Bunnings baulks at firmer rules around plant suppliers

Bunnings Warehouse executives have slapped down calls for the hardware giant to be included in a code of conduct aimed at major supermarkets.

The food and grocery code covers the relationships between supermarkets and suppliers.

There are calls to cast the net wider and include other retail giants.

A Bunnings Hardware store
There are calls for Bunnings to comply with the Food and Grocery Code of Conduct.

Bunnings has been accused of abusing its market power and forcing suppliers of green life products, such as plants and flowers, into unfair contracts.

Laura Gaspert, an executive at Bunnings, told a parliamentary inquiry she was saddened to hear about the experiences of some suppliers.

But she maintained the supermarket rules were not relevant to the hardware chain.

"We don't consider the food and grocery code fit for purpose with our business model," she told the inquiry on Monday.

"We consider our business very different from the supermarket business.

"If the code was extended to green life (products), we would participate in those conversations to understand if there were any implications that are relevant."

Bunnings category manager Belinda Raskers said it was in the best interest of the company to maintain its relationships with producers and she was shocked at previous evidence from plant suppliers.

"We rely purely on our suppliers over supply, and having not really strong relationships with our suppliers is of no commercial benefit for us," she said.

"We have to have really long-term, viable supplier relations here."

Woolworths and Coles
Woolworths and Coles are under pressure over their treatment of customers and suppliers.

There are growing calls to make mandatory the voluntary code of conduct.

Australian Food and Grocery Council chief executive Tanya Barden said producers and suppliers often had to deal with disparities in the supermarket industry, leaving an unequal playing field.

"The concentrated nature of food and grocery retail markets in Australia has a significant imbalance in negotiating power between the major supermarkets and suppliers," she said.

"Whereas the supplier may derive half of its revenue from one of the major supermarkets, its business will likely represent a tiny fraction of the supermarket's total revenue."

Ms Barden said major supermarkets had become "gatekeepers" for both the retail price and wholesale price offered to suppliers.

She said supermarket prices had been kept artificially low for a long period of time, before increasing costs at the check out.

"That's not healthy for suppliers, it's not healthy for consumers and that's a pattern we need to avoid in the future," she said.

Professor Allan Fels at the National Press Club (file)
Allan Fels says grocery stores who breach competition laws should be forced to divest.

Earlier, the former head of the Australian Competition and Consumer Commission, Allan Fels, said US-style divestiture laws were needed to break up supermarkets.

Professor Fels said companies found to have breached competition laws should be forced to divest.

"It's only occasionally used (in the US) but with very powerful effect and I think it would be sensible for Australia to," he said.

"It's a structure of concentration that creates a capacity to do harm to consumers and to other businesses, and on occasions, the right answer is to break up the firm."

Australia has one of the most concentrated food retail sectors in the world, with Coles and Woolworths accounting for an estimated two-thirds of the market.

The consumer watchdog is doing its own probe into the supermarket sector.

ACCC deputy chair Nick Keogh said while the watchdog had no formal position on divestiture powers, it could be used to lower supermarket prices.

"It's conceivable that divestiture could be a tool that's employed and it could be that it could force the creation of a more competitive market, which, ultimately you expect, reduce prices," he said.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store