Supermarket giants Woolworths and Aldi have earned a public warning from the competition regulator over the terms of new agreements they are offering to food and grocery suppliers.
But Woolworths has hit back, slamming the regulator for going public in what is shaping as the first test of a voluntary code of conduct governing how Australia's big supermarkets deal with their smaller suppliers.
"We had a lot of requests from suppliers to make a public announcement, I guess to improve their bargaining power and also to explain to suppliers that they don't have to sign these agreements," Australian Competition and Consumer Commission chairman Rod Sims told AAP.
Mr Sims has announced an investigation into complaints the retailers are presenting suppliers with agreements that restrict negotiations and don't specify when suppliers must make payments for stock lost on supermarket premises.
He said the ACCC had received numerous complaints from suppliers and their representatives about Grocery Supply Agreements (GSAs) presented by Woolworths and Aldi since the new code of conduct took effect in July.
One set of concerns centre on the agreements appearing to be a "take it or leave it" offer, while the code requires supermarkets to negotiate.
More concerns were raised about agreements not making clear when suppliers would be asked to pay for stock losses that occurred in the supermarkets - a practice banned under the code unless both parties opt out of the prohibition.
Woolworths said it was "surprised and disappointed" at the ACCC issuing a press release about its investigation, saying the regulator had failed to recognise steps already taken to address supplier concerns.
"The ACCC only raised additional, new concerns with us late yesterday, just hours before contacting the media," the retailer said in a statement.
Woolworths said a "minor wording issue" in letters to suppliers had been misunderstood to mean there could be no negotiation of GSAs and that it had written again to suppliers to clarify.
A Woolworths spokesman said the supermarket's new GSAs only sought payments for "supplier-related" stock wastage or breakage caused during transport to the store.
Aldi Australia released a statement saying it would respond to the ACCC's claims in due course.
Woolworths, Aldi, Coles and organic food retailer About Life have signed up to the voluntary code of conduct for the food and grocery industry, which was implemented after the ACCC began investigating alleged abuses of market power by major supermarkets in 2013.
The Australian Food and Grocery Council, which represents manufacturers, believes the ACCC investigation is a sign the voluntary code is working.
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