In a landmark decision, the Grocery Industry Dispute Resolution Scheme has issued its first determination under the Grocery Industry Competition Act 2023 (the GICA) — and it gives a strong indication of how this new regime will work in practice.
The scheme is designed to be user-focused, accessible, independent, fair, accountable, efficient, and effective.
Although the parties and specific facts remain confidential, the supplier was largely successful with their claim.
Approach and process
The supplier successfully focused on breaches of three key provisions of the Grocery Supply Code 2023 (the Code):
- Clause 6 – Obligation to deal with suppliers in good faith
- Clause 18 – Delisting Products [for genuine commercial reasons]
- Clause 19 – Process requirements relating to delisting [including reasonable written notice]
However, it was unsuccessful in its claims of a breach of clause 15 – Payments as a condition of being a supplier, or clause 20 – Funded promotions.
The entire adjudication process operated as a document-based process, with no in-person hearings. The adjudicator relied on written submissions and witness statements, along with contextual legislative materials and a Commerce Commission market study to assist with interpreting the Code.
Key takeaways
The adjudicator offered helpful clarification on several key concepts in the Code:
- “Payment” as a condition of being a supplier - Must involve a transfer of cash or something of value (payment in kind) from the supplier to the retailer. Standard discount or rebate arrangements don’t count as “payments” under clause 15 of the Code.
- Reasonable written notice - Needs to allow reasonable time and provide enough detail and reasoning for a supplier to understand and respond properly. A rushed process with limited explanation won’t meet the threshold.
- Genuine commercial reasons - Must be based on objective, legitimate grounds — not simply an honest push for higher margins. Acceptable reasons should reflect what reasonable commercial parties would consider fair after a proper engagement. Profit adjustments that track inflation or typical industry movements may be fine; unreasonable or unjustified demands won’t be.
- Good faith - Requires conduct that is responsive, respectful, and transparent. Retailers should communicate promptly and in measured language, provide accurate data, and avoid threats, ultimatums, or any behaviour that could be seen as retaliatory.
What this decision signals
This first determination sends a clear message: the GICA regime is not just window-dressing or a box-ticking exercise. It offers real, enforceable remedies for suppliers and sets benchmarks for how retailers are expected to behave under the Code and supply contracts.
In short, GICA has teeth — and the expectations for reasonable commercial conduct in the grocery sector are now sharper and more defined than ever.
For the full details and case study – click here.
