The Commerce Commission has launched a checklist for grocery suppliers to understand their rights under the new Grocery Supply Code, and to provide guidance as major supermarkets review existing or new agreements.
Major supermarkets have until the 28th of March 2024 for existing agreements to send suppliers any necessary variations to meet the requirements. Suppliers are not required to have signed all agreements before the 28th of March 2024. This deadline only applies to major supermarkets.
The Grocery Supply Code was introduced in September 2023 and is now in full force. The Code requires regulated grocery retailers to offer suppliers compliant grocery supply agreements and regulate ongoing retailer conduct.
The main purpose of the checklist is for suppliers to assess the ongoing conduct of retailers against the Code’s conditions and guidance surrounding new or amended agreements from retailers against the provisions of the Code.
By releasing this checklist, the Commerce Commission has hoped that it will provide suppliers with a better understanding of their rights under the Code when negotiating and entering into agreements with retailers. The checklist will also keep suppliers informed about ongoing interactions with retailers.
The Grocery Supply Code has promoted transparency and certainty about the terms of agreements between retailers and suppliers in fmcg and has prohibited any unfair conduct between either party.
Outlined within the Code is the key requirement for retailers to act in good faith when dealing with suppliers. Suppliers have been advised to consider whether a retailer is acting in good faith across all provisions and in negotiations. The Code also requires all agreements to be written in plain language and that a copy of the agreement is provided to suppliers.
Certain matters in agreements formed under the Grocery Supply Code that must be covered include price, payment (including circumstances for withholding), quantity, quality, terms of the agreement, delivery terms of the groceries (including the grounds for rejections), cancellation, and delisting.
The Commerce Commission has also encouraged all suppliers to keep written records of their interactions with retailers. The commission has also advised suppliers to take their time, read the checklist, and seek legal advice before signing anything.
Click here to read the Grocery Supply Code Checklist.
