A grocery supply agreement is an agreement between a supplier and a retailer or wholesaler for the supply of groceries to a supermarket business.
A grocery supply agreement is not just the principal agreement and documents made under that agreement — it includes any contracts or agreements between a retailer or wholesaler and a supplier that relate to the supply of groceries. These other documents may include:
A grocery supply agreement must be in writing.
It is good practice to keep written records of conversations with retailers and wholesalers when negotiating a grocery supply agreement. When an agreement is reached, get confirmation in writing of what was agreed.
A grocery supply agreement must set out:
A grocery supply agreement is varied, renewed or extended if the retailer or wholesaler takes any action to change, adjust or continue it. For example, if they submit a new purchase order under the terms of an existing grocery supply agreement.
The Food and Grocery Code of Conduct limits the ability of retailers or wholesalers to vary a grocery supply agreement. Specifically, one-sided or retrospective variations are limited.
Whether the grocery supply agreement can be varied individually or retrospectively depends on when the agreement was made.
Grocery supply agreements that were made before 3 October 2020 and were not varied, renewed or extended after the amendments to the code commenced on 3 October 2020 — the retailer or wholesaler is generally only able to make these types of changes if the grocery supply agreement allows them to do so, and the change is reasonable.
Grocery supply agreements that come into force on or after 3 October 2020, and existing grocery supply agreements that are varied, renewed or extended after 3 October 2020 — retrospective variations are banned and parties to these grocery supply agreements cannot agree to opt out of the ban.
Retailers or wholesalers can only make unilateral variations to grocery supply agreements if several conditions are met including that the grocery supply agreements allows them to do so, and the change is reasonable.