The Australian competition authority has implemented new requirements under the revised Food and Grocery Code of Conduct, which took effect this week. Major grocery retailers, including ALDI, Coles, Metcash, and Woolworths, are now obligated to provide detailed information in their supply agreements regarding the conditions under which they can modify agreements, request payments, or offset payments from supplier invoices.

Suppliers are granted the right to negotiate the terms of their grocery supply agreements at any time. Should both parties agree to amend the terms, such changes must be documented in writing to ensure clarity and compliance.

One significant aspect of the new code is the provision allowing suppliers and supermarkets to 'opt out' of certain protections concerning unilateral variations, supplier payments, and set-off arrangements. In cases where an 'opt out' is exercised, large grocery businesses must clearly identify these provisions in their agreements and provide a rationale for their reasonableness, thereby ensuring that suppliers are fully informed of the implications.

The primary aim of these new requirements is to enhance transparency for suppliers regarding the operation of the code's 'opt out' provisions. Furthermore, large grocery businesses are mandated to negotiate in good faith and refrain from retaliatory actions against suppliers during negotiations, particularly concerning range reviews and price increase requests.

Suppliers who suspect non-compliance with the Food and Grocery Code are encouraged to report their concerns confidentially to the Australian Competition and Consumer Commission (ACCC). Additionally, suppliers can seek assistance from the independent Code Mediator to address any issues or complaints informally or formally.