Lockdown and Employment – Centralised bargaining is the key to decent work in our food supply chain

FIRST Union has submitted to the Commerce Commission’s market study into the grocery sector, highlighting centralised wage bargaining as a key tool to constrain excess supermarket profitability and secure decent work for everyone in the supply chain.

“More competition is not the only answer to solving the problems caused by an entrenched supermarket duopoly,” said Anita Rosentreter, FIRST Union Strategic Project Coordinator.

“Suppliers to supermarkets commonly report being ‘squeezed’ by the supermarkets, but our submission to the Commission points out that this squeeze goes all the way to the bottom of the supply chain – to the hundreds of thousands of workers in the industry.”

“Constraining excess profitability can be achieved by more than encouraging new businesses into the market – it can be done by returning a greater proportion of those profits to the people who are employed by them.”

FIRST Union’s ‘Food Made Fair’ campaign focuses on workers in food supply chains and aims to make supermarkets, as the ‘economic employers’ at the top of those supply chains, more accountable for what happens to workers down the line.

“As the Food and Grocery Council’s submission notes, suppliers to supermarkets and the people who work for them are at a bargaining disadvantage in the current model, and their contribution towards record profits is not recognised in their potential to negotiate with the major brands,” said Ms Rosentreter.

FIRST Union’s submission to the Commerce Commission comes as the union movement marks the 15th anniversary of a 28-day lockout of more than 500 workers by Progressive Enterprises, who were calling for pay parity across their distribution centres. The lockout was eventually ended when an agreement was reached on pay parity and a more centralised bargaining framework, representing a major win for supermarket distribution workers nationally.

“When Progressive was bought by Woolworths in 2005, the workers hung on to this centralisation and it has led to incremental gains over the years,” said Ms Rosentreter. “We’re currently in bargaining with the company for more than 1,000 distribution workers around the country.”

“Foodstuffs, on the other hand, continues to pay much lower rates in the South Island and has no supermarket collective agreements there – this means those workers have no meaningful way of increasing their lot.”

“The systemic problems in the grocery sector and its supply chains will remain until we bolster workers’ power to influence things.”

“As a framework, Fair Pay Agreements could improve workers’ bargaining power while acting as a meaningful constraint on excessive supermarket profits – we should consider more than just direct competition between brands.”

FIRST Union’s full submission to the Commerce Commerce is available HERE.