AUSTRALIA | The revised Food and Grocery Code of Conduct is now in force.
ALDI, Coles, Metcash and Woolworths must now include information in their grocery supply agreements about the circumstances in which they can make changes to agreements, require suppliers to make payments, or set off payments from supplier invoices.
Suppliers can request to negotiate the terms of their grocery supply agreements at any time. If the supplier and the large grocery business agree to vary the terms, the changes must be made in writing.
Opting out of protections
The food and grocery code allows suppliers and supermarkets to ‘opt out’ of protections related to unilateral variations, supplier payments and set off arrangements. If this happens, large grocery businesses must ensure all grocery supply agreements:
- identify any ‘opt out’ provisions in the agreement, and
- include a clear statement to explain that any ‘opt out’ provision is an exception to, and removes, the relevant code protection, and
- explain why the ‘opt out’ provision is reasonable.
The purpose of this new requirement is to provide suppliers with more transparency about the operation of the code ‘opt out’ provisions.
Protections for suppliers negotiating grocery supply agreements
Large grocery businesses must negotiate in good faith and must not engage in retribution against a supplier. Additional requirements apply to large grocery businesses during negotiations about range reviews and supplier price increase requests.
Potential non-compliance with the food and grocery code can be confidentially reported to the ACCC.
Suppliers can also speak to the independent Code Mediator for the relevant large grocery business. Code Mediators can assist in resolving supplier issues or complaints informally or formally.
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