TFGA welcomes ACCC legal move on allegations against Coles

The state’s peak farming organisation, the Tasmanian Farmers and Graziers Association (TFGA), has welcomed legal action by the Australian Competition and Consumer Commission (ACCC) against Coles Supermarkets over the alleged misuse of its market power to coerce payments from suppliers.

In Australia, the supermarkets have considerable power when it comes to dealing with suppliers, and unfortunately, suppliers and farmers don’t often have that same bargaining power. The ACCC alleges that, in 2011, Coles sought to boost earnings by requiring grocery suppliers to pay ongoing rebates. If a supplier refused, they were threatened with commercial consequences. The allegations concern 200 small grocery suppliers.

“The allegations have raised serious concerns throughout Australian small business and the national farming community,” TFGA chief executive Jan Davis said today.

“They highlight the imbalance of power in the food supply and retail sector in which farmers and other suppliers are at a distinct disadvantage. A misuse of market power is against the national interest; it is certainly against the interests of the weaker players.”

“This imbalance does not promote trust and goodwill between supermarkets and their farmer suppliers. Both should be working towards a fair profit, not driving vulnerable farmers to the wall,” Ms Davis said.

Farmers want to see the implementation of fair arrangements that prevent any further activities or outcomes that negatively impact on farmer revenue.

As a member of the National Farmers Federation, TFGA supports a mandatory code of conduct that ensures transparency and equity across the supply chain. The NFF was actively involved in the development of a prescribed voluntary code with retailers and processors.

Ms Davis said “Should the ACCC allegations prove true, this will add weight to the industry’s decision to move to a mandatory approach. However, we have not shut the door to what a prescribed voluntary code could offer in terms of a productive way forward on this issue.”
TFGA chief executive Jan Davis