The Grocery Industry Competition Act 2023 (the Act), which came into force on 10 July 2023, provides for the establishment of a dispute resolution scheme for grocery suppliers and wholesale customers to resolve any disputes with regulated grocery retailers under the Grocery Supply Code. On 11 October 2023, the (then) Minister of Commerce and Consumer Affairs approved the New Zealand Dispute Resolution Centre | Te Pokapū Whakatau Tautohe o Aotearoa (NZDRC) to administer the Dispute Resolution Scheme under the Act.
The NZDRC has now released its draft Grocery Industry Dispute Resolution Rules (Draft Rules) and accompanying consultation paper for public review and comment. Any submissions on the Draft Rules must be filed with the NZDRC by 2pm, Friday, 26 January 2024. The Draft Rules may then be amended following any feedback, before they are submitted by the NZDRC to the Minister of Commerce and Consumer Affairs for final approval. The dispute resolution scheme will only be operational once the Rules have been formally approved.
To facilitate the feedback process, the NZDRC has created a submission template which sets out the detailed questions (listed in the table below) the NZDRC is specifically interested in receiving feedback on.
NZDRC questions
| Topic | Specific questions |
| General high-level issues | 1. Do the Rules adequately provide a Scheme for Wholesale Customers and Suppliers that is user-focused, accessible, independent, fair, accountable, efficient, and effective? |
| Mediation | 2. Are the rules relevant to Mediation clear and practical? |
| 3. Is the role of a Mediator clear? | |
| 4. Is confidentiality adequately protected by the Rules? | |
| 5. Do you have any comments to make on Rules 12.1 to 12.5? Please use precise Rule references in any comments made. | |
| Adjudication | 6. Are the rules relevant to adjudication clear and practical? |
| 7. Is the role of an Adjudicator clear? | |
| 8. The process set out in the Scheme has been proven to be efficient in time and cost. Does the practice of “no oral hearing” raise any concerns for you? | |
| Funding | 9. Is the Scheme sufficiently accessible for Suppliers and Wholesale Customers? Please use precise Rule references in any comments made. |
| 10. Are there sufficient safeguards to protect the Regulated Grocery Retailers from exposure to the (time and) cost of defending vexatious, frivolous or claims without substantial merit by Suppliers and Wholesale Customers? | |
| 11. Is it fair that Suppliers and Wholesale Customers should be required to meet the costs associated with bringing claims that are vexatious, frivolous and/or without substantial merit? | |
| 12. Do you have any comments to make on accessibility or funding? | |
| Tikanga Māori | 13. Do the rules and matters set out above adequately provide for adoption of Tikanga Māori processes and support services, substantively and procedurally? |
| 14. What comments do you have on any issues involving clause 14, with particular regard to: | |
| a. Whether how NZDRC intends to promote the Scheme is likely to be effective (clause 14(2)(b)) | |
| b. Whether the Rules provide for a Dispute Resolution Scheme which is consistent with the rules of natural justice (clause 14(2)(e) | |
| c. Whether the rules have as little formality and technicality as needed (clause 14(2)(f))? | |
| d. Please identify the precise clause you are commenting on, eg, “clause 14(2)(b)” and the relevant Rule(s). | |
| 15. Do the Rules adequately cover the requirements of clause 14? Please identify the precise clause you are commenting on, eg, “clause 14(2)(b)” and the relevant Rule(s). | |
| Part 1 of the Rules | 16. Do you have any comments to make in relation to Part 1? Please use precise Rule references in any comments made. |
| Part 2 of the Rules | 17. Rule 4.1 requires the Claimant to serve a Notice of Dispute on the relevant Regulated Grocery Retailer to initiate dispute resolution under the Scheme. Does this requirement present any problem(s) for the Claimant? |
| 18. Do you have any comments to make in relation to Part 2. Please use precise Rule references in any comments made. | |
| Part 3 of the Rules: Mediation | 19. Are the provisions for the Mediation process clear and workable? |
| 20. Is the Mediator given adequate powers to manage the process? | |
| 21. Should the Mediator be able to terminate the Mediation? | |
| 22. Is the method of enforcement of a Settlement Agreement adequate (by applying to the District Court for the Agreement to be made into an order)? | |
| Part 4 of the Rules: Adjudication | 23. Given that under clause 14(2)(i) matters must be resolved within 25 Working Days of being referred to the Scheme, are the timeframes appropriate? |
| 24. Is the enforcement procedure clear and workable? | |
| 25. Is the procedure for appeals clear and workable | |
| 26. Should Determinations be made on the papers, with no oral hearing? | |
| 27. Should an Adjudicator be able to end an Adjudication if the Claimant fails to serve their claim in time? | |
| 28. Should an Adjudicator be able to receive any evidence (on the basis they can determine the relevance, weight and materiality of any evidence provided by the Parties)? | |
| 29. Should an Adjudicator be able to fix an amount of damages if steps ordered to be taken by the Regulated Grocery Retailer are not taken by the Regulated Grocery Retailer under the Determination, by a certain time? | |
| 30. Should an Adjudicator have the power to award general damages? | |
| 31. Should an Adjudicator be able to award interest? | |
| 32. Should a Respondent be able to object to the withdrawal of a Claim? | |
| 33. Is the costs regime clear, fair and workable? | |
| 34. Do the Rules adequately protect confidentiality? | |
| 35. Do you have any comments to make about Part 4 of the Rules? Please use precise Rule references in any comments made. | |
| Part 5 of the Rules | 36. Is the method of funding the Scheme fair ie, that the Scheme is funded by the Regulated Grocery Retailers? |
| 37. Is the apportionment of the Levy fair? Is there another mechanism that would be more equitable as between the Regulated Grocery Retailers? | |
| 38. Do you have any comments to make about Part 5 of the Rules? Please use precise Rule references in any comments made. | |
| Schedule 1 of the Rules | 39. Is the appointment and revocation process sufficiently clear? |
| 40. Is the Challenge Notice process sufficiently clear? | |
| 41. Do you have any comments about Schedule 1? Please refer to relevant clauses when responding. | |
| Schedule 2 of the Rules | 42. Is the process for accounting by NZDRC to the Regulated Grocery Retailers for expenditure on items for which provisional amounts are included in the Levy sufficiently clear? |
| 43. Do you have any comments about Schedule 2? Please refer to precise Rules when responding. | |
| General comments | 44. Do you have any other comments on matters not discussed in this consultation paper? |
If you are interested in submitting feedback on the Draft Rules or understanding any aspect of the Draft Rules further, please contact our dedicated team of lawyers who specialise in competition and regulatory law.
Please also see our previous alert on the Grocery Industry Competition Act 2023 and also our review of the final version of the Grocery Supply Code to gain a broader understanding of developments in this area.
This article was co-authored by Jovana Nedeljkov, Senior Solicitor and Soomin Yang, Solicitor in our Corporate and Commerical team.
