Food & Grocery Code of Conduct is now mandatory

The Food and Grocery Code of Conduct (the Code) is now mandatory for Australia’s largest supermarkets and grocery wholesalers.

The Code, to be enforced by the Australian Competition and Consumer Commission (ACCC), sets out the rules for how supermarkets and wholesalers negotiate and contract with suppliers. It requires them to have written supply agreements in place, act lawfully and in good faith towards their suppliers, and ensure suppliers do not face retribution for exercising their rights under the code. Large supermarkets and wholesalers now face significant penalties for contraventions of the updated code.

The additional requirements under the mandatory Code are expected to increase protection for suppliers through:

🛒 Prohibiting and protecting against retribution.

🛒 Requiring senior managers of large grocery businesses to oversee supplier interactions.

🛒 Requiring large grocery businesses to appoint a Code Mediator.

🛒 Requiring the appointment of a Code Supervisor which can independently review the processes of Code Mediators on request.

🛒 Requiring incentive schemes run by large grocery businesses to be consistent with the purposes of the Code.

🛒 Including a larger section on Alternative Dispute Resolution (ADR) processes available to suppliers.

🛒 Requiring notification to the ACCC when a grocery business becomes a large grocery business within the relevant financial year.

🛒 Confidentiality requirements for Code Mediators, Code Supervisors and parties to an ADR process.

The changes make the code mandatory for all retailers and wholesalers that earned over $5 billion from their supermarket or grocery wholesaling businesses in the previous financial year. Suppliers to those retailers and wholesalers are automatically protected by the code.

The ACCC will now be able to issue infringement notices and take court action seeking penalties against businesses that contravene the code. For the most harmful contraventions, this includes a maximum penalty per contravention that will be the greater of $10 million, or 3 times the value of the benefit derived, or, if that value cannot be determined, 10% of the company’s turnover during the preceding 12 months.

The ACCC has also launched a new online portal for people to make anonymous reports about potential contraventions of the code. Access this by using the short link or QR code provided – access it HERE.

Businesses can also continue to make reports via the ACCC’s Infocentre to report an issue affecting your business HERE.

Guidance on the updated code, including the ACCC’s approach to enforcement and compliance actions, is available from the ACCC website HERE.

This article appears as part of the 11 April 2025 issue of the Guacamole enewsletter.

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