A voluntary code of conduct for the food and grocery industry has been introduced under the Competition and Consumer Act 2010. The Code governs certain conduct by grocery retailers and wholesalers in their dealings with suppliers.
Only those retailers and wholesalers that have elected to be bound by the Code by written notification to the ACCC will be bound by it.
For the purposes of the Code:
* a retailer is a corporation that carries on a supermarket business
* a wholesaler is a corporation that purchases groceries from suppliers to resupply to a supermarket
* a supplier is someone who is carrying on (or seeking to carry on) a business of supplying groceries for retail sale by another person (including another business).
An important element of the Code is the express requirement for retailers and wholesalers to deal with suppliers in good faith – for example, during the bargaining stages of establishing grocery supply agreements, during the term of the agreement, and in dealing with any disputes.
As stated by the Small Business Minister Bruce Billston,
“this is about promoting fair and healthy competition.”
There are concerns in the industry that the Code has not gone far enough because it is not mandatory, and only binds those that have voluntarily signed up to it. It is believed that Coles and Woolworths will be signing up, however Metcash (IGA) at this stage has refused.