Balancing the bargaining power

New Code of Conduct for food retailers and suppliers

There’s good news on the horizon for food and grocery suppliers in Australia with a new code of conduct designed to level the playing field between large retailers and wholesalers, and the smaller suppliers they buy from.

The Food and Grocery Code of Conduct, introduced this month by the Australian Competition and Consumer Commission (ACCC), addresses specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers under the Competition and Consumer Act 2010.

Small Business Commissioner, David Eaton, says the new Code of Conduct, although voluntary, is a step in the right direction and will hopefully result in a fairer trading environment for small and medium sized food and grocery producers.

“The Code recognises the significant imbalance in bargaining power that often exists between large retailers and wholesalers, and the smaller suppliers they buy from, and goes some way to addressing this imbalance,” Mr Eaton said.

The Code provides increased powers for the ACCC to enforce and take court action for breaches.

Coles, Woolworths and the Australian Food and Grocery Council have worked closely with the ACCC to develop the Code and are expected to sign up to it soon.

The Food and Grocery Code of Conduct:

  • requires retailers and wholesalers to act in good faith
  • sets out the requirements of written agreements between retailers or wholesalers and their suppliers
  • limits when retailers or wholesalers can unilaterally or retrospectively vary an agreement with a supplier, and requires any such variations to be in writing, and
  • includes a dispute resolution process.

The Commissioner is encouraging food and grocery retailers and wholesalers to sign up to the code as soon as possible. Suppliers are not required to sign up as they will be covered by the Code when dealing with a retailer or wholesaler that has agreed to be bound by it.

For more information on the Food and Grocery Code of Conduct, visit Code of Conduct.

For advice and guidance on small business issues, please contact: 13 12 49.

Media contact: Di Graham 6552 3218 / 0432 750 565