2 March 2015
Media Release - #2015016, 2015

Grocery Code to improve relationships between retailers, wholesalers and suppliers

The Government has moved to ensure fair and transparent commercial dealings between retailers, wholesalers and suppliers in the Australian grocery sector by creating a Food and Grocery Code of Conduct.

The Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015 was prescribed as a code on Thursday 26 February 2015 and will improve commercial relationships throughout the entire supply chain of Australia's grocery sector.

The Code will ensure that relationships between retailers and suppliers are built on good faith and help them work together to achieve positive outcomes for the health and vitality of our grocery sector and the good of Australian consumers.

The Code applies to retailers and wholesalers, and features:

  • an obligation to enter into grocery supply agreements in writing;
  • minimum standards of behaviour in dealings with suppliers, including an obligation to act in good faith and a prohibition against threatening suppliers with business disruption or termination without reasonable grounds; and
  • dispute resolution mechanisms to assist suppliers in resolving disputes.

The Code is comprehensive and covers contractual dealings such as supplier funded promotions, labelling, shelf space and positioning, intellectual property and payments for wastage.

The Code will only bind those retailers and wholesalers that agree to sign on to the Code. Suppliers are automatically covered by the Code. The ACCC enforces compliance with the code.

As a prescribed code under the Competition and Consumer Act 2010, the Australian Competition and Consumer Commission will be able to take enforcement action for breaches of the Code by the retailers and wholesalers who have signed it.

The Code does not override the existing provisions of the Competition and Consumer laws but will improve the transparency of commercial dealings in the sector. This will help to prevent instances of unconscionable conduct, and enhance the ACCC's capacity to take action against misleading or deceptive conduct and misuse of market power.

The Code will be reviewed three years after commencement.

The Government is committed to ensuring Australia is the very best place to start and grow a business.

When businesses become signatories to this code, they are signalling their commitment to growing Australian business, ensuring healthy competition, and undertaking best practice commercial behaviour.