ACCC grants urgent interim authorisation to Coles

Last week the ACCC granted an urgent interim authorisation to Coles to coordinate its activities with other supermarkets for the broad purpose of ensuring the fair and equitable distribution of retail products to consumers during the COVID-19 pandemic.

Authorisation allows parties to engage in conduct that would otherwise contravene competition law on the basis that the public benefits of the conduct outweigh the public detriments.

What does the authorisation allow the supermarkets to do?

Subject to each party filing a similar application, the authorisation will allow supermarkets to discuss, enter or implement any arrangement or engage in any conduct for the purpose of:

• Facilitating or ensuring the acquisition or supply of retail products, especially those in short supply;
• Ensuring fairer access to retail products among the general public;
• Providing greater access to retail products for those most in need; and
• Facilitating access to retail products in remote or rural areas.

The authorisation will also allow supermarkets to agree upon arrangements with manufacturers, suppliers and transport & logistics providers.  The authorisation however will not allow the supermarkets to agree on retail prices or service levels. 

The authorisation will be in force for 6 months unless revoked by the ACCC on an earlier date and the conduct that is the subject of the authorisation is not compulsory for supermarkets.

What is the impact on suppliers?

We anticipate that the authorisation will be beneficial for suppliers in that it will seek to maximise the supply and distribution of products across Australia in an efficient manner at a time when demand is higher than usual.

We expect to see supermarkets seeking better wholesale prices from suppliers while at the same time not running as many or as deep promotions.

Suppliers however, are not compelled to agree to any arrangements or conduct put to them by the supermarkets.  In addition, the usual provisions of competition and consumer laws will continue to apply including the operation of the Food and Grocery Code. 

The ACCC will also soon be seeking feedback on the supermarket authorisation.