Suppliers rejoice as Labor pledges “fair go” for farmers on standardised contracts

Farmers are growing more hopeful the combined power of Coles and Woolworths will be dampened through new plans announced by Labor to develop standardised contracts for suppliers, which carry more protections.

Both major parties are now indicating they will be cracking down on the market duopoly – last week, Coalition small business spokesperson Bruce Billson said he would make contract protections available to small businesses.

Today, Labor has pledged to “ensure farmers and consumers get a fair go” by developing standardised contracts for suppliers with the help of the National Farmers Federation.

Other initiatives include appointing an independent mediator to negotiate a food and grocery code of conduct if the Australian Food and Grocery Council and Coles and Woolworths can’t come to an agreement by the end of 2013.

A spokesperson for the AFGC told SmartCompany it was pleased to see Labor acting to reduce the power of the major supermarkets.

“The Coalition has a long-standing commitment to an extensive review of competition law, and it is good to see the government now also committing to take this issue seriously,” the spokesperson said.

“We are ready to sit down with whoever wins the election to go through where we have agreement, the points of difference and a mechanism to resolve the outstanding issues.”

There will also be a stocktake of existing operational overseas land ownership, recipients of the Transitional Farm Family Payment will be able to apply for an extra six months’ support to June 30, 2014 and there will be a review of the success of Labor’s $440 million Farm Finance Package.

The initiatives form Labor’s “Fair Go for Farmers” policy.

Agriculture Minister Joel Fitzgibbon said in a statement these are commonsense measures aimed at supporting farmers.

“Farmers make a massive contribution to our economy and are caretakers of vast areas of the country. They should be able to focus on improving their farm efficiency and profitability, not be tied up with complex and protracted contract negotiations,” he says.

Fitzgibbon says a food and grocery code had been “an empty plate on the table for too long”.

“Instituting a code will deliver greater transparency for everyone involved in the food and supply chain for dairy farmers and fruit growers to producers and consumers.

“The code combined with the development of standardized contracts will give our famers a better starting point to negotiate a fair price for their product,” he says.

The proposed code of conduct has been in the pipeline for 12 months and arose from allegations Woolworths had been threatening suppliers to find further savings.

In June, the voluntary code of conduct was thought to have been near completion, but it is yet to be finalised.

“The AFGC remains committed to finalising a voluntary industry code backed by the ACCC to give it real teeth in addressing competition issues in the supermarket-supply chain,” the AFGC spokesperson said.

Earlier this year the National Farmers Federation withdrew from the process after losing faith in negotiations.

The major supermarkets said today they’d be happy for the NFF to rejoin discussions and reiterated their support for the voluntary code.

“We believe a a volunatary Code of Conduct will provide certainty and confidence for both supermarkets and our suppliers,” chief executive of the Australian National Retailers’ Association Margy Osmond said in a statement.

On Queensland radio yesterday, Coalition communications spokesperson Malcolm Turnbull said the power of Coles and Woolworths is “without precedent anywhere else in the world”.

“The dominance that Coles and Woolies have is extraordinary.

“People used to talk about the dominance of the big banks and lack of competition in banking, but in fact, in the supermarket business the levels of concentration are so much higher than they are in the financial services,” he says.