20Unilateral variation of agreements

20 Unilateral variation of agreements

(1) A large grocery business must not vary a grocery supply agreement without the written consent of the supplier concerned.

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.

(2) Subsection (1) does not apply if: (a) the agreement includes a provision that: (i) provides expressly for the large grocery business to make the variation; and (ii) sets out clearly the changed circumstances in which the variation can be made; and (iii) if the variation involves a quantitative adjustment to the terms of supply—sets out the basis or methodology for calculating the adjustment; and (b) that provision of the agreement is an allowable contrary provision; and (c) the variation is made in accordance with the agreement; and (d) the variation is reasonable in the circumstances; and (e) the supplier is given reasonable notice, in writing, of: (i) the variation; and (ii) the terms of the variation; and (iii) the large grocery business’s reasons for making the variation. (3) For the purposes of (but without limiting) paragraph (2)(d), in determining whether the variation is reasonable in the circumstances, regard must be had to: (a) the benefits, costs and risks (if any) for the supplier and for the large grocery business; and (b) whether the variation is for a purpose that benefits both the supplier and the large grocery business. (4) A large grocery business that wishes to rely on subsection (2) must prove the matters in that subsection on the balance of probabilities (except in relation to whether the variation causes detriment to a supplier for the purposes of paragraph (2)(d)).