The deadline for submissions on the proposed grocery regulations is Friday 27 February 2015

It is very likely that new rules will be put in place for the grocery sector. The Minister for Jobs, Enterprise and Innovation has published a draft of the proposed statutory instrument which will set out the rules. The Minister has asked for comments on the draft by the end of February. This A&L Goodbody client bulletin sets out key points of the proposed statutory instrument.

Everyone supplying food and drink in the grocery sector is well used to rules and regulations. It is useful to be able to influence and shape new laws before they are adopted. The Irish grocery sector has a unique opportunity to influence the new grocery goods regulations because the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, has invited submissions before “close of business”, 27 February 2015, on the proposed grocery regulations. The draft statutory instrument is available at http://www.djei.ie/publications/commerce/2014/ggu_draft_regs.pdf

Key points

  • Relationships in the grocery sector are likely to be altered by a new statutory instrument (i.e. ministerial order) which the Minister has circulated for consultation.  Business should take the opportunity to give its views, positive or negative, to the Minister in order to influence the final measures.  
  • The regulations would apply to “grocery goods” which cover food and drink for carry out sale (rather than on-premises consumption) from grocery goods undertakings.  
  • Special rules apply to “relevant grocery goods undertakings” which have a worldwide annual turnover of more than €50m.  
  • Trading relationships will have to be conducted “in good faith and in a fair, open and transparent manner”.  
  • All of the terms and conditions of a grocery goods contract must be “in plain intelligible language and recorded in writing”.  
  • Contracts used by a “relevant grocery goods undertaking shall require a written copy of any grocery goods contract to be signed by the supplier and the undertaking”.  
  • Variations of contracts by a “relevant grocery goods undertaking” must be provided for in the contract and with written reasonable notice.  
  • Parties to a grocery goods contract with a “relevant grocery goods undertaking” shall not be “liable for delays or failure in the performance of the contract resulting from circumstances beyond the reasonable control of that party”.  
  • A relevant grocery goods undertaking must prepare forecasts and supply them to suppliers.  
  • Special rules are proposed for “payments” to stock grocery goods.  
  • Unless specified otherwise, payment shall be made to the supplier by the “relevant grocery goods undertaking” within 30 days of the date of receipt of the invoice.  
  • Reasonable notice must be given by the relevant grocery goods undertaking to vary “significantly” previously agreed arrangements.  
  • Special rules are set out for payments in connection with promotions, marketing costs, shelf space, advertising, wastage, shrinkage and customer complaints.  
  • The Regulations would also contemplate that a relevant grocery goods undertaking would designate and train “appropriate members of its staff to be responsible for compliance” with the proposed Regulations.

Technical points

  • The name of the proposed regulations would be the “Consumer Protection Act 2007 (Section 63B) (Regulation of Aspects of the Commercial Relationships between Suppliers and Relevant Grocery Goods Undertakings) Regulations 2015".  
  • No date has been set for entry into force but this will depend on various factors including the reaction to the draft and how long it would take to reach agreement on any changes which the Minister wishes to make following the consultation.  
  • The Regulations apply to contracts concluded after the date of entry into force so some businesses may wish to secure contracts before the new Regulations enter into force.

Action points

  • Ask your management team to study the proposed regulations and consider their implications. They will have implications across the board: financial; marketing; sales; packaging; complaints; training; compliance; delivery/logistics etc.  
  • Compile your views and opinions.  
  • Get legal advice on how best to express those views but how best they can influence the outcome (e.g., by using precedents from other jurisdictions and avoiding clashes with existing legislation).