Grocery supply agreements under the code

  • A grocery supply agreement is an agreement between a supplier and a retailer or wholesaler for the supply of groceries to a supermarket business.
  • Certain information must be included in the grocery supply agreement.

What the ACCC does:

  • We enforce the food and grocery code.
  • We provide guidance material for industry participants about code obligations.

What the ACCC can’t do:

  • We don't resolve disputes.
  • We don't provide legal advice.
  • We don't investigate individual supplier complaints about a retailer or wholesaler.

About grocery supply agreements

A grocery supply agreement is an agreement between a supplier and a retailer or wholesaler for the supply of groceries to a supermarket business.

A grocery supply agreement is not just the principal agreement and documents made under that agreement — it includes any contracts or agreements between a retailer or wholesaler 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.

Tips for suppliers

It is good practice to keep written records of conversations with retailers and wholesalers when negotiating a grocery supply agreement. When an agreement is reached, get confirmation in writing of what was agreed.

Information to be included in a grocery supply agreement

A grocery supply agreement must set out:

  • any delivery requirements
  • the circumstances in which the retailer or wholesaler 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.

Limits on varying or changing a grocery supply agreement

A grocery supply agreement is varied, renewed or extended if the retailer or wholesaler takes any action to change, adjust or continue it. For example, if they submit a new purchase order under the terms of an existing grocery supply agreement.

The Food and Grocery Code of Conduct limits the ability of retailers or wholesalers to vary a grocery supply agreement. Specifically, one-sided or retrospective variations are limited.

  • individually - without the consent of the supplier, or
  • retrospectively - varies the grocery supply agreement with retrospective effect.

Whether the grocery supply agreement can be varied individually or retrospectively depends on when the agreement was made.

Agreements made before 3 October 2020

Grocery supply agreements that were made before 3 October 2020 and were not varied, renewed or extended after the amendments to the code commenced on 3 October 2020 — the retailer or wholesaler is generally only able to make these types of changes if the grocery supply agreement allows them to do so, and the change is reasonable.

Agreements made on or after 3 October 2020

Grocery supply agreements that come into force on or after 3 October 2020, and existing grocery supply agreements that are varied, renewed or extended after 3 October 2020 — retrospective variations are banned and parties to these grocery supply agreements cannot agree to opt out of the ban.

Retailers or wholesalers can only make unilateral variations to grocery supply agreements if several conditions are met including that the grocery supply agreements allows them to do so, and the change is reasonable.

Next steps if a retailer or wholesaler is doing something they shouldn’t

Contact the business

If a problem occurs, your first step is to contact the retailer or wholesaler to explain the issue.

If the business doesn’t resolve the problem, there are more steps you can take.

Find out more about your options for resolving a dispute.

Report a problem to the ACCC

You can also report a problem to the ACCC. We use these reports to identify issues that need investigation.

Make a report to the ACCC

See also

Resolving disputes under the code

Rights and responsibilities under the food and grocery code

Obligations and protections under the food and grocery code

Unfair contract terms

Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015

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