Supermarkets, suppliers at odds

Nearly a year since negotiations began between supermarket giants Coles and Woolworths and their grocery suppliers over a code of conduct to prevent supermarkets from abusing their market value, the two sides remain months away from reaching an agreement, according to The Australian.

The two sides are scheduled to launch a fresh round of negotiations next month. However, the issue of private-label groceries that are increasingly replacing branded products remains a thorny point of contention.

The Australian Food and Grocery Council, which represents suppliers, has been pushing for retailers to establish separate buying teams for private-label products to prevent supermarkets from easily copying any new products with their own knock-off versions, The Australian reported.

However, the supermarkets claim such a system would prove too costly.

The recent change in Labor leadership has also slowed the process, as both sides await signs of any shifting political agenda for Prime Minister Kevin Rudd, his new agriculture minister, Joel Fitzgibbon and newly-appointed Industry Minister Kim Carr.