Australia’s supermarket giants could be fined billions of dollars – the highest penalties for any industry – if they breach a revamped and mandatory code of conduct designed to fix an imbalance of bargaining power between the major grocery stores and small suppliers.
Aldi would be fined up to $1.1 billion and Metcash, which owns the IGA brand, would face up to $800 million penalties, according to the companies’ estimated revenue for 2024. Treasurer Jim Chalmers said the government had accepted all of Emerson’s recommendations as part of its “wide-ranging cost-of-living crackdown on anticompetitive behaviour in the food and grocery sector”.
While the code can’t impose binding arbitration on a company, Emerson said the four supermarket companies had given their in-principle agreement to be bound by the decisions of independent arbitration, and to award compensation of up to $5 million. Emerson’s report said food and grocery suppliers had no choice but to deal with Woolworths, Coles, ALDI and Metcash if they were to succeed in Australia. But they feared retribution from those supermarkets if they raised complaints or exercised their rights under the code.
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