Grocery goods regulations signed into law
Department believes new measures combined with strong enforcement powers will ensure relationships in the grocery sector are fair and sustainable
1 February 2016
Minister for Jobs, Enterprise and Innovation, Richard Bruton has signed into law an initial set regulations aimed at regulating certain practices in the grocery goods sector.
The Department states the aim of these regulations is to rebalance relationships between different players in the grocery goods sector, and ensure that dealings in the sector are fair and sustainable and operate in the interests of jobs, consumers and sustainable safe food.
The following provisions covering food and drinks are covered in the legislation:
- Grocery goods contracts will be required to be in writing
- Contracts cannot be varied or terminated except with express consent of both parties
- Suppliers cannot be obliged to obtain goods/services from a third party from whom a retailer/wholesaler receives payment for this arrangement
- Provisions to deal with ‘force majeure’, non-performance due to circumstances beyond the parties’ reasonable control
- Suppliers can require retailer/wholesaler to provide forecast of the goods that will be needed
- Prohibition on suppliers being required to pay for stocking/listing goods; for promotion; for marketing costs; for better positioning on shelves; for advertising; for wastage; for shrinkage – except in strictly specified circumstances, based on free agreement between the parties, based on written contract, and based on an objectivement measurement of costs born by the retailer/wholesaler
- Suppliers must be paid for goods within 30 days
- Measures to ensure compliance by retailers/wholesalers, including – requirement that staff be designated and trained as responsible for compliance; requirement for retailers/wholesalers to submit an annual compliance statement; requirement for records to be retained by each retailer/wholesaler
The Competition and Consumer Protection Commission (CCPC) has substantial powers under the Consumer Protection Act 2007 to enforce compliance with these regulations, including a graded system of penalties up to a fine of €100,000 or two years in prison, as well as a provision explicitly enabling suppliers to take proceedings for damages (including exemplary damages) in the Circuit Court.
These regulations will enter into force on 30 April 2016 which the government believes will allow retailers and wholesalers enough time to ensure that their systems and procedures abide by the regulations.
Minister Bruton commented: “Relationships will continue to be based on commerce and prices will continue to be set by hard negotiations – this is in the interests of consumers. However new legal provisions will require that in future, contracts must be in writing, certain terms must be included, records must be retained for inspection and a compliance statement must be made. These measures together with strong enforcement powers will ensure that these relationships are fair and sustainable.”