competition and Consumer Act 2010 (CCA).
The proposal brought forward by these industry proponents is for the Government to prescribe the Grocery Code as a voluntary industry Code under the CCA. If a retailer agrees to be bound by the Grocery Code and is later found to have breached it, enforcement action can be taken under the CCA by the Australian Competition and Consumer Commission (ACCC) or by private action. There are a range of remedies for breaches of a prescribed industry code, including injunctions and compensation for damages.
The Government welcomes this business-led response. The proposed Grocery Code represents an important step forward for the industry. However, before Government decides to prescribe an industry code, it is essential to undertake extensive public consultation and rigorous analysis to ensure the Grocery Code will be effective in establishing a minimum standard of conduct in the industry, and that its benefits outweigh the regulatory costs.
This consultation paper also represents the Government's Early Assessment Regulation Impact Statement (RIS). The RIS process is part of the Government's firm commitment towards better regulation that delivers net benefits for businesses and the community. The objective of the Early Assessment RIS is to inform the Government's decision about how to proceed with the Grocery Code based on evidence and feedback from stakeholders. This will underpin the subsequent Final Assessment RIS, which will build on the consultation paper by discussing the results of the consultation process, the evidence that has been gathered and how the final conclusion is reached.
Both the Early and Final Assessment RIS will be published on the Office of Best Practice Regulation's website.