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Aldi risks fines of up to £600m in Australian crackdown on supermarkets

aldi
aldi

Aldi faces the threat of fines of up to £600m in Australia as the country’s Left-wing government mounts a clampdown on supermarkets.

Australian officials are pushing to introduce a mandatory code of conduct for supermarkets amid growing anger at rising prices. Companies risk being hit with stringent financial penalties if they violate the code, the government said.

The crackdown comes as Australia’s ruling Left-of-centre Labor party, led by prime minister Anthony Albanese, faces pressure to help ease the burden of inflation on households.

A recent review of the Australian supermarket sector found the current voluntary code meant to be followed by retailers was “failing to address the imbalance of bargaining power between supermarkets and their suppliers, including farmers”, Australian federal treasurer Jim Chalmers said.

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Retailers that are found to have seriously violated the code could face fines ranging from A$10m (£5.3m) to as much as 10pc of their turnover in the latest year.

Australian prime minister Anthony Albanese
Australian prime minister Anthony Albanese has faced pressure to control food inflation since coming to power in 2022 - Lukas Coch/Pool via Reuters

Aldi’s annual revenues in Australia have been reported to be as high as A$12bn per year. However the discounter is still small in the country when compared with the retailers Coles and Woolworths, which together comprise around 65pc of the Australian grocery market.

Mr Chalmers said: “This is about getting a fair go for families and a fair go for farmers. Our efforts will help to ensure our supermarkets are as competitive as they can be so Australians get the best prices possible.”

As is the case in many countries across the world, supermarket prices in Australia have soared over recent years, while high interest rates have heaped further pressure on households’ spending.

However, Australian farmers have claimed they are not seeing any benefit from higher prices. This has fuelled accusations of price-gouging on the part of the country’s supermarkets, which have broadly been denied.

The move in Australia echoes mounting scrutiny of the UK’s supermarkets over the last few years amid spiralling grocery prices. It sparked an investigation from the competition watchdog into whether supermarkets were profiteering during the cost of living crisis.

Britain’s Competition & Markets Authority (CMA) eventually cleared the supermarkets of profiteering. Big food manufacturers, too, have faced questions over their profits at a time when consumers are struggling.

British supermarkets have also come under fire from farmers, who have claimed they cannot get a fair deal in their dealings with them.

Earlier this year, a coalition of farmers, producers and celebrities accused the biggest UK supermarkets of “imbalanced, short term and wasteful” practices they claimed have left many farmers struggling to get by.

Aldi was approached for comment.

Woolworths said in a statement it would support a mandatory code, but added: “While there is broad support for greater price transparency in the sector, there isn’t yet consensus on how to deliver it.”

A Coles spokesman said the retailer was “committed to supporting a healthy and sustainable grocery sector”.