Grocery rules that provide ‘safeguard’ for suppliers signed into law

New regulations aimed at protecting suppliers and rebalancing relationship with major retailers and wholesalers have been signed into law.

The long-awaited regulations will place a number of responsibilities on retailers and wholesalers with worldwide turnover of €50m or more, in order to protect their suppliers.

One of the key requirements is all new or renewed contracts between retailers or wholesalers and suppliers will have to put in writing, while suppliers must also be paid within 30 days.

“In 2014, through the Competition and Consumer Protection Act, powers were provided to introduce strong regulations to govern relationships in this area,” said Enterprise Minister Richard Bruton.

“There is potentially a real inequality between these players which can be abused in a manner not in the interests of jobs, consumers or sustainable safe food.

“I am now signing an initial set of regulations into law which… will guard against abuse.

These regulations will focus on food and drink, which have been the products on which there has been most concern expressed.”

Other requirements include:

• Contracts cannot be varied or terminated except with express consent of both parties;
• Suppliers can require a retailer or wholesaler to provide forecasts of the goods that will be needed
• Provisions to deal with non- performance of duties due to circumstances beyond parties’ control;
• Retailers and wholesalers cannot seek payment from suppliers for promotions, shelf space, marketing, wastage and shrinkage costs unless provided for in the contracts.

The regulations come into force on April 30 with the Competition and Consumer Protection Commission (CCPC) responsible for enforcement.

“The new Grocery Regulations are an important addition to the enforcement tools at our disposal and we are committed to using all of our powers to create a culture of compliance in the grocery sector to benefit consumers and businesses,” said CCPC chairwoman Isolde Goggin.

The regulations were welcomed by the Ibec-affiliated Food and Drink Industry Ireland, which last week called for their “urgent” introduction after Tesco was found to have seriously breached the UK’s groceries supply code of practice by short-changing suppliers in order to protect its own finances.

The Irish Farmers Association (IFA) also welcomed the new rules but said serious flaws remained.

“We have waited the lifetime of this Government to have this initial set of regulations signed into law.

"They contain important safeguards for suppliers… however, the absence of a ban on below-cost selling is a serious weakness,” said IFA national chairman Jer Bergin.

The establishment of a retail Ombudsman also remains a key objective, he added.