Australian supermarkets may have to pay more because the government wants to ensure they follow the rules of the goods they sell. A new official report says supermarkets have too much power over suppliers and this is unfair.
But they are not talking about breaking up supermarkets. They believe that if they do not behave unfairly, a higher fine will make them feel better. Regulations on how supermarkets should treat suppliers are now optional. But according to the report, this rule is ineffective because there are no penalties for violating it, and supermarkets can’t follow through if they wanted to.
The report also said retailers were afraid to complain because they feared retaliation from supermarkets. They may change the terms of their contract, move their products to less visible parts of the store, or stop selling their products altogether.
The government wants to change this. They want the rules to be made mandatory for all supermarkets such as Coles, Woolworths, Aldi, and Metcash. And if these supermarkets break the rules, they can be fined up to 10% of their annual turnover, at most. For less serious violations, there would be lighter penalties.
But because litigation can take too long, the report suggests other options for suppliers to resolve issues outside of litigation, such as confidential negotiations or the use of mediation.
Some people, like the Greens and the former ACCC president, believe the government should go even further and demolish the supermarkets if they are doing the wrong thing. However, the report fails to support this view.
Read about: Dollarama predicts that its yearly sales will surpass expectations due to high demand