Food and Grocery Code of Conduct Review

The Australian Food and Grocery Code of Conduct (AFGC) is a prescribed voluntary code under the Competition and Consumer Act 2010.

The Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2015 (the Code) was introduced to improve transparency and certainty in the commercial dealings between retailers, wholesalers and suppliers, and provide an effective process for parties to resolve their disputes.

The AFGC is scheduled to sunset (be automatically repealed) on 1 April 2025. Prior to sunsetting, a Review of the Code is required to determine whether it remains fit for purpose.

A Review into the dispute resolution provisions (Part 5 of the Code) was conducted earlier this year and the report is now with the Government for consideration. The Review of the remaining provisions of the Code was announced on 3 October 2023.

At this point in time a Reviewer has not been announced, nor has a time frame, however we do know that the final Review must be completed by June 2024.

Treasury has advised that the Review will undertake two key activities:

1. Assess the effectiveness of the Code provisions in achieving the purpose of the Code to improve the commercial relationship between retailers, wholesalers and suppliers in the grocery sector, and
2. Consider the need for the Code, including whether it should be remade, amended or repealed.

In evaluating the purpose and features of the Code, the Review will have particular regard to:

1. The impact of the Code in improving commercial relations between grocery retailers, wholesalers and suppliers;
2. Whether the Code’s provisions should be extended to other retailers or wholesalers operating in the food and grocery sector;
3. Whether the Code should be made mandatory; and
4. Whether the Code should include civil penalty provisions.

AUSVEG will be preparing a submission into the AFGC Review.
In preparation, we are seeking detailed information from the vegetable, potato and onion sector on their experiences dealing with retailers, and how the Code be modified to ensure a more even playing field. 

Some suggestions already under consideration by AUSVEG for the submission include:

1. Making the AFGC mandatory rather than voluntary.
2. Enabling greater equity around the weekly price negotiations for perishable goods.
3. Replacing supply agreements with greater contractual certainty, including price.
4. Implementing fines and financial penalties for those businesses or individuals that breach the AFGC, including mechanisms to compensate disadvantaged suppliers.
5. Appointing Code Arbiters independent of the retailers.
6. Access to education and training for industry to better understand the AFGC, and assist in levelling the playing field.
7. Enable mechanisms that require increased transparency and reporting from retailers.

WHAT CAN YOU DO?
1. Participate in our online grower forum
AUSVEG will have two ‘grower only’ online forums to express concerns and provide ideas for improvements to the AFGC. You only need to attend one. The dates are:

• Friday 1 December @ 11am-12pm
• Tuesday 5 December @ 4pm-5pm

To attend, please email publicaffairs@ausveg.com.au with your preferred date, and you will be sent an invitation (webinar link) to attend. These forums are for growers/suppliers only and members participating will be asked to respect privacy. Chatham House rules will apply.

2. Share your story
Please write to publicaffairs@ausveg.com.au with case studies and examples that we can use to support necessary changes to the AFGC.
AUSVEG will work with growers to ensure anonymity whilst maintaining the rigour of the information.

3. Provide evidence
To support your feedback, please provide data or documents (i.e. emails ) as evidence for changes to the AFGC
AUSVEG has engaged commercial lawyers to review current trading supply arrangements and commitments, and is also collating data from grower discussions in relation to long-term price trends, supply arrangements, margin markups and retailer behaviour complaints.

For more information, contact AUSVEG National Public Affairs Manager Lucy Gregg at lucy.gregg@ausveg.com.au, or 03 9882 0277.