25

25 Payments as a condition of being a supplier

(1) A large grocery business must not directly or indirectly require a supplier to make any payment (other than a payment in relation to a promotion) as a condition of stocking or listing grocery products.

Note: For payments made in relation to promotions, see section 28.

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 in relation to a large grocery business that is a retailer if: (a) the relevant grocery supply agreement includes a provision that provides expressly for the payment to be made; and (b) that provision of the agreement is an allowable contrary provision; and (c) the payment: (i) is made in accordance with the agreement; and (ii) is made in respect of grocery products that have not been stocked or listed by the retailer during the preceding 365 days in 25% or more of its stores; and (iii) is reasonable in the circumstances. (3) Subsection (1) does not apply in relation to a large grocery business that is a wholesaler if: (a) the relevant grocery supply agreement includes a provision that provides expressly for the payment to be made; and (b) that provision of the agreement is an allowable contrary provision; and (c) the payment: (i) is made in accordance with the agreement; and (ii) is made in respect of grocery products that have not been stocked or listed by the large grocery business during the preceding 365 days in 25% or more of its distribution centres; and (iii) is reasonable in the circumstances. (4) For the purposes of (but without limiting) subparagraph (2)(c)(iii) or (3)(c)(iii), in determining whether the payment 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 payment is for a purpose that benefits both the supplier and the large grocery business. (5) A large grocery business that wishes to rely on subsection (2) or (3) must prove the matters in that subsection on the balance of probabilities (except in relation to whether the payment causes detriment to a supplier for the purposes of subparagraph (2)(c)(iii) or (3)(c)(iii).