Woolworths will be the first major supermarket chain to sign the Food and Grocery Industry Code of Conduct.
The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings. It complements existing protections for suppliers under the Competition and Consumer Act 2010, including the unconscionable conduct provisions.
The Australian Food and Grocery Council (AFGC) said the move is another step towards establishing greater transparency and certainty for food and grocery suppliers in their transactions with supermarkets.
AFGC CEO Gary Dawson congratulated Woolworths for agreeing to the Code.
“Woolworths has been instrumental in establishing this Code with the AFGC. It was the willingness of Coles and Woolworths to come to the table and develop a meaningful Code that has made it possible,” Dawson said.
“Signing onto the Code marks Woolworths commitment to fair dealing and to improving the operation of one of the most dynamic and competitive sectors of the economy – the fast moving consumer goods sector.
“The Food and Grocery Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers and will provide greater certainty and clarity about dealings in the industry without adding unnecessary complexity or cost.
The Code has been tabled in Parliament as a regulation under the Competition and Consumer Act 2010.
Key aspects of the Code include:
- Tough restrictions on retrospective and unilateral variations to grocery supply agreements;
- Greater transparency on the basis of shelf allocation for branded and private label products;
- Recognition of the importance of intellectual property rights and confidentiality in driving innovation and investment in new products; and
- A low cost and fast track dispute resolution mechanism.