About the food and grocery code

The food and grocery code has changed

The remade Food and Grocery Code of Conduct came into effect on 1 April 2025. The code is mandatory for large grocery businesses.

Find out about the transitional arrangements.

The code covers certain conduct

The code regulates how large grocery businesses do business with their suppliers.

This includes:

that they must deal with suppliers lawfully and in good faith
that certain things must be included in grocery supply agreements
how grocery supply agreements may be varied
when payments may be required from suppliers for certain benefits and activities
how they must communicate any requirements, standards or quality specifications for grocery products
protections for suppliers against retribution
certain additional protections for suppliers who supply fresh produce.

The code also provides for dispute resolution through mediation and arbitration.

Large grocery businesses are automatically covered

The code is mandatory for large grocery businesses.

A retailer or wholesaler is a large grocery business for a financial year when:

they have a supermarket business or a grocery wholesaling business in Australia, and
the total revenue earned by that retailer or wholesaler, and each related body corporate of that retailer or wholesaler, from that business exceeded $5 billion for the previous financial year.

Large grocery businesses currently covered by the code are:

ALDI Stores (A Limited Partnership)
Coles Group Limited
Metcash Food & Grocery Pty Ltd, and its related bodies corporate: Rainfresh Vic Pty Ltd, Nu Fruit Pty Ltd, Girrawheen SPV Pty Ltd
Woolworths Group Limited, and its related bodies corporate: PFD Food Services Pty Ltd, Australian Grocery Wholesalers Pty Limited.

Where a retailer or wholesaler starts or stops being a large grocery business, they must notify the ACCC in writing. When to lodge the notification depends on the business’s financial reporting obligations under the Corporations Act 2001. Businesses should seek legal advice about their obligations.

Suppliers don’t need to sign up to be covered

A supplier is a business that supplies groceries for retail sale by another person or business in Australia.

Suppliers to large grocery businesses are automatically protected by the code. Suppliers don’t need to sign up to the code.

Groceries include food and other products

Groceries that are covered by the code include, but are not limited to:

food
non-alcoholic drinks
household products including electrical appliances, kitchenware and cleaning products
personal care products including toiletries, cosmetics, first aid products and medicine (other than prescription medicine)
stationery products, magazines and newspapers
tobacco and tobacco products
pet food and pet care products
plants, flowers and gardening equipment.

These groceries aren’t covered by the code:

food sold for in-store consumption
non-alcoholic drinks sold for in-store consumption
alcoholic drinks.

Grocery supply agreements are set out in the code

About grocery supply agreements

The code sets up a framework for grocery supply agreements. A grocery supply agreement is between a supplier and a large grocery business for the supply of groceries.

A grocery supply agreement is not just the principal agreement and documents made under that agreement. It includes all contracts or agreements between a large grocery business and a supplier that relate to the supply of groceries. These other documents may include:

freight agreements
promotion agreements
supplier portal documents
purchase orders.

A grocery supply agreement must be in writing. Failure to comply with this obligation will make the large grocery business liable to civil penalties.

A grocery supply agreement must set out:

any delivery requirements
the circumstances in which the large grocery business can reject groceries
when suppliers will be paid, and circumstances in which payment may be withheld or delayed
the duration of the agreement, if the agreement is intended to operate for a limited time
any quantity and quality rules
the circumstances in which the agreement may be terminated.

Failure to include provisions about these topics will make the large grocery business liable to civil penalties.

Limits on varying a grocery supply agreement

The code limits the ability of large grocery businesses to vary a grocery supply agreement.

A large grocery business must not vary a grocery supply agreement without the written consent of the supplier, unless several conditions are met. These conditions include that the grocery supply agreement expressly allows them to do so, and the variation is reasonable in the circumstances.

A large grocery business must not vary a grocery supply agreement with retrospective effect under any circumstances.

Failure to comply with these obligations will make the large grocery business liable to civil penalties.

The code is enforced

The ACCC is responsible for enforcing the code. We have the power to investigate and take enforcement action. Breaches of the code by large grocery businesses may result in civil penalties.

The code also requires the government to appoint a code supervisor. The code supervisor has a range of non-enforcement responsibilities under the code. These include to:

produce annual reports on disputes
conduct confidential supplier surveys
identify systemic issues with the code
review the dispute resolution processes of the large grocery businesses.

Interactions with other industry codes

The food and grocery code does not apply when it conflicts with the:

The dairy code will apply to a large grocery business’s relationship with dairy farmers, where the large grocery business buys milk directly from those farmers. This is in its capacity as a ‘processor’ under the dairy code. Otherwise, a large grocery business’s relationships with its suppliers, such as other farmers and other dairy processors, will be covered by the food and grocery code.

Transitional arrangements

The code applies to all grocery supply agreements from 1 April 2025. This applies regardless of whether an agreement was entered into before, on or after that day, unless one of the following exemptions applies:

Transitional arrangements for all agreements

Obligations around ‘contracting out’ of certain code protections will not apply until 1 April 2026, unless the agreement is varied sooner to deal with those matters. In this case, those obligations will apply from the day the agreement is varied.

Additional transitional arrangements for agreements relating to fresh produce

Obligations about including prices or price formulas, and exercising due care in forecasting amounts of fresh produce to be supplied will not apply until 1 April 2026, unless the agreement is varied sooner to deal with those matters. In this case the obligations will apply from the day the agreement is varied.

Notifying the ACCC under the code

The code contains a range of obligations on large grocery businesses to notify the ACCC of certain matters. Where an obligation applies, large grocery businesses should give us written notice by email or post.

Email: foodandgrocerycode@accc.gov.au

Post to:
David Salisbury
General Manager Small Business and Agriculture
GPO Box 3131, Canberra ACT 2601