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Policies to prevent retribution against suppliers
A large grocery business must not engage in retribution against a supplier. Failure to comply with this obligation will make the large grocery business liable to civil penalties.
Retribution is when a large grocery business takes an action, or threatens to take an action, that would cause detriment to a supplier who has exercised a right under the Food and Grocery Code of Conduct.
Examples may include:
- delisting a grocery product from the supplier
- requiring the supplier to make excessive contributions towards promotional or marketing costs for the supplier’s grocery product
- rejecting fresh produce from the supplier
- changing the location of the supplier’s grocery product in store or online to the detriment of the supplier
- delaying restocking of the supplier’s grocery product in store or online
- varying, terminating, or not renewing an agreement with the supplier for supplying an ‘own brand’ product
- reducing the volume of stock ordered from the supplier
- cancelling an order from the supplier
- varying, terminating, or not renewing a grocery supply agreement with the supplier.
These actions aren’t retribution when they are taken for genuine commercial reasons.
A large grocery business must also have written policies in place about the procedures that it will follow to:
- review decisions made by their buying team or category manager for a supplier that has exercised a right under this code against the large grocery business, and
- make sure that those decisions are not retribution against the supplier.
Failure to comply with these obligations will make the large grocery business liable to civil penalties.
Incentive schemes for staff
If a large grocery business has an incentive scheme that applies to any member of their buying team or a category manager, the large grocery business must make sure that the scheme is consistent with the purposes and obligations of the code.
An incentive scheme includes things like reward arrangements for the supply or financial performance of grocery products or groups of products.
Failure to comply with this obligation will make the large grocery business liable to civil penalties.
Responsible senior managers
A large grocery business must appoint one or more of its senior managers to oversee its interactions with its suppliers. They must take all reasonable steps to make sure that a senior manager always oversees interactions with its suppliers.
For each appointment, the large grocery business must notify the ACCC and all suppliers within 10 days of the start and end of each appointment.
The large grocery business must make the responsible senior manager’s contact details available to the ACCC and all suppliers.
Failure to comply with these obligations will make the large grocery business liable to civil penalties.
Making contact details available
Large grocery businesses must make up-to-date contact details available to all suppliers for:
- the senior buyer for the supplier
- at least one other member of the buying team whose role includes buying grocery products from the supplier, or supervising such a person
- that large grocery business’s code mediator.
The code mediator’s contact details must also be published on the large grocery business’s website.
Failure to comply with these obligations will make the large grocery business liable to civil penalties.
Training for the buying team
When a retailer or wholesaler becomes a large grocery business under the code, they must, within 6 months, provide their buying team:
- with a copy of the code
- training on the code’s requirements.
After this 6-month period, when a new staff member joins a large grocery business’s buying team, they must also be given a copy of this code and receive training on its requirements.
A large grocery business’s buying team must also receive annual retraining on the requirements of this code.
The large grocery business must keep a written record of the training provided under the code.
Failure to comply with these obligations will make the large grocery business liable to civil penalties.
Record keeping
Large grocery businesses must keep the originals or copies of all grocery supply agreements:
- for the duration of the agreement
- and for 6 years after the agreement ends.
Large grocery businesses must also keep the originals or copies of these for 6 years:
- additional or different quantity or quality requirements that have been agreed
- notices of unilateral variations of a grocery supply agreement
- written consent from a supplier to the set-off of an amount against the supplier’s invoice
- notice of a decision to delist a product
- supplier requests for information about their delisting, and any statement or information given because of such a request
- notice of the outcome of the review of a decision to delist a product
- reasons for rejecting fresh produce
- notice of required changes to packaging, labelling or preparation standards
- notice of a material change to supply chain procedures
- a written summary of systems relating to confidential information
- product ranging principles or shelf space allocation principles published or provided to a supplier
- notice of a range review
- a proposed price increase notified by a supplier and the large grocery business’s response
- a supplier request to start negotiations about a price increase
- a notice that a supplier complaint is vexatious, trivial, misconceived or lacking in substance
- a copy of a code mediator’s report given to the large grocery business each financial year
- a written record of training provided
- any other document provided to a large grocery business by a supplier that shows, or appears to show, that the large grocery business has or has not complied, with a provision of the code.
Failure to keep these documents will make the large grocery business liable to civil penalties.