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Review of the Retail Grocery Industry Code of Conduct
NATIONAL
It has been 10 years since the introduction of the Retail Grocery Industry (Unit Pricing) Code of Conduct.
As a consequence, the Australian Government Treasury has been conducting a 10-year review into Unit Pricing – how it has been working, can it be improved, and should it be widened to capture hardware items for example?
MGA has worked closely with Treasury in consultancy forums to provide its feedback, comments and views on the effectiveness of the “the Code” in light of the sunsetting clause stipulated in Part 4 of Chapter 3 of the Legislation Act 2003 (Cth) and has lodged a detailed submission supporting “no change” to the current “Unit Pricing” structure we are all now operating under.
The original intent of the Retail Grocery Unit Pricing Code was to assist consumers deciding at supermarket floor level, in front of a shelf, what is the best value for a food or grocery item according to the grocery budget they were operating within. Owing to the many various pack sizes it was decided to introduce a unit pricing system that breaks down each product into units such as grams or litres.
We believe that the customers of our members now rely on unit pricing as a comparison and convenient tool, which to date has aided consumers. Our members are of the view that the Code allowed and continues to allow shoppers to undertake educated decisions during their shopping experience, particularly since prices alone do not provide customers with adequate information about value for money.
MGA has submitted that Unit Pricing provides a platform for our members to demonstrate how the Code and its ability in assisting consumers compare different products, brands and sizes has benefited not only the customers but also the businesses.
MGA surveyed members nationally to obtain verbatim feedback from them about the impact of unit pricing on their businesses. The commentary received indicated that our members did not see noteworthy impact on their business through the use of the Code, whilst others reported many advantages that stemmed from the Code’s application.
Through our research, we managed to obtain a harmonious view that the Code should continue to operate beyond the 10-year sunsetting clause.
However, MGA has caveats as to the renewal of the Code, which it has highlighted in its submission, just to ensure that the Code, if amended, remains fit-for-purpose and prescriptive, relevant to our members and necessary enough to protect them, without imposing overly burdensome obligations.
MGA’s submission commentary addressed the following “Unit Pricing” elements; Effectiveness of the code, The market structure, Display requirements, Alternative units of measurement, 1000 square metres requirement, Exemptions to the Code and Minimum Range of Grocery Items and Exemptions.
It is strongly evident that the majority of our members and their customers are currently enjoying the benefits of the Code as is.
Treasury is considering to further expand the scope of the Code to hardware items; however, MGA submits that an expansion would overly complicate the Code’s application and would result in many difficulties arising, which include: increase of non-compliance, overuse of the ACCC to deal with consumers issues, upsurge in complaints, overheads and financial costs on businesses and confusion to shoppers.
MGA is confident that the present Code is fit for its purpose as it has achieved its objective. The Code has operated well since it was implemented back in 2008, which is evidenced by the minimal issues that surfaced from its application. As such, change is unwarranted to something that is operating perfectly well, and the Code should be extended to operate.
MGA looks forward to working alongside Treasury to further educate its members as to the Code and its associated benefits.
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