27Payments for ordinary business activities

27 Payments for ordinary business activities

(1) A large grocery business must not directly or indirectly require a supplier to make any payment towards the costs of any activity (an ordinary business activity) that is undertaken by the large grocery business in the ordinary course of carrying on a large grocery business.

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) Without limiting subsection (1), an ordinary business activity includes each of the following: (a) a member of a buying team’s visit to the supplier; (b) artwork or packaging design; (c) consumer or market research; (d) the opening or refurbishing of a store; (e) hospitality for the staff of the large grocery business. (3) Subsection (1) does not apply if: (a) a provision of the relevant grocery supply agreement expressly provides for the payment; and (b) that provision of the agreement is an allowable contrary provision; and (c) the payment is made in accordance with the agreement; and (d) the payment is reasonable in the circumstances. (4) For the purposes of (but without limiting) paragraph (3)(d), in determining whether the payment is reasonable in the circumstances, regard must be had to: (a) the likely and actual 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 (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 paragraph (3)(d)).