Australia's major supermarkets’ rank based on their treatment of suppliers has been released publicly for the first time.

The results? ALDI has emerged as the top choice among suppliers, leaving behind the big four—Coles, Woolworths, and IGA-supplier Metcash.

This ranking, previously kept confidential, was released by Grocery Code Independent Reviewer Chris Leptos AO, a Treasury-appointed official responsible for assessing the performance of the Food and Grocery Code of Conduct.

The report was based on feedback from suppliers for the 2022-2023 period.

The decision to make the rankings public is a significant step towards transparency in the supermarket sector.

Grocery Code Independent Reviewer revealed the ALDI was a top choice among suppliers. Credit: Marques Thomas/Unsplash

'By publishing the rankings, I am hopeful that it will be used to stimulate a competitive “race to the top”,' Leptos wrote.

The suppliers were asked to rate the supermarkets on four aspects of their treatment—fair and reasonable dealings, clear and prompt communication, dealing in good faith, and taking prompt, constructive action to resolve issues raised.

ALDI scored highest in all categories, followed by Metcash, with Coles and Woolworths trailing behind in third and fourth place, respectively.

Interestingly, a notable 71 per cent of suppliers have reported experiencing no problems, and no formal complaint was raised about supermarkets’ treatment of suppliers last year.

The Australian Food and Grocery Code of Conduct, a voluntary code prescribed under the Competition and Consumer Act 2010, establishes an independent dispute resolution process where suppliers can take confidential complaints about their treatment to each supermarket’s independent arbiter.

However, the fear of retribution often prevents suppliers from lodging formal complaints.

Mr Leptos stated that while he ‘did not receive any requests to review a complaint handled by the Code Arbiters in the 2022-23 reporting period’, he continues ‘to receive direct approaches from suppliers where they are reluctant to formalise a complaint’.

‘The lack of formal complaints may be explained by the changes adopted by the Code Signatories—specifically, authorising their Code Arbiters to play a more proactive role in listening to supplier concerns without lodging a formal complaint,’ he continued.

One Queensland grower, who wished to remain anonymous, explained the dilemma faced by suppliers.

'The problem is if you were to make a complaint and you then lost your contract, then your business is compromised. If you lose the ability to trade with either Coles or Woolworths, then your business is not viable because of your economy of scale,’ they explained.

Shaun Jackson, the owner of a melon producer, Daintree Fresh, shared that he had conversations with ‘thousands of growers about their experience’ with the supermarkets and mentioned that ‘all of them are too scared to say anything’.

‘They’re absolutely terrified of retribution,’ he added.

The fear of damaging commercial relationships was identified as a significant impediment to raising issues with Woolworths and Coles by 41 per cent of respondents, compared to 28 per cent for Metcash and 21 per cent for ALDI.

Releasing these rankings is a significant step towards fostering greater competition within the sector.

Assistant Minister for Competition Andrew Leigh said, 'Most Australians buy their groceries at the big supermarket chains, and it’s important that those big supermarkets [do] the right thing by their suppliers. The release of these rankings is an important transparency measure that fosters greater competition within the sector. Holding big companies accountable helps encourage a race to the top.'

The report comes after several farmers and industry associations have expressed concerns about the viability of the fresh produce industry in Australia, partly blaming the conduct of the supermarkets and low wholesale prices paid to growers.

‘We’re not retailing the right price to keep the product moving and selling, plain and simple. The supermarkets are making too much profit out of our crops. We can’t survive,’ Ross Marsolino, a farmer from Victoria, claimed.

In response to the report, a Coles spokeswoman said the supermarket '[continues] to work hard to build and maintain strong, trusted relationships with our suppliers'.

‘Ongoing feedback and engagement are important to us, and we are reviewing the report closely,’ she added.

Woolworths also welcomed the report and committed to investigating and resolving supplier complaints fairly and expeditiously.

‘Our Trade Partner Complaints Integrity Policy makes our commitment clear—no supplier will experience commercial detriment as a result of raising a Grocery Code complaint with Woolworths,’ the company spokeswoman assured.

Oliver Bongardt, Managing Director of National Buying at ALDI, said in a statement that the supermarket set 'high standards when it comes to collaborating with our suppliers, and we pride ourselves on being a fair and reasonable partner to them'.

‘Seeing our values and how we do business reflected in the Independent Review is certainly heartening. We take our relationships with our partners extremely seriously because our low-price value proposition is only possible through our ongoing partnership with our extensive network of Australian suppliers,’ he stated.

Metcash is yet to release a statement.

The public ranking of supermarkets based on supplier feedback is a significant step towards transparency and accountability in the supermarket sector.

‘The government is committed to improving conduct in the supplier/retailer relations. We have commenced the 2023-24 review of the Code provisions to ensure they remain effective in fostering a vibrant and competitive food and grocery sector in Australia,’ Mr Leigh’s office stated.

Key Takeaways

• The Grocery Code Independent Reviewer has ranked Australia's big four supermarkets for the first time based on supplier feedback.
  
• ALDI was rated the best overall, followed by IGA-supplier Metcash, with Coles and Woolworths in third and fourth place, respectively.
  
