16Obligation to deal with suppliers lawfully and in good faith

16 Obligation to deal with suppliers lawfully and in good faith

(1) A large grocery business must at all times deal with suppliers: (a) lawfully; and (b) in good faith within the meaning of the unwritten law as in force from time to time.

Civil penalty:

(a) for a contravention by a body corporate—the amount under section 14A; or
(b) for a contravention by a person who is not a body corporate—$500,000.

(2) However, paragraph (1)(b) does not apply to a large grocery business at a particular time, in relation to a supplier and a matter, if: (a) at that time, the supplier is a large supplier; and (b) the supplier has not dealt with the large grocery business in good faith in relation to that matter or a matter of that kind. (3) In determining whether the large grocery business has acted in good faith in dealing with a supplier, the following may be taken into account: (a) whether the large grocery business has acted honestly; (b) whether the large grocery business has cooperated to achieve the purposes of the relevant grocery supply agreement; (c) whether the large grocery business has not acted arbitrarily, capriciously, unreasonably, recklessly or with ulterior motives; (d) whether the large grocery business has not engaged in retribution against the supplier; (e) whether the large grocery business has conducted its trading relationship with the supplier without duress; (f) whether the trading relationship of the large grocery business with the supplier has been conducted in recognition of the need for certainty regarding the risks and costs of trading, particularly in relation to production, delivery and payment; (g) whether the large grocery business has observed any confidentiality requirements relating to information disclosed or obtained in dealing with or resolving a complaint or dispute with the supplier; (h) whether, in dealing with the large grocery business, the supplier has acted in good faith. (4) Subsection (3) does not limit paragraph (1)(b). Meaning of large supplier (5) In this section, a supplier is a large supplier if the total revenue: (a) of the supplier and each related body corporate (if any) of the supplier; and (b) relating to the carrying on of a business of supplying grocery products for retail sale to consumers in Australia by another person; as set out in the supplier’s and any related body corporate’s annual accounts, prepared in accordance with generally accepted accounting principles, exceeds $1 billion for the previous financial year.

Note: For when a body corporate is related to another body corporate, see section 4A of the Act.