The Food and Grocery Code of Conduct has officially become mandatory for Australia’s largest supermarkets and grocery wholesalers, effective from today. This code establishes essential rules governing how these retailers negotiate and contract with their suppliers.

Under the new regulations, supermarkets and wholesalers are required to have written supply agreements, act lawfully and in good faith towards their suppliers, and ensure that suppliers are not penalized for exercising their rights under the code. Non-compliance with these updated rules can lead to significant penalties for the businesses involved.

Starting from April 1, 2025, the code will apply to all retailers and wholesalers that generated over $5 billion from their grocery operations in the previous financial year. Suppliers to these large retailers will automatically benefit from the protections offered by the code.

The Australian Competition and Consumer Commission (ACCC) now has the authority to issue infringement notices and pursue court actions against businesses that violate the code. For severe breaches, penalties can reach up to $10 million, three times the value of the benefit gained from the contravention, or 10% of the company’s turnover from the past year if the benefit cannot be determined.

To facilitate reporting of potential violations, the ACCC has launched a new online portal for anonymous submissions. Businesses can also report issues through the ACCC’s Infocentre.

The Food and Grocery Code of Conduct is part of the Competition and Consumer Act and was previously voluntary until the recent changes. A review of the code was announced by the Government in October 2023, leading to its mandatory status and the inclusion of civil penalty provisions.