Australia’s ruling party has committed to ending the long-drawn-out tussle between the country’s supermarkets and its food processors and suppliers to fix a voluntary code of conduct.
Joel Fitzgibbon, the federal agriculture minister, said that the ruling Labor Party, if re-elected, would appoint an independent mediator to help finalise the Food and Grocery Code of Conduct.
Australia’s food suppliers and the two dominant supermarkets, Coles and Woolworths, have so far failed to arrive at a voluntary code of conduct that could ensure fair and transparent dealings between the two sides of the food industry.
A body blow came in March this year when the National Farmers Federation walked away from the negotiating table, saying it would push for a mandatory code of conduct instead of a voluntary code.
Meanwhile, Coles and Woolworths have a stranglehold on nearly 80% of the Australian supermarket trade - itself having one the highest levels of concentration in the world, thereby making it increasingly difficult for suppliers to negotiate reasonable trading terms.
An empty plate
The food industry, represented by the Australian Food and Grocery Council (AFGC), has previously urged the government to appoint a supermarket ombudsman to enforce a legislated Fair Trading Code of Conduct.
Fitzgibbon’s statement was cautious as it used neither the words “mandatory” nor “voluntary” to describe the code being pushed primarily by the suppliers.
Claiming the ability to bring the National Farmers Federation back to the negotiating table, Fitzgibbon said that the “food and grocery code has been an empty plate on the table for too long”.
“Instituting a code will deliver greater transparency for everyone involved in the food supply chain from dairy farmers and fruit growers to producers and consumers.
“The code, combined with the development of standardised contracts, will give our farmers a better starting point to negotiate a fair price for their product,” he said.
Do it or we will
Interestingly, Fitzgibbon also made it clear that if the independent mediator makes no further progress, he would enforce a mandatory code. “
Three months after the election, a newly elected Labor government would expect at least a draft code to be in place.
“That's the sort of progress I am expecting. I am sending the very clear message that if we don't make that sort of progress then the government will have no choice but to turn to a mandatory code,” he stated.
Fitzgibbon also promised a national register of all foreign purchases of agricultural land, first promised a year ago, would be up and running by July 2014.
“A comprehensive register of foreign-owned agricultural land would clarify the facts in what has been an emotive and political debate.
“A factual register will end the politicking and give the community clarity around the level and nature of foreign ownership of Australian agriculture,” he added.