SUBJECTS: ACCC; FOOD AND GROCERY CODE; DIVESTITURE; FOOD RELIEF CHARITIES
ROSS SOLLY (HOST): Doctor Andrew Leigh is the Assistant Minister for Competition and joins us this afternoon. Doctor Leigh, thank you for your time.
ANDREW LEIGH: Pleasure, Ross. Great to be with you.
SOLLY: So, the ACCC obviously believes that Woolworths and Coles have been acting in a pretty unscrupulous fashion. What's your reaction to it, to its findings today?
LEIGH: Well, they're just extraordinary allegations that are being made here, Ross. I mean, suggestions that involve some 266 Woolworths products and 245 Coles products. And to give your listeners some flavour of what the ACCC is alleging, they give an example in their media release of Oreos, which were being sold at Woolworths for $3.50 and then Woolworths increased the price to $5 for a very short period, put it back down to $4.50 and advertised them with a ‘prices dropped’ promotion. That doesn't seem like a reasonable special to me. The allegation that is being made by the ACCC is that this was misleading consumers. Obviously, when I wouldn't comment on the specifics of the allegation, but if they're proven, then this would be pretty outrageous for the many Australians who shop at Coles and Woolies and would have spent millions of dollars collectively on these products.
SOLLY: Yeah, we had David Littleproud on just before the news headlines, Andrew Leigh, and he's very concerned about a couple of things. One is he doesn't think that the penalties your party has put in place are anywhere near enough. He was saying that apparently $187,000 is about the biggest you can penalise. Surely, if what you're saying and if these allegations are correct with the Oreos example, $187,000 is really not enough, is that to send a message
LEIGH: Well David's completely wrong on that. In this case, the penalties would go up to $10 million, 3 times the ill-gotten gains or 10 per cent of turnover. Those penalties are higher because Labor increased them after we came to office. One of the first bills we passed was to increase the penalties for anti competitive conduct because we felt they had been too low under the Liberal-National government, of which David Littleproud had been a part. The ACCC's media release specifically refers to the fact that higher penalties apply for the latter part of the contravention period because that's the period where Labor had increased the penalties.
SOLLY: And so are those penalties in place now? Because David Littleproud also said you need to bring forward the start date for some of those penalties.
LEIGH: Yeah. So, what David Littleproud is talking about there is the Food and Grocery code of conduct. Under his government, it was a voluntary code, a toothless code. His government then reviewed it and said it should stay a voluntary code. Labor takes a different view. We think it needs to be a mandatory code. Craig Emerson's review recommended that. We're now acting to put that into place.
SOLLY: So off the back of this announcement today, do you think that you could bring it in a bit sooner than originally planned?
LEIGH: Well, let's be clear about what the food and grocery code of conduct does. It's not about the consumer conduct which is being alleged by the ACCC today. It's about the relationship between the supermarkets and their suppliers. We want families and farmers to get a better deal. And so what we've done with the raising the penalties goes to how it's affects families. What we've done with the food and grocery code goes to the impact on farmers.
SOLLY: Yeah, but there's no reason why you can't bring that forward. Andrew Leigh is there, even if it's, I mean obviously from what we're hearing, if the ACCC is right here, it's time for the big stick to come out, isn't it? No, I mean this kicking around a few problems here and there, this is no longer the case. I mean is it time now to review this and say okay, let's not give it another twelve months, let's bring in these penalties as well and the tougher mandates.
LEIGH: We're doing exactly that, Ross.
SOLLY: So you are bringing it forward? You are going to bring it forward?
LEIGH: We are out consulting on the specifics of the food and grocery code. So, that's the announcement that we've made today. Getting on with the job.
SOLLY: Sorry can I just check though? Can I just check though? Doctor Andrew Leigh, are you saying that there is the prospect that you may bring its introduction forward, the food and grocery code?
LEIGH: Its introduction is happening at pace, Ross. What we do with these things is we engage constructively, and we give people a chance to comment on the exposure draft. We're going through that process. That's important in this context, but we are getting it done. After nine years of Liberal inaction.
SOLLY: David Littleproud also talked about divestiture and this has been a discussion for some time. Is it time to revisit the powers that exist in that area?
LEIGH: Look, we don't think that that's going to make a difference for shoppers. When you look around the world, some countries have divestiture, others don't. But it's a power that is very rarely used. The focus we have right now is on measures that will make a difference, and raising those penalties.
SOLLY: It does seem. It does seem, though, and Doctor Andrew Leigh, I need to flag a conflict of interest here. I love Oreos, so I do have a serious conflict of interest here.
LEIGH: Well that's not a conflict of interest Ross, you want them as cheap as possible!
SOLLY: Well I do want them as cheap as possible, but I don't want people to think I'm jumping up and down just because I'm annoyed how much I'm paying for my Oreos. But it does seem, from what you've told us and from what the ACCC has been saying, that Woolworths and Coles have been taking us all for fools and they've been snubbing our nose and no matter what penalties you might wave at them, they don't seem to be taking too much notice of it. So, is it now time to look at divestiture as a way to really focus their minds on giving consumers and producers the best possible outcomes?
LEIGH: Ross, I share the frustration at the major supermarket chains. What we're focusing on is measures that will make a difference. Higher penalties. We've got the ACCC doing a deep dive into supermarkets for us, and that interim report will be released shortly. We've put in place a designated complaint system so selected consumer and small business groups can make fast track complaints to the ACCC. And very soon we're going to be announcing the second round of the CHOICE quarterly grocery price monitoring that enables people to see where they can get the best deal at the supermarket. That shadow shopper exercise funded by government is absolutely critical in putting competitive pressure on the supermarket.
SOLLY: So, Andrew Leigh, are you telling listeners tonight, who are probably feeling a bit jaded now and thinking they've been ripped off when they've been doing the shopping now for quite some time, are you promising listeners tonight that you have the tricks in place, the measurements in place to stop this happening again? Because there are some saying, well, it's time the biggest stick was taken to Coles and Woolworths.
LEIGH: We're working on all fronts, Ross. So, competition is a huge issue for our government and supermarket competition has been at the heart of it. We've got the ACCC work, we've got the food and grocery code work, we've got CHOICE working here. After nine years in which the Liberals did nothing for families and nothing for farmers, we are stepping up to ensure that Australia has more dynamism, more competition, and that people get a better deal at the checkout.
SOLLY: Can I ask you what you think about the ACCC suggesting that Woolworths and Coles fund a registered charity to deliver meals to Australians in need? What do you think about that Doctor Andrew Leigh.
LEIGH: Well, I've already got collaborations with organisations such as Second Bite and OzHarvest. I think that's appropriate. You don't want food products to go to waste. That work is pretty well advanced and ensures that food waste is being reduced. But there's always more that can be done. I know when I speak to my local food pantries that they're frustrated that they're dealing not only with people on income support, but also with what they describe as the ‘working poor’. They're feeling the pressure, which is why we stepped up to provide increased funding as a government to the food relief charities earlier this year.
SOLLY: Andrew Leigh we'll need to leave it there. Thank you. And on your way home tonight, Dr. Andrew Leigh, grab yourself a packet of Oreos just to celebrate.
LEIGH: I'll see if I can get them on special.
SOLLY: Yeah, good luck. $4.50 a packet. Thanks Andrew Leigh.