Mandatory industry codes: from baseline standards to targeted regulatory intervention

While industry codes have long formed part of Australia’s regulatory landscape, whether as industry-led voluntary initiatives or mandatory codes enforceable by the Australian Competition and Consumer Commission (ACCC), their prevalence and regulatory significance have increased markedly over time.

A pattern of regulatory intervention and escalation

In recent years, scrutiny of market conduct has become an increasing priority for governments and regulators, reflected in a growing number of targeted inquiries, reviews and investigations. With this heightened scrutiny, regulatory intervention often follows findings of structural issues within a market. In some cases, this results in the immediate introduction of a mandatory code. However, often an industry-led initiative or voluntary code has been adopted as the initial response.

Voluntary codes tend to reflect a softer, more co-operative regulatory approach. They attempt to improve conduct while preserving flexibility and avoiding prescriptive regulation. Unlike mandatory codes, participation is optional and the drafting of a voluntary code is typically industry led. By contrast, mandatory codes are government-driven and binding on industry participants, with the ACCC empowered under the CCA to take enforcement action in the event they are breached.

It is against this backdrop that we have seen an emerging trend. Where voluntary codes fail to shift entrenched behaviour, the regulatory response has increasingly been to prescribe a mandatory code under the CCA. By converting voluntary industry expectations into enforceable law, the ACCC is empowered with a clearer basis to oversee conduct, investigate practices and the right to bring enforcement action, which is often underpinned by significant penalties designed to serve as a strong incentive for compliance.

From voluntary to mandatory: recent examples

The Food and Grocery Code,[1] Dairy Code,[2] and most recently, the proposed Winegrape Purchases Code[3] illustrate this trajectory in practice.

The Food and Grocery Code of Conduct, introduced as a voluntary regime in 2015, was converted into a mandatory code for large grocery retailers in 2025 following the Government’s acceptance of economist Dr Craig Emerson’s independent review. The review concluded that the voluntary model had not adequately addressed systemic issues in supplier dealings, including concerns about retribution, and that stronger, enforceable obligations were required to change behaviour.  The transition to a mandatory code marked a regulatory escalation, with ineffective self-regulation giving way to a more prescriptive framework underpinned by substantial penalties and enforcement powers.

A similar pattern can be observed in the dairy sector. A voluntary code developed by the Australian Dairy Industry Council was introduced in 2017 in response to the 2016 milk price “step-downs” in an attempt to address concerns regarding pricing practices and bargaining power in the supply chain. However, after further inquiry by the ACCC confirmed ongoing deficiencies, a mandatory code was implemented and commenced on 1 January 2020, bringing the previous obligations within a statutory framework.

More recently, the proposed mandatory Winegrape Purchases Code represents the latest example of this trend. Announced in December 2025 following another review by Dr Emerson, the code will replace the existing voluntary code and is intended to impose enforceable obligations, addressing pricing certainty, contracting practices and growers’ negotiating position.

How mandatory codes operate in practice

Mandatory codes set enforceable standards of conduct for participants in a sector. They commonly require parties to enter into written agreements and prescribe minimum contractual content. They typically impose good faith obligations, constrain unilateral or retrospective contractual changes and require the transparent disclosure of key commercial information, particularly pricing. Many also establish structured dispute resolution processes, such as mediation or arbitration.

Importantly, these regimes are directed not only at clear instances of misconduct, but at the everyday operation of commercial relationships. They shape how parties negotiate, contract, set prices and manage disputes, particularly in supply chains where one party has structural leverage over another.

The ACCC’s increasing emphasis on enforcement reinforces this shift in regulatory approach with civil penalties attaching to non-compliance in many cases. In the last two months alone, the ACCC has issued:

• five infringement notices under the Horticulture Code totalling $99,000 to two Western Australian produce companies;[4] and
• two infringement notices under the Dairy Code totalling $39,000 to each of Coles and Brownes Dairy[5].

This is a mere snapshot of the steady stream of enforcement activity from the ACCC to enforce mandatory codes in recent years. Suffice to say, mandatory codes are far from a “set and forget” regulatory tool. Rather, the ACCC constantly monitors compliance and won’t hesitate to act where it identifies breaches.

Implications for business

Mandatory industry codes should no longer be viewed as peripheral compliance instruments. They are a form of targeted, sector-specific regulation that can materially reshape how commercial relationships are managed.

For businesses in sectors not currently regulated by a mandatory code, but characterised by concentrated buying power, supplier dependence, limited alternatives or ongoing concerns about transparency, the risk of regulatory intervention is high. The question is whether existing practices – particularly in contracting, pricing, disclosure and negotiation – would withstand scrutiny if the government determined that market dynamics or voluntary arrangements were no longer delivering fair outcomes.

For businesses operating in sectors already regulated by a mandatory code, ongoing vigilance in complying with code requirements will be essential. The ACCC’s active oversight and sustained enforcement activity mean that compliance is not a one-off exercise, but a continuing obligation with real exposure to enforcement action and the significant financial and reputational consequences that may follow.