Bunnings says it shouldn’t be included in new tough Grocery Review

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Bunnings has hit back at Woolworths over its calls to have the hardware giant swept into a regulatory crackdown on major supermarket chains.

Under proposed new rules, grocery giants must follow a mandatory industry code of conduct when dealing with suppliers, or face hefty financial penalties that could reach up to the billions of dollars.

The proposal was brought forward by former Labor minister Craig Emerson in his interim findings of his review of the code released on Monday.

Welcoming the idea of a compulsory code Woolworths argued that other large retailers including Bunnings Warehouse and pharmacy titan Chemist Warehouse should be brought in under new mandatory food and grocery rules.

“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,” a Woolworths spokesperson said on Tuesday.

However, Bunnings said it backed Dr Emerson’s view that broadening the code to include other industries could risk “unintended consequences”.

“The characteristics of the industry sector that Bunnings is a part of is both diverse and structurally different to many other sectors including pharmacy, supermarket and others,” a Bunnings spokesperson said.

“Because of this diversity, it would make the application of such a code quite difficult to apply, particularly given our commercial offer and exposure to the building and construction industry.”

Under Dr Emerson’s recommendations, supermarkets with annual revenues above $5bn including Woolworths, Coles, Aldi and Metcash, and their suppliers, would be covered under the toughened code.

Peak plant industry lobby Greenlife Industry Australia said it was disappointed the findings did not advocate for plant growers to be protected under a new code, pointing to Bunning’s 70 per cent market share of the retail horticulture sector.

“We are encouraged that Dr Emerson’s report demonstrates a good understanding of the power imbalance between growers and retailers,” GIA CEO Joanna Cave said.

“However, we are puzzled by his suggestion that Bunnings participates in a new, separate code of conduct that is voluntary.”

Dr Emerson said he would not rule out expanding the food and grocery code to include the hardware chain but resisted enforcing tougher regulations across a wider selection of businesses.

“I’ll have a chat with Bunnings about nursery products, which are actually groceries, by the way, and they are the dominant purchaser of nursery products,” Dr Emerson said on Tuesday.

“So I’m not saying no, but let’s do it properly and calmly rather than just have this big wide net thrown over.”

The interim report will be open for consultation until April 26, before Dr Emerson submits his final recommendations at the end of June.

It comes as the chief executives of Woolworths and Coles prepare to front a Greens-led senate inquiry into grocery prices next week.

The inquiry will interrogate allegations of price gouging after Coles and Woolworths recorded annual profits of more than $1bn last year, while household spending on food reached record highs.

Both Coles and Woolworths have denied allegations of price gouging and claimed that higher production costs have led to higher store prices.

“They’ll have to answer for price gouging shoppers and putting the squeeze on farmers,” Greens economic justice spokesman and committee chair Senator Nick McKim said. “They’ll have to explain how they are raking in billions in profits while millions of Australians are struggling to put food on the table.”Coles chief executive officer Leah Weckert and Woolworths boss Brad Banducci are both listed to appear before the inquiry next week.

Read related topics:BunningsWoolworths

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