Rules for relations between retailers and suppliers

Wednesday, 04 July, 2018

Rules for relations between retailers and suppliers

Professor Graeme Samuel AC has released the Draft Report for the Review of the Food and Grocery Code of Conduct. The report makes a number of recommendations that seek to strengthen and improve the code, which established key rules in the commercial relations between grocery retailers and suppliers.

“The review has extensively consulted stakeholders in understanding how the Australian Food and Grocery Code of Conduct can be enhanced to improve the operation of one of the most dynamic and competitive sectors of the economy — the fast-moving consumer goods sector,” said the Australian Food and Grocery Council (AFGC) CEO Tanya Barden.

“The Food and Grocery Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers and provides greater certainty and clarity about dealings in the industry without adding unnecessary complexity or cost.

“The recommendation that retailers and wholesalers be subject to the same obligations under the code will provide certainty for suppliers and ensure competitive neutrality.

“The introduction of new fair dealings provisions, with effective guidance, will ensure that ongoing negotiations between parties should be consistent with the spirit of the code in ensuring fair dealings between parties.

“The draft report’s efforts to enhance oversight and accountability is welcome and the implementation of Code Adjudicators in each retailer will need some consideration to ensure consistency of interpretation of the code across the entire FMCG sector and to ensure it is a disputes mechanism that suppliers are comfortable using.

“The recommendation to prevent retailers from requiring suppliers to provide commercially sensitive information where the retailer has an own-brand product will better safeguard suppliers’ intellectual property and is consistent with the code’s light touch regulatory approach.

“The AFGC will continue to engage with the Review Process and looks forward to ensuring the code remains key in entrenching standards of fair behaviour between suppliers and retailers,” concluded Barden.

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