Bunnings rejects calls to be included in grocery code

In its response to Emerson’s interim report, Woolworths argued that the code, if made mandatory, should apply to “all large retailers and wholesalers of groceries” in Australia, naming Costco, online giant Amazon, Chemist Warehouse and Bunnings as retailers that should become signatories.

“The Australian retail grocery market is now undeniably broader than what has traditionally been defined as supermarkets,” the $39.5 billion supermarket giant said in its submission to Emerson’s review.

As cost-of-living pressures eat into household budgets, Bunnings has recently expanded its pet and cleaning ranges as customers bulk-buy items to save money.

Schneider said that the code should be assessed through an “industry lens” rather than by product, pointing out that supermarkets might, from time to time, sell power tools.

“Businesses will dabble in adjacent categories, either periodically or build those out, but that doesn’t make us a supermarket, and that’s a fundamental difference.”

For the first half of the 2024 financial year, Bunnings’ revenue increased 1.7 per cent in the period, with online sales rising 5.1 per cent. Its annual revenue exceeded $18.5 billion in fiscal 2023.

Bunnings accused of abusing market power

Meanwhile, Greenlife Industry Australia (GIA) chief executive Joanna Cave said Bunnings abused its market dominance by applying “very subtle” and “manipulative” pressure on growers by dictating prices, requesting changes at short notice and reserving the right not to purchase if they did not comply.

“It seems ludicrous that Bunnings would sit outside the code and not be subject to any of the rules,” said Cave, who argued that the big box retailer had more in common with major supermarkets than local garden centres.

Plants, gardening equipment and flowers are covered under the food and grocery code of conduct. Mitre 10, which is operated by Metcash, falls under the code. Metcash’s market capitalisation is $4.3 billion, while Bunnings parent company Wesfarmers has a market capitalisation of $76.2 billion.

“They’re getting a completely free pass … We say the code fixes that in one stroke of the pen,” said Cave, who wants Bunnings to be subject to the same steep penalties supermarkets would face for code breaches.

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Cave said Bunnings’ market dominance created a power imbalance in its relationship with plant suppliers and growers, who feel pressured to acquiesce to commercial terms where the hardware giant had reserved the right not to purchase any plants.

Growers also felt pressured to sell plants at unsustainable prices or risk losing Bunnings as a customer, said Cave.