The Commerce Commission has today published a consultation paper seeking public feedback on the Grocery Supply Code (Code). Submissions are due by 16 September 2024.
The purpose of the review is to assess the operation and effectiveness of the Code and whether it should be amended, revoked or replaced. The Commission must report to the Minister of Commerce and Consumer Affairs once the review is completed. Section 13 of the Grocery Industry Competition Act 2023 (the Act) also gives the Commission the power to revoke and replace the first Code via a determination. The Commission has indicated that if, as part of this review, it considers that the Code should be amended to better achieve its purpose, it will develop a determination for consultation.
The Code imposes obligations on regulated grocery retailers (RGRs) in relation to their dealings with grocery suppliers and specifies certain requirements for grocery supply agreements. The Commission has advised in its media release that it is starting the review less than a year after the Code came into effect due to “concerns that systemic issues are not being addressed and suppliers may not be benefitting from the full protections of the Code” as a result of the Code’s built-in “carve-out provisions”. Our view is that this review is needed as there have been challenges with the application of the Code in practice, particularly in relation to how specific obligations under the Code are interpreted or should be applied.
While the Commission is broadly seeking any feedback on the operation/effectiveness of the Code, it has also set out a list of questions in its consultation paper (set out below) to help interested parties provide their views:
| Question | Consultation questions |
|---|---|
| Question 1 |
Do you consider the Code is currently effective in supporting the objectives set out in paragraph 21? Paragraph 21 of the Commission’s paper provides that the purpose of the Code can be separated out into the following series of objectives:
|
| Question 2 | Following on from Question 1, are there certain objectives within paragraph 21 that you wish to comment on? |
| Question 3 | Are there any issues with the content of the Code that may be impacting the Code’s effectiveness in supporting the objectives in paragraph 21? |
| Question 4 | Are there any opportunities for improving the content of the Code to support the objectives in paragraph 21? |
| Question 5 | Are there any issues with the way the Code is being operated or implemented that may be impacting its effectiveness in supporting the objectives in paragraph 21? |
| Question 6 | Are there any opportunities for improving the operation or implementation of the Code to support the objectives in paragraph 21? |
| Question 7 | Do you have any suggestions about steps to include within the review process to support input into the review? |
| Question 8 | Do you have any other comments you would like us to consider when planning this review process |
It is important that all industry participants use this opportunity to provide feedback on the issues identified in the Commission’s paper. Interested parties can make submissions through the Commission’s questionnaire available on its website. The Commission has indicated it will publish its draft review conclusions in the first quarter of 2025 and, if changes are proposed to the Code, draft reasons and a draft Code will also be published for consultation. The Commission has also indicated that its final conclusions/final Code (if it determines amendments to the Code are required) will be published by mid-2025 and its report to the Minister of Commerce and Consumer Affairs will be completed as soon as practicable thereafter.
Our experts have been working closely with market participants on the practical application of the Code. If you have any questions in relation to the consultation paper or how the current Code works in practice, or if you would like help in providing your views to the Commission, please reach out to our experts.
This article was co-authored by Soomin Yang, a Solicitor in our Competition team.
