The Australian Competition and Consumer Commission is keeping a close eye on Woolworths and Aldi to make sure they are not treating their suppliers unfairly even after signing the Food and Grocery Code of Conduct.

The Code of Conduct, which prohibits certain types of unfair conduct, was drafted to redress the bargaining power imbalance that can exist between suppliers and large grocery retailers. It is expected to help offer certainty to suppliers, and contains rules about agreements, termination of agreement, payments and dispute resolution.

However, ACCC chairman Rod Sims said the main concern was that even after signing the agreement, some of the retailers have been found violating the conduct.

“The ACCC has concerns as to the manner in which some retailers, in particular Woolworths and Aldi, are presenting new Grocery Supply Agreements (GSAs), which might give the impression that the supplier is not able to negotiate the terms of the GSA,” the ACCC Chairman said.

“The ACCC is also concerned about the low level of detail provided in some GSAs about the circumstances in which certain payments may arise.”

According to available reports, Woolworths and Aldi gave their suppliers an agreement that reflected no negotiation in the payments.

When the Food and Grocery Code of Conduct was launched in March by the Federal Government, Aldi signed it first. Aldi has not commented yet on the allegations.

Besides the abovementioned retailers, Coles and About Life also signed the conduct.

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