Supermarkets could be forced into a mandatory code of conduct for all fresh farm produce under a federal push to stamp out market imbalance.
The competition watchdog has been directed to investigate beef, lamb, pork, chicken, egg, seafood, fruit and vegetable supply chains.
The Australian Competition and Consumer Commission (ACCC) will also look at whether the mandatory dairy code of conduct should be extended to supermarkets.
Farmers and processors will be able to give confidential evidence to the ACCC, which is tasked with sniffing out potential market imbalance.
“After continual evidence and claims by farmers that they have been mistreated by the processing sector and the supermarkets, it’s time for us to clear that up,” he told reporters in Canberra on Aug. 26.
There have been numerous inquiries into issues across agricultural supply chains over the past decade.
Littleproud said Senate committees and the ACCC had heard evidence of supermarkets abusing power over farmers.
“The big supermarkets have used their market power to get them into contracts and then pull them out from under their nose after they’ve made significant investments,” he said.
“Capital investments that have then sent them broke.”
A Woolworths spokesman said the company would co-operate fully with the latest probe.
“There is already a strong legal and regulatory framework in place to monitor the conduct of participants in the fresh food supply chain,” he told AAP.
“We’re a founding signatory to the food and grocery code, which governs our dealings with more than 18,000 suppliers, including Australian fresh food providers.”
The ACCC also has a dedicated agriculture unit to monitor and enforce fair trading rules under competition law.
Littleproud—a frequent antagonist towards major supermarkets—said he couldn’t care less what the big players thought of the inquiry.
“Supermarkets are big enough and ugly enough to look after themselves,” he said.
“They are the ones that created this culture, particularly in the dairy industry, destroying lives and livelihoods of so many dairy farmers across this country with this dollar-litre milk stuff.”
He said the existing grocery code, which Coles, Woolworths and Aldi are part of, was voluntary and only dished out small fines.
“It doesn’t protect small family farms. They don’t have the financial means if they have been wronged to test that in a court of law,” Littleproud said.
Matt Coughlan in Canberra