The Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (“Grocery Regulations”) come into operation on 30 April 2016 and apply to grocery goods contracts entered into on or after that date. To help ensure compliance with the regulation familiarise yourself with the requirements, understand the obligations and make the necessary changes. Below is a summary of the published information.
The Competition and Consumer Protection Commission (“the Commission”) was established on 31 October 2014, and is now the statutory body responsible for enforcing consumer protection and competition law in Ireland.
The Commission is responsible for enforcing a wide range of consumer legislation and protects consumers from unfair business prioritising their actions in those areas where there is greatest consumer detriment. They hold businesses to account by using the full range of enforcement tools available to them.
On the 1 February 2016 the Commission began its role as enforcer of the new Grocery Regulations and there is a clear commitment to using the enforcement tools to create a culture of compliance in the grocery sector to benefit consumers and businesses.
Who do the Regulations apply to and what is the significance?
The Grocery Regulations apply to retailers and wholesalers of food and drink in Ireland who have a worldwide turnover in excess of €50 million. Grocery businesses are now obliged to assess whether the regulations apply to them.
Retailers and wholesalers of food and drink who may be subject to the Grocery Regulations now need to assess whether their business is a “relevant grocery goods undertaking” within the meaning of the Grocery Regulations and to inform the Commission if this is the case.
Such retailers and wholesalers will be required to ensure that all new and revised contracts with suppliers are in writing on or after 30 April 2016.
The Regulations prohibit retailers and wholesalers from seeking payments from suppliers for promotions, shelf space, marketing, wastage and shrinkage costs unless these payments are provided for in the contracts.
Affected retailers and wholesalers will be obliged to demonstrate their compliance with the regulations in an annual compliance report to the Commission and to maintain records of their dealings with suppliers, for inspection by the Commission.
Affected retailers and wholesalers will be required to appoint and train members of staff to be responsible for compliance with the regulations and to inform other members of staff about the implementation of them within the business.
Affected retailers and wholesalers must appoint a “liaison officer” to deal directly with the Commission.
What are the consequences of non-compliance?
The Commission has substantial powers to enforce compliance which includes a graded system of penalties up to a fine of €100,000 or 2 years in prison, as well as a provision explicitly enabling suppliers to take proceedings for damages (including exemplary damages) in the Circuit Court.
Do you need to take action before 30 April 2016?
The Regulations govern important aspects of the contractual relationships that food and drink suppliers have with retailers and wholesalers therefore retailers and wholesalers need to ensure that their systems and procedures are in order to allow them to abide by the Regulations. It has been recommended that suppliers should become familiar with the Regulations; engage with retailers and wholesalers about the changes that are being introduced and get in touch with their representative body and see what materials and training they can provide to assist you.
For further detailed information relating to the above please view the website of the Competition and Consumer Protection Commission