AUSTRALIA | The Food and Grocery Code of Conduct is now mandatory for Australia’s largest supermarkets and grocery wholesalers.
The code sets the rules for how supermarkets and wholesalers negotiate and contract with their suppliers. It requires them to have written supply agreements in place, act lawfully and in good faith towards their suppliers, and ensure suppliers do not face retribution for exercising their rights under the code.
Large supermarkets and wholesalers now face significant penalties for contraventions of the updated code.
The changes, which commence on the 1st of April 2025, make the code mandatory for all retailers and wholesalers that earned over AUD 5 billion from their supermarket or grocery wholesaling businesses in the previous financial year.
Suppliers to those retailers and wholesalers are automatically protected by the code.
The ACCC will also now be able to issue infringement notices and take court action seeking penalties against businesses that contravene the code.
For the most harmful contraventions, this includes a maximum penalty per contravention that will be the greater of AUD 10 million, or three times the value of the benefit derived, or, if that value cannot be determined, 10 percent of the company’s turnover during the preceding 12 months.
The ACCC has also launched a new online portal for people to make anonymous reports about potential contraventions of the code.
The Food and Grocery Code of Conduct is prescribed under the Competition and Consumer Act. Until the 1st of April 2025, the code was voluntary and grocery retailers or wholesalers could opt-in to being bound by the code.
In October 2023, the Government announced a review of the code.
In January 2024, the Government appointed the Hon Dr Craig Emerson to lead the review. The review's terms of reference included consideration of whether the code should be mandatory and whether the code should include civil penalty provisions.
