Code Corner: February 2025

Member Matters

20 February 2025

Food and Grocery Code of Conduct

Following the 2024 review of the Food and Grocery Code of Conduct, the Government has released the updated regulations for the mandatory code along with the penalty regime. The updated Code will come into effect on 1 April 2025. Based on the principles of good faith the purpose remains to regulate standards of business, build trust and cooperation, improve transparency and certainty, and deliver an effective, fair and equitable dispute resolution process. The substantive changes to the Code include:

Mandating the Code for large grocery businesses (LGB) retailers and wholesalers with a turnover greater than $5B
Introduction of significant financial penalties for LGB who contravene Code obligations
Changes to the dispute resolution processes
Prohibition of retribution by LGB
Requirement for any LGB incentive schemes to be aligned with the purpose and intent of the Code
Obligation for large suppliers (turnover greater than $1B) to act in good faith for civil penalties to apply

The AFGC will provide further details on the changes and the implications for suppliers in due course.

New Zealand – Wholesale Supply Inquiry

Those suppling into the New Zealand market should note the Commerce Commission is carrying out an inquiry into the wholesale supply of groceries and may consider additional regulations. The first Annual Grocery Report identified some concerns with the current wholesale market, including uncompetitive wholesale pricing and limited range of products, that cannot be addressed under the regime’s current settings. It is intended to enable wholesale customers to have reliable and cost-effective wholesale supplies of groceries and reasonable access to the benefits of scale and efficiency of the registered grocery retailers, thus improving competition.

The review may result in further regulatory intervention. More detail is here and the AFGC will continue to monitor.

United Kingdom – Grocery Code Adjudicator

The annual Grocery Supply Chain Code of Practice survey is now open to all suppliers suppling into the UK market. The survey gives you the chance to confidentially tell the Grocery Code Adjudicator about your experiences dealing with the large UK retailers. Questions cover the behaviour of the retailers and issues affecting the industry and the results will help us understand which large retailers are perceived as the most, and least, compliant with the Code. The survey is open until 23 February.

For more information and to take part >>

Canada – appoints first Grocery Sector Code of Conduct President and Adjudicator

The Board of Directors of the Office of the Grocery Sector Code of Conduct (OGSCC) announced in January 2025 the appointment of Karen Proud as the organisation’s first President and Adjudicator. She will officially assume the role on March 17th, 2025. In this role, Ms. Proud will oversee the implementation of the voluntary Grocery Sector Code of Conduct. Her responsibilities include fostering compliance, providing guidance on the Code’s interpretation, resolving disputes, monitoring practices, and reporting on progress annually. Through her role, she will promote collaborative and ethical business practices, ensuring the Code evolves alongside industry needs. The Canadian Grocery Sector Code of Conduct aims to foster predictability and fair dealing across the industry. It should be fully operational by June 2025.

EU Unfair trading practices

To improve the position of farmers and small and medium sized businesses in the food supply chain, the EU has adopted legislation that bans 16 unfair trading practices. These came into effect in December 2024. This identifies ‘black’ and ‘grey’ practices, where the back practices are prohibited and the grey practises are allowed if the supplier and the buyer agree on them beforehand in a clear and unambiguous manner.

The ten black unfair trading practices are:

payments later than 30 days for perishable agricultural and food products
Payment later than 60 days for other agri-food products
Short-notice cancellations of perishable agri-food products
Unilateral contract changes by the buyer
Payments not related to a specific transaction
Risk of loss and deterioration transferred to the supplier
Refusal of a written confirmation of a supply agreement by the buyer, despite request from the supplier
Misuse of trade secrets by the buyer
Commercial retaliation by the buyer
Transferring the costs of examining customer complaints to the supplier

The six grey unfair trading practices are:

Return of unsold products
Payment of the supplier for stocking, display and listing
Payment of the supplier for promotion
Payment of the supplier for marketing
Payment of the supplier for advertising
Payment of the supplier for staff of the buyer, fitting out premises

More information is available here.