‘Mickey mouse’: Dutton blasts grocery review

Opposition Leader Peter Dutton has slammed the Emerson review into supermarkets as a “Mickey Mouse review” that was conducted by a “Labor mate.”

On Monday, former Labor minister Craig Emerson handed down the interim findings of his review into the Grocery Code of Conduct, calling for the voluntary code to be made mandatory.

He also recommended slapping huge financial penalties on supermarkets with annual revenues above $5bn that breach the code.

Coles, Woolworths, ALDI, Metcash and their suppliers would be covered by the code.

But Mr Dutton claimed the findings and recommendations of the review were preordained, with Treasurer Jim Chalmers intervening in the process.

“You might as well have asked [former treasurer] Wayne Swan to conduct the review,” he told reporters in Brisbane

“The review was written, the results were dictated by Jim Chalmers.

“I think this is a Mickey Mouse review that’s been conducted by a Labor mate with an outcome predetermined by the treasurer.

“There’s not going to be any price relief here for consumers, because as Mr Chalmers and Mr Albanese know, their policies have directly contributed to higher prices.”

Dr Emerson dismissed Mr Dutton’s claim.

“I’m a former competition policy minister, I’m an economist, a PhD in economics, and I’m supposed to be a Labor lackey,” he said.

As politicians clashed over the proposal, Australians being hit hard at the checkout will have to wait until later in the year to find out whether the recommendations will be adopted by the Treasurer.

“The whole point of this interim report is how do we make the code tougher and more compulsory, better dispute resolution and processes and bigger penalties for people who do the wrong thing?” Dr Chalmers told reporters on Monday.

“These are the central themes of the interim report that Craig has handed … the defining motivation behind this is a fair go for farmers and families.

“The current voluntary code is too easy to walk away from and we want to change that.”

Forced divestiture off the table

But Dr Emerson did not recommend any divestiture laws in his interim report, which the Nationals and the Greens alike have been pushing for, calling them a “populist idea” which risked greater market concentration.

“Let’s say it’s Coles who gets hit by a forced divestiture. They’re going to sell to Woolworths. What does that do for market concentration?” he told ABC Radio.

“Will (they sell to) a foreign multinational? But they don’t want to come here. And so the only options will be to start closing doors.

“I just can’t see the sense of it at all … What I’m proposing is credible. And it has been checked with the ACCC, so the supermarkets would be very mindful of the legislation if the government picks this up.

“So my proposed legislation is credible, whereas I think this you know, the divestiture stuff, that was never going to happen.”

Prime Minister Anthony Albanese, who had previously described forced divestiture as something belonging in the old Soviet Union, also backed in Dr Emerson’s decision not to recommend divestiture powers.

“We need to have serious responses to what is a serious problem, rather than a populist response,” Mr Albanese told ABC radio on Monday.

Coles, Woolies weigh into competition clampdown

Woolworths says other retail giants such as Bunnings and Amazon should also face multi million-dollar fines if they fail to comply with a new mandatory code of conduct expected to be imposed on the supermarkets.

Woolworths said it supported the recommendations but argued that all large retailers and wholesalers should face penalties as they sell items that could be considered as groceries, such as household cleaning products and toiletries.

“The code should apply to all major retailers operating in Australia, including global retail giants such as Amazon and Costco, who have global revenues many times the size of Australian supermarkets, as well as to large Australia retailers such as Bunnings and Chemist Warehouse,” Woolworths said in a statement.

“Woolworths is a foundation signatory to the Food and Grocery Code of Conduct, and we support it becoming mandatory for all large retailers and wholesalers of groceries to engender public trust and to level the playing field for retailers and wholesalers alike.”

In its own statement, Coles said it backed a mandatory code and planned to “work constructively as part of the review process.”

The review also recommended any updated code should place a greater emphasis on addressing the fear of retribution.

Prices at the checkout have become a political lightning rod in recent months as MPs from all sides scramble to convince voters they have the better record on the cost of living.

Farmers have also been left frustrated that declining wholesale prices did not reflect similar price drops on the shelves.

Under the current settings, the Australian Competition and Consumer Commission does not have the power to impose penalties for noncompliance of the code.

But if Dr Emerson’s recommendations were implemented, the competition watchdog would have the power to enforce penalties for major or systemic breaches of up to $10m, 10 per cent of a supermarket’s annual turnover, or three times the benefit it gained from the breach, whichever is the greatest.

Coles and Woolies had a reported annual revenue of about $40bn, meaning a fine of 10 per cent could be a record-breaking $4bn.

It’s understood that Dr Chalmers will use a major address on Wednesday, hosted by the ACCC and the Law Council of Australia, to unveil his plans for merger reform.

The interim report will now be open for stakeholder consultation until April 26 before Dr Emerson hands back his final recommendations by the end of June.