Woolworths' Ethical Dilemma: Farmers, Policies, and Solutions

This report provides an in-depth analysis of the ethical challenges faced by Woolworths, Australia's largest supermarket chain. The primary focus is on the ethical issues related to the pricing of milk and its impact on farmers. The report highlights the farmers' concerns about receiving inadequate payments for their milk, despite Woolworths' high profits. It examines the policies Woolworths has implemented to address these issues, including corporate governance, bribery and corruption prevention, labor rights, and working conditions. The report details how Woolworths addressed the farmer's concerns through meetings and negotiations, ultimately reaching an agreement on fair pricing. Furthermore, the report recommends that Woolworths consider implementing incentives and involving stakeholders in price-setting decisions to ensure ethical practices and sustainable relationships with suppliers. The report concludes by emphasizing the importance of updating ethical policies to align with changing standards and legal requirements to maintain a strong and ethical business model.

woolworths
Contemporary issues in accounting

Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................3
Ethical issue in Woolworths related to farmers.....................................................................................3
Policies for ethics in Woolworths..........................................................................................................4
How Woolworths deal with unethical issue related to farmers............................................................5
Conclusion and recommendation..........................................................................................................5
References.............................................................................................................................................7

Executive Summary
The report focuses on the ethical issue faced by the Woolworths. The ethical issue was
related to the farmers. Farmers do all the supply of the milk in Woolworths. The farmers of
Woolworths identified that they are making less payment for their milk. It is regarded as
unethical practice towards the suppliers by not giving fair payment to them. After discussion
with the farmers and management in a meeting, conclusion is drawn by making a fair
payment to them. In addition, report also focuses on the ethical practices of the Woolworths
that are made for workers, customers, as well as suppliers. The firm ensures all these
practices in the firm so that it can fulfil the corporate responsibility towards the society as
well government.

Introduction
Woolworths is a supermarket chain. It is Australia’s biggest chain that operates 995 stores
across Australia. It has approx 115,000 team members in its stores, support offices, and
distribution centres. These provide better superior services to customers in terms of value,
range, and convenience (McCauley, 2016). In spite of its better performance in the market, it
has faced ethical issue related to the farmers. In the first section of the report, discussion is
carried on the ethical issue that Woolworths has faced related to farmers. It is required by the
firms to take some measures in order to address the ethical issue. Woolworths has conducted
a meeting to solve the ethical issue that is being discussed in the report. The discussion
continues by explaining the ethical policies of the firm.
Ethical issue in Woolworths related to farmers
Woolworth’s supermarket sales good quality of milk that is takes from various farmers. In
order to solve the problem, all the farmers took an initiative to come together and sale good
quality of milk to Woolworths. This initiative was started in 2013 from the Manning valley in
NSW. These farmers were facing pricing issue from Woolworths. The big supermarkets due
to their greater bargaining power were paying less prices to the processors (Feigin and Lior,
2010).
In 2017, all the suppliers of the milk asked Woolworths to pay sufficient amount for their
milk. Woolworths were taking the milk in lower prices from those farmers and selling it in
higher prices. An inquiry done by dairy giant named Murray Goulburn stated that
Woolworths is selling milk for $1 and they are not paying even half amount to those farmers
(Smith et al, 2011). In a meeting between those farmers and Woolworths, Woolworths stated
that there are many costs added after purchasing milk from suppliers such as purifying,
packaging. Increment in retail prices of milk helped the Woolworths to earn higher profits
and those profits were not making difference in the pay of those struggling famers (Klikauer.
2011, ). A report published by Jenkins, stated that there is huge power that retailers have.
However, there is unequal balance between power of processor and retailer.
In addition to this, due to the higher prices of milk, Dianne and her husband purchase more
cows for the sake of earning more money. Besides this, they have also purchased another
farm of their neighbour (Burns, 2013).This farmer has stated that it is unethical that company

