19Matters to be covered by agreements

19 Matters to be covered by agreements

(1) A large grocery business must not be a party to a grocery supply agreement that relates to the supply of grocery products unless the agreement includes the following: (a) any requirements the large grocery business has in respect of the delivery of the grocery products; (b) for grocery supply agreements that do not relate to the supply of fresh produce—any circumstances in which the large grocery business may reject the grocery products; (c) the period within which the large grocery business must pay a supplier for the grocery products and the circumstances in which any payment, or part of a payment, may be withheld or delayed; (d) if the agreement is intended to operate for a limited time only—the term of the agreement; (e) in clear terms, any quantity and quality requirements relating to the grocery products; (f) if the agreement provides for its termination—the circumstances in which it may be terminated.

Note: A large grocery business must accept fresh produce delivered in accordance with a grocery supply agreement unless certain conditions are met: see section 34.

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) Paragraph (1)(e) does not prevent the parties to the grocery supply agreement from later agreeing, in writing and in clear terms, to additional or different quantity and quality requirements relating to the grocery products. Reasonable exceptions to Code protections (3) A large grocery business must not be a party to a grocery supply agreement that includes a provision contrary to any of the following protective provisions of this Code: (a) subsection 20(1) (unilateral variations); (b) subsection 22(2) (set‑offs); (c) subsection 24(1) (payments to cover wastage); (d) subsection 25(1) (payments for stocking or listing); (e) subsection 26(1) (payments for better positioning etc.); (f) subsection 27(1) (payments for ordinary business activities); (g) subsection 28(1) (payments for funding promotions); unless the agreement: (h) identifies the contrary provision of the agreement and the protective provision of this Code; and (i) includes a clear statement to the effect that the contrary provision is an exception to, and removes the protection of, the protective provision; and (j) explains why the contrary provision is reasonable.

Civil penalty:

(a) for a contravention by a body corporate—3,200 penalty units; or
(b) for a contravention by a person who is not a body corporate—640 penalty units.

Additional requirements for agreements that relate to fresh produce (4) A large grocery business must not be a party to a grocery supply agreement relating to the supply of fresh produce unless the agreement specifies the price, or the method or formula to be used to determine the price, of the fresh produce.