Senate sets sights on supermarket duopoly; Xenophon demands more

The recently released Senate Select Committee report examining Australia’s food processing sector has made 35 key recommendations as to how the industry can be improved and made more sustainable.

However, some senators felt that the recommendations did not go far enough, with a minority report making a further three recommendations.

These additional recommendations included rejecting calls for further review of the Fair Work Act, encouraging food processing industry employers to use existing FWA mechanisms and calling on the Federal government to increase dialogue within the sector around opportunities and obligations arising from the carbon tax.

Considering widespread concerns as to how the carbon tax will impact prices along the supply chain, the committee’s report recommended the government monitor how these costs are being passed down the food supply chain and the impact the tax is having on profitability of businesses in the chain, including to farmgate.

Outspoken Independent Senator Nick Xenophon submitted his own dissenting report which makes a further 10 recommendations, calling for stronger consumer and competition laws in order to better monitor and control any potentially anti-competitive conduct by Coles and Woolworths.

“The federal government must move to make a fairer operating environment for Australian food processors and priority consideration needs to be given to the divestiture of the grocery retail market.

“Australia’s current regulatory regime has made it too easy for the Coles and Woolworths duopoly to profit at the expense of producers and consumers.

“To that extent producers must be protected by effective laws against unfair contract terms and unconscionable conduct.”

The Select Committee has recommended that the major Australian supermarkets establish a voluntary set of benchmarks to measure and improve satisfaction of suppliers in dealing with the supermarkets and that these be incorporated within their corporate social responsibility policies.

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