Supermarkets ordered to play by new rules

Tonight, the most common reminder of the cost of living is in for change with a new mandatory code of conduct. It's about ensuring that the big supermarket chains do the right thing by their suppliers and also by their customers, because it'll have the strongest penalties of any code of conduct. In Australia, penalties can be up to 10% of the previous year's turnover. For Coles, that's $2.6 billion, for Woolworths, 4.8 billion. Let's have a good look at it in 12 months time to see whether or not it's actually working, but I've got a feeling they're going to have to put their foot down on them more, to be honest. In a statement, Coles says we remain committed to supporting a healthy and sustainable grocery sector. Woolworths saying we firmly believe healthy retailer and supplier relationships are key to the continued success of our sector, as well as serving the needs of millions of customers. For too long we've seen supermarket chains take advantage of suppliers. Other changes include an anonymous whistleblower hotline for the consumer watchdog, Focus on Outcomes for fresh producers and new formal dispute resolutions making it easier for farmers and growers. What it really means is that the supermarkets will need to treat their suppliers respectfully. The plan will go to Parliament this year with preliminary support from the opposition. The Greens still want the big two supermarkets broken up. If they wanted to bring down food and grocery prices is they could vote for our divestiture bill to see significant changes in price. Consumer groups point to the need for more competition, not fewer. Coles and Woolies hoping to turn the big two into a big few or even more. Charles Croucher, 9 News.