On 1 May, big changes are coming to the Grocery Supply Code.
The 2025 Code contains enhanced rights for suppliers and responsibilities for regulated grocery retailers. Grocery industry players will want to become familiar with these, and we briefly summarise some key changes.
The new code – clear and strong protections
The 2025 Code provides stronger protection for suppliers in the areas of:
- retaliation;
- investment buying; and
- payments for wastage.
The Code also establishes new record-keeping requirements to enable the Commerce Commission to access material that might have influenced a retailer’s decision. This will help the Commission assess the rationale for a retailer's decision and, therefore, its compliance with the Code, GICA and supply agreement.
Retaliation
Protection against retaliation is not a new feature under GICA. In the 2023 Code, retaliation was one factor among many that could lead to a finding of a breach of the retailer's good-faith obligations. Also, it was not a genuine reason for delisting if the delisting was a punishment for a complaint, concern or dispute. These protections remain in the 2025 Code.
However, a new clause in the 2025 Code (clause 30) is more direct. It clarifies and defines the circumstances in which a supplier may not retaliate. Where a supplier exercises, or indicates it will exercise, a right under the 2025 Code against a retailer, the retailer cannot act in any way that is detrimental to the supplier.
The clause lists eight examples of detrimental action:
- delisting groceries;
- requiring excessive promotional or marketing contributions;
- rejecting groceries;
- changing the location of groceries in-store or online;
- delaying restocking;
- reducing restocking;
- cancelling orders; or
- terminating, varying, or not renewing the supply contract.
This list is not exhaustive.
A retailer may not retaliate against a supplier for exercising its rights under the Code or a supply agreement, or for interacting with the Commerce Commission or the Grocery Industry Dispute Resolution Scheme. This means that suppliers can speak confidently and confidentially with the Commission or the scheme provider, New Zealand Dispute Resolution Centre (NZDRC), about their concerns and explore the Commission’s powers and NZDRC’s dispute-resolution processes under the scheme without fear of retaliation.
The 2025 Code provides that the action is not retaliation if the retailer can establish it was taken or threatened to be taken for genuine commercial reasons, and not as a punishment. The onus to prove this is on the retailer.
Investment buying
The 2025 Code tightens provisions relating to funded promotions. The key change addresses the practice of “investment buying”: over-ordering stock at a promotional price and reselling it at a non-promotional price after the promotion ends.
From 1 May, if the retailer does this, it must repay the supplier the proportion of the supplier’s promotional funding that relates to those groceries.
Payments for Wastage
The 2023 Code prevented retailers from charging suppliers for grocery waste that is no longer within the supplier's control.
However, there was a carve-out. The supply agreement could specify when a retailer could charge for wastage, within certain limits and subject to conditions.
That carve-out has been removed. Clause 14 of the 2025 Code prohibits a retailer from charging for wastage of groceries that are outside the supplier's control. This aligns with the Code’s provisions on shrinkage.
Conclusion
These, along with other changes, have been put in place to strengthen protections for suppliers. Enhanced record-keeping obligations and increased access to those records by the Commerce Commission are an extra burden for retailers but are likely to increase transparency in decision-making. Investment buying is no longer incentivised, and charging suppliers for in-store wastage is prohibited. Good-faith conduct and delisting processes have also been addressed, and we expect that these will be relevant to disputes brought to the scheme for resolution.
If you are a supplier navigating a dispute with a retailer, NZDRC administers the Grocery Industry Dispute Resolution Scheme and is here to help. Visit www.grocerydispute.co.nz to learn more about the process and for contact details.
