Nov. 19, 2013, 4 a.m.
A NEW voluntary code of conduct between supermarkets and suppliers has been cautiously welcomed by south-west agricultural leaders.
The Australian Food and Grocery Council (AFGC) brokered a deal with Coles and Woolworths which will govern the supply chain from production to the point of sale.
The code prevents supermarkets from changing contracts retrospectively and using the intellectual property of suppliers.
United Dairyfarmers of Victoria president Kerry Callow said the new code was a step in the right direction but needed to be mandatory in order to be fully effective.
The Macarthur dairy farmer said the relationship between supermarkets and primary producers had been strained for some time.
“It’s certainly a step forward but it’s only voluntary, so it’s power is seriously weakened,” Ms Callow said.
“We would prefer a mandatory code.
“You would think that if the supermarkets are signing up voluntarily, there’s a strong chance that the code doesn’t impede their current practices much.”
The AFGC says the code also ensures greater transparency over shelf allocation for branded and private label products.
Farm lobby groups have criticised Woolworths and Coles in recent years for giving greater shelf space and prominence to generic labelled products over established brands.
Ms Callow said shelf allocation was one of the concerns raised two years ago when Coles decided to reduce its generic fresh milk to two dollars for two litres. Woolworths quickly followed suit.
“The duopoly is something we have to deal with but it does mean that farmers aren’t able to work on a level playing field,” Ms Callow said.
Small Business Minister Bruce Billson said the code would improve supply chain transparency.
“For some time there have been concerns about the balance in the relationship between the supermarkets and suppliers,” he said.
“This draft code is an important, substantial and constructive step in improving those interactions.”