Food and Grocery Code of Conduct

Summary: If your business supplies supermarkets that have signed up to the Food and Grocery Code of Conduct – including Coles, Woolworths and ALDI – make sure you’re aware of your new protections.

Published: 9 September 2015

Hi, I'm Dr Michael Schaper, Deputy Chairman of the Australian Competition and Consumer Commission.

The ACCC is responsible for enforcing the Competition and Consumer Act, and the new Food and Grocery Code. I want to briefly today let you know about the Code and you rights and what to do if you think someone is breaching it.

The Code ensures that relationships between grocery retailers or wholesalers and their suppliers are built on good faith. It sets out the rules about how retailers and wholesalers can deal with their suppliers. The Food and Grocery Code is voluntary, which means that it only applies to those retailers or wholesalers that have agreed in writing to be bound by the Code. By July 2015, Aldi, Coles, Woolworths and a Sydney-based retailer, About Life, had all signed up to the Code, which we think is a good start. We list on our website all the current signatories, so you can always check that.

It's a priority for us to make sure that these companies comply with the Code. So if you supply products to one of these supermarkets, or to any other retailer or wholesaler that signs up to the Code in future, or even if you're considering becoming a supplier, here are some of your key protections.

Firstly, retailers and wholesalers must enter into written grocery supply agreements with their suppliers. Secondly, retailers and wholesalers must act in good faith in their dealings. Thirdly, retailers must meet a set of minimum behavioural standards when dealing with matters such as payments, delisting, specifications for fresh produce and when allocating shelf space. Fourthly, threatening suppliers with business disruption or termination without reasonable grounds is prohibited. And finally, the Code also includes processes to help suppliers resolve their disputes with retailers and wholesalers.

If you're a supplier, in the first instance you should always try to resolve any dispute directly with your retailer or your wholesaler. However, if you have concerns that a retailer or wholesaler has done something that's prohibited under the Code or you just have a general enquiry about the Code, then you can always contact the ACCC. We can investigate and if it's necessary, take enforcement action.

There are no financial penalties for a breach of the Code, but we can seek out court ordered injunctions, compensation for people or companies that have suffered loss or damage caused by the conduct, and various other remedies.

Conduct that breaches the Code can also potentially breach the unconscionable conduct provisions of the Australian Consumer Law, and that can mean penalties of up to $1.1 million per contravention. You can find out more about the Food and Grocery Code, including details on what I've mentioned in this video by calling our Small business helpline, 1300 302 021. Alternately, you can visit our website, accc.gov.au. Thanks for your interest, and good luck in your future business dealings.

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