The Grocery Supply Code of Conduct was launched by the Government on 1 September 2023.

It followed a consultation period in which the submissions were invited on a draft version of the Code, and comes into effect on September 28.

The main provisions of the Code include:

  • a requirement to act in good faith when dealing with suppliers.
  • a requirement that all supply agreements be written in plain language and contain a minimum amount of information.
  • restrictions on changes to agreements made without the consent of the supplier and retrospective variation to supply agreements.
  • restrictions on when a retailer may require a supplier to use a particular transport or logistics service.
  • a requirement that retailers pay supplier invoices within a reasonable timeframe.
  • requirements for better sharing of costs relating to promotions.
  • restrictions on retailers requiring payment for its own business activities, such as merchandising.
  • restrictions regarding payment for lost, damaged and spoiled stock.
  • requirements for the acceptance or rejection of fresh produce.
  • an obligation to respond to requests for price increases from suppliers.
  • protections for a supplier’s confidential information and intellectual property.
  • obligations preventing retailers from unduly obstructing suppliers from entering into supply agreements with other parties.
  • protections relating to anti-retaliation and freedom of association.
  • penalties for breaches of the Code include the greater of 3% of turnover or $3 million.

NZFGC Chief Executive Raewyn Bleakley welcomed the Code, saying: “The Code is a long-awaited step that will go a long way to creating the environment needed for a better and fairer grocery sector that will give suppliers more confidence and help deliver consumers better options.

“We thank Minister Webb and MBIE officials for further consulting the industry to refine the draft Code and getting it before the Cabinet in tight timeframes.”

NZFGC is developing a suite of training options for members in conjunction with NextGen Group and Matthews Law. This will help members know what the Code allows for and what it prohibits, and the avenues available for suppliers to raise concerns. They will involve active participation, case studies, debate, and questions in a mix of open and in-house workshops and self-paced digital learning.

Read the Government’s announcement and check out the Code here.

Read NZFGC’s submission on the draft code