The Australian Competition and Consumer Commission today welcomed the introduction of the Food and Grocery Code of Conduct, announced by the Hon Bruce Billson MP, Minister for Small Business.

The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings. It complements existing protections for suppliers under the Competition and Consumer Act 2010, including the unconscionable conduct provisions.

“Businesses that supply groceries to major retailers and wholesalers will have extra protections under the new industry code,” ACCC Chairman Rod Sims said.

“The code also provides new powers for the ACCC. Once retailers and wholesalers sign up to the code, we will be able to enforce it and take court action for breaches. We will also be able to audit retailers and wholesalers to check that they are complying with the code.”

“Coles, Woolworths and the Australian Food and Grocery Council worked closely to develop the code. We expect these retailers will sign up to it shortly,” Mr Sims said.

The code:

  • requires retailers and wholesalers to act in good faith
  • sets out the requirements of agreements between retailers or wholesalers and suppliers, including that they be in writing
  • limits when retailers or wholesalers can unilaterally or retrospectively vary an agreement with a supplier, and requires any variation and the reason for it to be in writing, and
  • sets out a dispute resolution process.

“There can be a significant imbalance in bargaining power between suppliers and large grocery retailers and wholesalers. The code seeks to limit some of the conduct that was brought to the ACCC’s attention during our supermarket suppliers’ investigation,” Mr Sims said.

“The new code, together with the recent Court judgment that Coles acted unconscionably, makes it clear that no matter how much bargaining power a retailer holds, they must deal with their suppliers fairly.”

The ACCC has developed guidance material on the code, which is available at Food and Grocery Code of Conduct.

The ACCC encourages any suppliers experiencing issues with their retailers or wholesalers to contact us for a confidential discussion.

Extracted in full from ACCC.