ACCC to investigate Woolies, Aldi on grocery code

aldiThe ACCC is investigating how supermarkets are implementing the new grocery code of conduct, singling out Woolworths and Aldi.

The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings.

It complements existing protections for suppliers under the Competition and Consumer Act 2010, including the unconscionable conduct provisions.

Coles, Woolworths, Aldi, and Sydney-based retailer, About Life, have signed up to the code, which came into effect in March 2015.

ACCC chairman, Rod Sims, said, the aim of the code is to redress the imbalance in bargaining power that can exist between suppliers and large grocery retailers by prohibiting certain types of unfair conduct.

“The Code imposes a duty to deal with suppliers in good faith and we are concerned by reports we have received from suppliers that suggest that some retailers have not got off to a good start when it comes to implementing the Code,” Sims said.

“The ACCC has concerns as to the manner in which some retailers, in particular Woolworths and Aldi, are presenting new Grocery Supply Agreements (GSAs), which might give the impression that the supplier is not able to negotiate the terms of the GSA.

“The ACCC is also concerned about the low level of detail provided in some GSAs about the circumstances in which certain payments may arise.”

The code requires that retailers offer code-compliant GSAs. The ACCC said, suppliers should not feel compelled to sign these agreements and should seek advice before signing them. In particular, the code will confer protections on suppliers 12 months after a retailer has signed up to the code, regardless of whether a supplier has accepted a code-compliant GSA.

The ACCC has written to retailers about the manner in which they purport to be giving effect to the code. The retailers have responded providing their new GSAs and the correspondence they have sent to suppliers offering the new GSAs. The ACCC will continue to monitor compliance with the code.

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