KIERAN GILBERT:
Let’s return now to politics here in Canberra. We’ve got a lot to talk about with the Assistant Minister for Competition, Charities and Treasury, Andrew Leigh. You’ve released this review into the Code of Conduct and into supermarkets. It’s going to be made a compulsory code of conduct with some massive fines if the major players breach the rules here, do you think those fines are likely or will the supermarkets change their behaviour?
ANDREW LEIGH:
Well, these are huge firms, Kieran. Woolworths’s estimated revenue this year is $50 billion and so it does make sense that there’s significant penalties associated with the industry code. We’ve got a very concentrated grocery sector, as you well know – the top 3 have a 75 per cent share. So, it’s appropriate that we have a mandatory code of conduct governing their relationship.
GILBERT:
So, who does this cover?
LEIGH:
So, this covers the largest 4 supermarkets. So, Woolworths, Coles, Aldi and Metcash, which runs the IGAs. Costco is at $4.6 billion, just below the $5 billion threshold. We expect that Costco would come in in future years.
GILBERT:
Will it drive prices down?
LEIGH:
Well, it’s all about getting a fair deal for farmers and a fair deal for consumers. You and I spoke last week about what we’re doing in the grocery price comparison space and about the ACCC review. The Code of Conduct is about relationships with suppliers and farmers. And I think Australians want to know that farmers are getting a fair deal and that people are paying fair prices at the checkout. That’s the objective of our policy.
GILBERT:
If a supermarket has a director or someone inside the shopping operation that doesn’t behave accordingly or makes a mistake, how does that get weighed up, as opposed to something that might be systemic against suppliers, for example?
LEIGH:
Well, that’d be a matter for the courts. But you bring up a really important point, which Craig Emerson made as one of his recommendations, which is that the supermarkets have to look at their incentive approaches and make sure they’re not incentivising their buyers to behave badly. That’s a big change, because we’ve seen exposés just this year, talking about the mistreatment of suppliers to Coles and Woolies, one farmer saying he was pulling out of the industry altogether. That’s got to stop. With a mandatory code, we’re confident that the behaviour of the major supermarkets will improve.
GILBERT:
Yes. And it’s not just the code, but something else in the recommendations which jumped out at me was the ability for suppliers to anonymously raise concern now with the ACCC directly. Prior to now, there hasn’t been that mechanism and people were worried if they called out the supermarkets, they’d get blowback. But now they can raise their concerns and do so without the major players knowing.
LEIGH:
You’re spot on: multibillion dollar industry, oodles of suppliers, and yet basically no one’s coming forward with complaints. That doesn’t seem to gel with the way in which Craig Emerson’s review saw the system. The reason is the fear of reprisals. We’re putting a stop to that by allowing anonymous complaints to be made to the Australian Competition and Consumer Commission. Again, a system that wasn’t in place under the Liberals and Nationals, but now will be in place under Labor to get a fair deal for farmers.
GILBERT:
That definitely makes a lot of sense to get a bit more transparency into the system. On the other big story today, Matt Kean walking out with the Prime Minister and Chris Bowen, he’s the new chair of the Climate Change Authority. What do you say to those in the Liberals who’ve said that this is just a distraction from the Prime Minister?
LEIGH:
Look, Matt Kean is at the sensible centre where many other conservatives and many other countries are. If you look at the attitude to climate change among conservatives in Britain or in Germany or in New Zealand, they’re recognising the role that renewables play, taking climate change seriously. It’s only really Peter Dutton’s Opposition which is not taking climate change seriously, wanting to reignite the climate wars. Matt Kean’s a terrific contributor to the public debate. You and I were talking just before we came on air about the NSW election campaign in which Dom Perrottet and Matt Kean comported themselves with extraordinary grace, knowing that they were heading towards a challenging poll. I think he’ll bring not only good intellect but also great sensibility into the role.
GILBERT:
Andrew Leigh, thank you. Appreciate it.