Results of a Food and Grocery Code of Conduct supplier survey suggest retailers can improve compliance with the Code
One year has now passed since Australia's two major supermarkets signed up to the Food and Grocery Code of Conduct. A survey of suppliers has found that suppliers have high levels of knowledge and understanding of the Code and that major supermarket retailers that have signed up to the Code have significant scope to improve their compliance with the Code's obligations. Read more about the survey results here.
The Australian Food and Grocery Council (AFGC) has stated that suppliers continue to raise issues with the criteria for range reviews and delisting of products, requests to suppliers for payments to make up shortfalls in retailer profits, payment terms, and progress on new grocery supply agreements.
The Australian Competition & Consumer Commission (ACCC) indicated earlier this year that it was going to focus on the Food and Grocery Code of Conduct and will take enforcement action whenever needed to ensure the Code succeeds. You can view a copy of the Code here.
New laws against unfair contract terms likely to affect food, beverage and agricultural businesses
From 12 November 2016 the prohibition on unfair contract terms in standard form contracts will be extended to apply to contracts with small businesses. Currently, the law only applies to standard form consumer contracts.
The ACCC has specifically pointed out businesses in the agricultural sector as businesses that should review the existing contracts they have with farmers and small businesses. The ACCC has said that imbalances in bargaining power are common in agricultural supply chains and has developed videos to explain the new law. You can view the videos here.
A term that is unfair will be void and a party will not be able to rely upon it. Supermarkets and other food and beverage businesses that use standard form contracts in their commercial dealings with suppliers should consider whether they need the terms of their existing contracts to be reviewed and potentially revised. Learn more about when a term may be 'unfair'
Complaints by small businesses to the ACCC continue to rise
The ACCC has released its six-monthly report on small business, franchising and agriculture news. The report found there had been an increase in complaints by small businesses, a decline in franchising complaints and, between January to June 2016, 137 complaints related to agriculture. You can view the Small Business in Focus report here.
For small businesses, the key consumer law complaints related to misleading conduct, false representations and consumer guarantees, while the key competition law complaints related to misuse of market power and exclusive dealing. The extension of the unfair contracts terms regime, the new country of origin labelling requirements and the upcoming changes to credit card surcharging laws are all matters that are likely to affect small businesses. Food and beverage businesses that deal with small businesses should consider whether any of their business practices need to be revised to comply with these changes to the law.
Productivity Commission releases draft report on the Regulation of Agriculture
The Productivity Commission has released its Draft Report regarding the regulation of Australian agriculture. The Commission has found that farm businesses are subject to regulations at every stage of the supply chain, that some regulations lack a sound policy justification and should be removed, and that other regulations need to be reformed to meet their objectives. It has developed suggestions for how governments could reduce the regulatory burden on farm businesses.
The Commission has made 23 draft recommendations in areas including competition regulation, food regulation and foreign investment in agriculture. Written submission on the draft report are due by Thursday 18 August 2016. You can view the full report here.
On the horizon
There is significant focus on the Australian Consumer Law (ACL) not just by the ACCC through its enforcement proceedings against major companies, but also at a policy level with two key reviews of the ACL currently underway.
Consumer Affairs Australia and New Zealand (CAANZ) is conducting a review of the provisions of the ACL. Read more
In addition the Productivity Commission is conducting a review of the administration and enforcement of the ACL. Read more