On 28 June 2013, at the Farmers’ Federation 2013 Annual Conference in Melbourne, Marcus Bezzi, Executive General Manager (Enforcement and Compliance) of the Australian Competition and Consumer Commission (ACCC), discussed the regulator’s investigation into major supermarkets.

The ACCC has stated in its 2013 Compliance and Enforcement Policy that it will prioritise competition and consumer issues arising in highly concentrated sectors including, in particular, the supermarket and fuel sectors. In line with this, Bezzi stated that the ACCC continues to investigate claims made against the major supermarket chains in their dealings with suppliers.

Bezzi confirmed that the ACCC has consulted with approximately 50 industry participants on a confidential basis, and has identified a range of alleged conduct by the major supermarket chains that the ACCC is investigating further.

The ACCC has two distinct concerns for purposes of the Competition and Consumer Act 2010 (CCA):

  • first, that the major supermarkets may have engaged in unconscionable conduct in dealings with their suppliers (for example, by deducting amounts due to suppliers, contrary to the terms of the relevant supply contracts), and
  • second, whether there are any misuse of market power concerns through conduct that may discriminate in favour of home brand products.

The ACCC is obtaining further information from a range of suppliers using its compulsory information gathering powers. Bezzi stressed that no action has been taken at this stage and that if the ACCC “decide[s] that there is a basis to take court proceedings it will be for a Court to make any findings of contravention”.

Bezzi stated that the ACCC anticipates wrapping up the current phase of its assessment by the end of 2013.

Bezzi also addressed the idea of a supermarket code of conduct, confirming that the ACCC sees merit in the introduction of a legally enforceable supermarket and grocery industry code of conduct with clear obligations allowing the ACCC and industry to know when traders have crossed the line. However, the code would need to be effective – enabling more effective enforcement of contracts, better encouraging supplier investment, allowing for an appropriate sharing of risk, and allowing more effective dispute resolution – otherwise the code would be pointless.