Retailers angered by mandatory code plan

The local supermarket industry has reacted angrily to reports that the government is planning to introduce a mandatory code of conduct for the sector, according to The Australian Financial Review.

Earlier this week, reports claimed Labor was considering bolstering the powers of the Australian Competition and Consumer Commision in order to help the watchdog better police disputes between supermarkets and suppliers.

Australia's two supermarket giants, Wesfarmers Ltd-owned Coles and rival Woolworths Ltd, are facing investigations from the competition regulator following supplier complaints that the groups are misusing their market power to drive prices lower.

The government had previously announced plans to work on a voluntary code with the sector. Any mandatory code would see six months worth of work y the industry on a voluntary code wasted.

According to the newspaper, retailers fear Labor could announce a mandatory code as early as next week. 

Under such a code, the ACCC would reportedly have the power to impose sanctions on supermarkets which breached the laws without trial.

“It is the worst-case outcome that we were trying to avoid,” an industry source told the newspaper.

The government refused to confirm whether it has been working on the new code, according to The Australian.