Ali Moore:
The big issue you might remember, that the government is making the code – the supermarket code – which deals with relationships with suppliers, mandatory. Dr Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury. Dr Leigh, welcome.
Andrew Leigh:
Thanks Ali, great to be back with you.
Moore:
The 20 recommendations from the ACCC. They go to things around providing us with information about package sizes, being more transparent with suppliers. You’ve got the code of conduct that you’re making mandatory. You’ve got the 2 bigger – the 2 big players in court over misleading conduct. But I guess beyond that is this just the bed that we’ve made and now we’ve got to lie in it?
Leigh:
I don’t think so Ali. I think we’re able to continue to take action against a significant duopoly whose profits are among the highest in the world and whose margins have been growing over the last 5 years.
This report really is a deep dive data analysis. They analyse over a billion prices and uncover some problematic practices, such as oscillating specials where a product will be on special in Coles one week and Woolies the next week. And that just keeps on going on and on for week after week.
What we’ve done is provided resources to fund CHOICE, to give shoppers more information about where to get the best deal. As you said, we’ve made the Food and Grocery Code mandatory with multi‑million‑dollar penalties. Unfortunately, the Liberals and Nationals voted against it, but our view was we needed to toughen that code, and today we’ve announced additional funding for supplier groups to get the training they need, particularly those fresh food suppliers who are really feeling the squeeze.
Moore:
I guess though Andrew Leigh, I found that curious. You’re putting $2.9 million, so let’s call it $3 million into helping those suppliers. And the wording is that will empower farmers to enforce their rights under the Food and Grocery Code.
It’s not a lot of money to cover a lot of suppliers, a lot of supplier agreements across the country, and the mere fact that you’re supplying it would imply that you are expecting the big players to fight their suppliers when they think it’s in their advantage to do so. So will there be more money where that’s coming from?
Leigh:
Well I mean, one way to think about it is that the big piece of reform we’ve done is taking a toothless voluntary code set up by the Liberals and Nationals and turned it into a mandatory code with multi‑million‑dollar penalties. That comes into effect next month.
And then as that’s coming into effect, our view is we want suppliers to take the very best advantage of it that they can. So this is $3 million directed towards those fresh food suppliers. And the ACCC says those suppliers feel a particular squeeze because they’ll be required to sign up to annual contracts around volume, but then have these weekly price auctions with the notion that if they don’t supply to one of the majors, they end up having to take produce down to the markets and often get much lower returns for their hard work.
Moore:
But that didn’t actually answer the question. If you’ve given them $3 million, if it becomes a constant issue of the big players fighting suppliers, disputing what they take – you know, that they raise under the code, is there going to be more money to help them do that?
Leigh:
Well Ali, that’s why I’m putting it in the context. The big reform is the change in laws, which directly empowers the suppliers, a tougher Food and Grocery Code and an anonymous complaints process going through the competition watchdog to deal with the fact that many of these suppliers said they feared retaliation. And then, as the icing on the cake, we’ve got that additional training for the food and grocery suppliers.
We’re also making sure that we’re clamping down on shrinkflation. I mean, if shrinkflation was an Olympic sport, some supermarkets would be gold medallists. And so enforcing the Unit Pricing Code ensures that Australians are getting a fair deal at the checkout.
Moore:
You’re listening to the Assistant Minister for Competition, Dr Andrew Leigh. We’re talking about the supermarkets and the, well I guess the amount of market power that they have. No word from the ACCC, no recommendation around divestiture of stores – the Coalition is keen on that. That is something that you argue is not necessary and is not the answer?
Leigh:
Yeah, it hasn’t been recommended by any of the past competition reviews, not Hilmer, not Harper, not Dawson, not Emerson, and not this report. We’re focused on practical solutions that the experts say will make a difference. Divestiture isn’t in that list.
We’re very aware that there are shrinkflation, there’s sneaky prices, there’s unfair deals, and we’re tackling those head on to get a fair deal for families at the checkout as you go, and a fair go for farmers at the farm gate.
Moore:
Another issue if I may Andrew Leigh – to what extent are you worried about the tech companies? This has been in the headlines all day. Today, American tech companies are going to Trump arguing that that move by Australia to effectively tax the big tech players unless they fund domestic news content in this country. Tech companies in the US are saying, you know, that’s a non‑tariff barrier if you like, and Trump should act. How worried are you that Trump will act?
Leigh:
Oh well obviously the new US administration is taking a different approach on a range of issues. But on this one we have a system in place which funds quality journalism, which has been operating for a number of years now, that is not aimed at any particular country. It’s an approach which sees journalism funded through the forms which are making significant money through the journalism that they are linked to.
Moore:
Can I ask you another question without notice Dr Leigh, which may be a little short? We’ve just seen that Infrastructure Australia has put out its assessment of the Suburban Rail Loop, which is a massive project here in Victoria, and it’s going to rely for at least a third of the money required to come from the federal government. You’ve so far allocated $2 billion to go into preliminary works. Further funding is dependent on this review. Have you had a chance to catch up with that?
Leigh:
I haven’t. That’s been squarely in the remit of my colleague, Catherine King who’s both a Victorian and the Infrastructure Minister so I’ll leave the specifics of that to her.
But I know we’ve made record investments in infrastructure, and as somebody who comes to Melbourne often, I certainly will look forward to being able to catch the train from the airport soon.
Moore:
Gosh,don’t hold your breath. I mean, even with that announcement this week Dr Leigh, you would know that there was an agreement to sort of discuss an agreement, and we’re not going to get it by 2033 at the earliest? Do you think you’ll still be coming to Melbourne then?
Leigh:
I certainly hope so Ali, and you know, the key is to get this thing moving. So, I’ll be keen to use it as soon as it’s in place.
Moore:
You and many others I’m sure Dr Andrew Leigh, thank you.
Leigh:
Thanks Ali.
Ali Moore:
The Assistant Minister for Competition, Charities and Treasury there.