• Despite this, no formal complaints were raised about supermarkets’ treatment of suppliers last year. Many fear 'retribution', with 41 per cent identifying the fear of damaging their commercial relationship as an impediment to raising issues with Coles and Woolworths.
  
• The Independent Reviewer, Chris Leptos AO, hopes the public sharing of these rankings will stimulate a 'race to the top', improving conduct amongst supermarkets. He also noted that although 71 per cent of suppliers reported no issues, he continues to receive direct approaches from those reluctant to formally complain.
  

What do you think about these rankings, members? Do you agree with the report? Let us know in the comments below.

 

[AlanQ]

needless to say a repackaged product in a house brand will always win. Aldi don't sell the original packaged product that consumers expect Coles & Woolies to stock. If you buy the majors house branded products the prices are equal to those of the repackaged products sold under Aldi's house labels.

 

[David567]

I agree that Aldie may be cheaper but in the long run they are not. YOU DON'T get a 4 cents voucher so you can get off fuel but not only that you don't get rewards points so you can use. So it all works equal.

Learn math. those extra points won't save you as much as shopping at aldi. The 4 cents fuel discount saves you around 50 cent at the pump. Aldi prices save are as much as 50%. Reward points save you less than $1 for many dollars spent. Work that out. You are a great target for scammers.

 

[David567]

needless to say a repackaged product in a house brand will always win. Aldi don't sell the original packaged product that consumers expect Coles & Woolies to stock. If you buy the majors house branded products the prices are equal to those of the repackaged products sold under Aldi's house labels.

Most of Aldi products are exactally the same products in a different pack only heaps cheaper and often larger size. I have only ever had one product from Aldi that I didn't like. Considering the price difference ALdi is still up to 50% cheaper. Woolworths home brand are much more expensive and are the worst home brand products on the market. Black and gold brand is better than Wollies. Coles are good but still much more expensive.

 

[David567]

Aldi has always been the cheapest, followed by Coles and Woolies massive markups, then IGA and Drakes are the most expensive with gigantic mark up. Those of you who say Aldi doesn't have brand name products, thin again. Most of Aldi brands are big brands packaged for Aldi. Same product, different packet. Aldi have no more imported brands than any other supermarket. So if you want to bitch about Coles and Woolies, go and shop at Aldi and see the difference at the checkout. I drive 160 km round trip to shop at Aldi and still save money. Wollies and Drakes are less than 200 meters away. So all these gimmicks and fuel discounts don't save you more than a couple of dollars. Both Coles and Wollies servo were 20 cents a litre more than Mobil and Liberty a few days ago.

 

[arthur dagger]

Learn math. those extra points won't save you as much as shopping at aldi. The 4 cents fuel discount saves you around 50 cent at the pump. Aldi prices save are as much as 50%. Reward points save you less than $1 for many dollars spent. Work that out. You are a great target for scammers.

i not sure where you buy your fuel i always save around 1 dollar and 55 cents when i always fill up

 

[arthur dagger]

Aldi has always been the cheapest, followed by Coles and Woolies massive markups, then IGA and Drakes are the most expensive with gigantic mark up. Those of you who say Aldi doesn't have brand name products, thin again. Most of Aldi brands are big brands packaged for Aldi. Same product, different packet. Aldi have no more imported brands than any other supermarket. So if you want to bitch about Coles and Woolies, go and shop at Aldi and see the difference at the checkout. I drive 160 km round trip to shop at Aldi and still save money. Wollies and Drakes are less than 200 meters away. So all these gimmicks and fuel discounts don't save you more than a couple of dollars. Both Coles and Wollies servo were 20 cents a litre more than Mobil and Liberty a few days ago.

That may be right I always fill up at Abco they are always 4 cents cheaper than any other company and my 4 cents off gives me 8 cents better off

 

[arthur dagger]

Aldi has always been the cheapest, followed by Coles and Woolies massive markups, then IGA and Drakes are the most expensive with gigantic mark up. Those of you who say Aldi doesn't have brand name products, thin again. Most of Aldi brands are big brands packaged for Aldi. Same product, different packet. Aldi have no more imported brands than any other supermarket. So if you want to bitch about Coles and Woolies, go and shop at Aldi and see the difference at the checkout. I drive 160 km round trip to shop at Aldi and still save money. Wollies and Drakes are less than 200 meters away. So all these gimmicks and fuel discounts don't save you more than a couple of dollars. Both Coles and Wollies servo were 20 cents a litre more than Mobil and Liberty a few days ago.

I don't know who you are trying to fool, driving that distance burning up fuel at the present price and wear and tear on your vehicle,

 

[mylittletibbies]

I don't know who you are trying to fool, driving that distance burning up fuel at the present price and wear and tear on your vehicle,

I drive 200kms round trip to shop as that is the nearest supermarket. I also shop at Aldi and even though fuel is so expensive I still save the petrol cost plus. There is also a.
Woolies and Coles, but if I shop there I can't cover the fuel cost.

 

[StarTrekker]

Learn math. those extra points won't save you as much as shopping at aldi. The 4 cents fuel discount saves you around 50 cent at the pump. Aldi prices save are as much as 50%. Reward points save you less than $1 for many dollars spent. Work that out. You are a great target for scammers.

I build my points up for my Christmas groceries. My Christmas is always free.