New supermarket code of conduct

Andrew Tillett CanberraThe West Australian
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Customers should not face higher shopping bills as a result of a new deal between supermarket giants and grocery makers, consumer group Choice says.

Coles and Woolworths yesterday signed a code of conduct with the Food and Grocery Council over how they negotiate with suppliers.

The code comes amid a fierce price war between the supermarkets.

Suppliers say the two chains had been abusing their market power and unfairly squeezing their margins during negotiations.

Key parts of the voluntary code include stopping supermarkets from unilaterally changing contracts and greater transparency on allocating shelf space between house brands and name-brand products.

It also protects manufacturers intellectual property rights and implements a speedy and low cost dispute resolution process.

Small Business Minister Bruce Billson said while the code was voluntary, the Government could act if industry did not abide by its spirit.

“This code is a step in the right direction to recognise that the conduct of the big supermarkets is good for the economy, good for the suppliers and good for consumers,” Mr Billson said.

Choice spokesman Tom Godfrey said he did not believe the code would have a significant impact on prices.

“We welcome the fact that it will create a more level plating field on the supermarket shelf. Anything that ensures consumer choice is a good thing,” he said.

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