has done. However, firm was not paying according to the efforts that are being put by the
farmer.
Policies for ethics in Woolworths
Woolworths has made several policies to ensure ethical practices in its business. The aim of
Woolworths is to provide best quality products to its customer and value their spending. It is
committed to provide fair working conditions, safeguarding human rights as well as
protecting the environment. According to expectation of its customers, community as well
requirement of law, it always operates by keeping these into mind.
In the sustainability report of the Woolworths, ethical sourcing policies are discussed. In this
process, it has benchmarked its approach against the global retailers, consumer insights by
considering the current and upcoming legislation regarding limpidity in supply chain.
Woolworths also operates in alcohol by taking ethical responsibilities in consideration. It has
made strict rules for serving alcohol. In order to keep the young people safe, it has made a
policy for all the hotels. In this policy, it is make sure to all the hotels and its liquor outlets
that after checking the ID of the people alcohol will be served. Corporate governance is the
core aspect of the Woolworths in order to enhance the shareholder’s value and protect the
shareholder’s fund. It has made several ethical policies. The first ethical policy of
Woolworths is made for Bribery and corruption to ensure that the suppliers are free from any
kind of corruption and bribery. It assures the suppliers to not make any false records in their
documents (Grill, 2012). Taking into consideration the labour rights, Woolworths has
provided the labour to choose employment freely. There is no bonded, forced, and
spontaneous prison labour. Employers are free to leave the job after giving a reasonable
notice to the respective person. Freedom of associations as well as right of collective
bargaining is respected under the ethical policy of Woolworths. Workers without any kind of
distinction have the free right to form and join the trade union based on their own choice and
bargaining collectively. Representatives of workers do not face discrimination and have
access to every representative to carry out their demonstrative function at the workplace
(Kamal et al, 2015). Even when the rights of collective bargaining are restricted under the
law, Woolworths do not hinder the means of bargaining and free association for its
employees. Coming to the next ethical policy, it is made for the working conditions. In this
policy, safe as well as hygienic conditions are provided to workers by taking respective
measures to prevent the injuries and accidents in the working environment. In addition, health

and safety training is provided for those workers he has reassigned the work to some other
department (Woolworths, 2017). All these policies ensure the Woolworths to grow its
business further in the future by taking care of all the stakeholders in its business.
How Woolworths deal with unethical issue related to farmers
In order to address his issue, it has conducted a meeting between unions of farmers and its
management. In this meeting, problems of farmers are discussed with the management of
Woolworths. The conclusion is drawn by deciding the fair price for those farmers so that
ethical issue can be resolve. The fair price is decided by taking the both parties in
consideration. The ethical issue has been taken into consideration in order to keep the
suppliers delighted from the firm (Knox, 2015). In addition to this, Woolworths has signed
the long agreement in order to provide long-term certainty of their business. it allows them to
invest extra in their business. Milk is one of the valuable product in the Woolworths so in
order to keep this in mind, it has resolved the ethical issue that the farmers was facing. These
two actions helped the Woolworths to build a long-term relationship with the farmers of
Australia (Cohen, 2013).
Conclusion and recommendation
In the limelight of above discussion, it is concluded that Woolworths is a largest supermarket
chain who is growing well in the Australia. It has varied stores in the Australia due to which
it is growing well. It has faced an ethical issue related to the farmers. The issue was related to
the prices of milk products of the farmers. Farmers were feeling that the Woolworths is
paying less prices to them in spite of their various efforts made for the firm. When the
inflation arises in the market, it started selling it at the higher prices but not paying them
satisfactory amount for that. In order to address the issue, Woolworths has initiated a meeting
to solve the meeting. In this meeting, conclusion is drawn by reaching to the fair price that is
suitable to both. By taking this approach, Woolworths has solved the issue. The firm has
various ethical policies made for the workers, suppliers. It is taken to safeguard the interest of
customers as well for providing safe working conditions to employees. It has made a separate
policy for the supplier so that they do not get indulge in bribery and any misconduct.
It is recommended that Woolworths can start providing some sort of incentives when the
sales milk grown up in the supermarket. Woolworths can address the ethical issues by taking
some innovative approach for the problem (Lewis, Tania and Michele, 2016). From the next

time when prices change in the market, it is suggested that company should involve all the
stakeholders so that a fair price can be decided for all the stakeholders. It can also make
improvement in taking the ethical policies for the firm. By incorporating the polices
according to the changes in standard, it can help the Woolworths in better functioning
(Lynch, 2015). There are various laws that bring changes in the business. Therefore,
Woolworths should keep the update of these changes to bring the desires alterations in its
policies.

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