Australian regulator to offer whistleblower protection to suppliers

By Ankush Chibber

- Last updated on GMT

Protection for whistleblower suppliers from the ACCC to crack Coles and Woolworths hold on market
Protection for whistleblower suppliers from the ACCC to crack Coles and Woolworths hold on market

Related tags Food Supermarket Accc

Aware that food and grocery suppliers maybe too scared to report abuse of power tactics by the supermarkets, the Australian trade watchdog has said that it would offer protection for reporting parties.

Talking to The Australian​, the Australian Competition & Consumer Commission chairman (ACCC) Rod Sims said that the regulator was unable to take action against big retailers because suppliers were too scared to give evidence.

FoodNavigator-Asia contacted the office of the ACCC chairman, which corroborated the comments, but were unable provide additional detail.

Sims said that the regulator was ready provide shield of secrecy for suppliers who blow the whistle on retailers, mainly Coles and Woolworths, that have been conducting a long-running price war that has created a hostile environment for suppliers.

Many parties, including the Australian Food and Grocery Council (AFGC) and farmer bodies, have alleged that the two supermarkets have abused their market power to demand cheaper prices from suppliers on many occasions.

Sims however pointed out that no supplier has yet come forward with direct evidence and all that they have been getting is third-party hearsay, restricting them from pursing any legal action.

Urging food and beverage manufacturers to come forward, Sims said that the ACCC is ready to talk to them to talk in confidence and that the organization would protect their identity if they came forward.

In October 2011, when he first took over the role of ACCC chair, Sims said that he would keep an eye on the retailers over concerns that they were wielding too much power.

“The ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets,” ​he said at the time.

Super ombudsman needed, says food body

Last week saw the AFGC asking the government to appoint a Retail Ombudsman to enforce a Supermarket Fair Trading Code of Conduct.

The call came right after Coles said that it will discount a range of food items by as much as 50%, which AFGC chief executive Kate Carnell said was of concern:

“If these current price wars continue, the profitability of Australia’s food manufacturing sector, as well as farmers, will be eroded and the result could be a significant loss of both processors and producers,”​ said Carnell.

Carnell remarked this latest Coles move highlighted the need for a regulated code of conduct, enforced by an Ombudsman, to create a more level playing field between manufacturers and the supermarkets.

“Australia has the highest levels of supermarket concentration in the world, delivering significant market power to [the majors] and making it increasingly difficult for suppliers to negotiate reasonable trading terms,”​ she said.

Related topics Business Oceania Supply chain

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