If you are a supplier negotiating terms, resolving a dispute or doing business with retailers or wholesalers, you may have the benefit of a number of rights and protections in the Food and Grocery Code (the Code) and the Competition and Consumer Act 2010 (CCA).
The Code aims to improve the standards of business conduct in the food and grocery sector. It sets out obligations for retailers or wholesalers who have agreed to be bound by the Code, when they deal with suppliers.
Beyond this, the CCA, including the Australian Consumer Law (ACL), has a range of broad provisions that are relevant to suppliers and other small businesses.
It is illegal for a business to engage in conduct that misleads or deceives, or is likely to mislead or deceive consumers or other businesses. This law applies even if the business did not intend to mislead or deceive anyone, or no one has suffered any loss or damage as a result of the conduct of the business.
When deciding if conduct is misleading or deceptive, or likely to mislead or deceive, the most important question to ask is whether the overall impression created by the conduct is false or inaccurate.
It is also illegal for a business to make statements that are incorrect or likely to create a false impression. This includes:
- advertisements or statements in any media (print, radio, television, social media and online)
- advertisements on product packaging
- any statement made by a person representing the business.
Under the ACL, businesses must not engage in unconscionable conduct when dealing with other businesses or their customers. This means retailers or wholesalers must also not engage in unconscionable conduct towards their suppliers.
Unconscionable conduct does not have a precise legal definition as it is a concept that has been developed on a case-by-case basis by courts over time. Conduct may be unconscionable if it is particularly harsh or oppressive. To be considered unconscionable, conduct it must be more than simply unfair — it must be against conscience as judged against the norms of society.
Example: threats against suppliers
The ACCC took action against Coles Supermarkets Australian Pty Ltd for making threats of commercial consequences to certain suppliers to get them to agree to a rebate program. The Court found that the misconduct of Coles was serious, deliberate, repeated and not done in good conscience.
Certain business practices that limit or prevent competition are against the law. The following are examples of these practices.
Broadly speaking, exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. Exclusive dealing is against the law only when it substantially lessens competition
Section 45 of the CCA prohibits contracts, arrangements, understandings or concerted practices that have the purpose, effect or likely effect of substantially lessening competition in a market, even if that conduct does not meet the stricter definitions of other anti-competitive conduct such as cartels.
Misuse of market power
A business with a substantial degree of power in a market is not allowed to engage in conduct that has the purpose, effect or likely effect of substantially lessening competition in a market. It is not illegal to have, or to seek to obtain market power by offering the best products and services.
If you are concerned that a retailer, wholesaler or business has engaged in misleading or deceptive conduct, unconscionable conduct, or anti-competitive behaviour, you can make a report to the ACCC.