Grocery Code prompts a new kind of supermarket war

ALDI has become the first to sign the Grocery Code, less than a week after Woolworths claimed it would be the first to put pen to paper.

ALDI says it will transition existing suppliers to the new terms of the Grocery Code by 3 August 2015 and new suppliers will agree to the new terms from 15 June 2015.

A spokesperson from Woolworths says the supermarket “has recently written to both Minister Billson and ACCC Chair Rod Simms indicating that, assuming the Code clears the Senate, we will sign the Code on July 1.”

According to the Grocery Code, after a wholesaler signs the Code, it has 18 months to offer its suppliers in writing to vary their agreement so that it conforms to the requirements of the Code.

If the supplier concerned accepts the offer, the wholesaler then has six months to vary the agreement.

So ALDI’s suppliers will see the changes by 3 August at the latest, the Code allows Woolworths up to two years to vary its supplier’s agreements.

In today’s announcement, an ALDI spokesperson said “We have always supported the concept of a strong and sustainable Australian grocery industry for retailers and suppliers. ALDI’s commitment to opt in to and implement the Code before any other major supermarket is testament to our business values and dedication to quality supplier relationships.”

ALDI said the spirit of the Code reflects its current practice with suppliers: forging long term, sustainable relationships and working in partnership to provide Australian shoppers with high-quality products at permanently low prices.

The voluntary code prohibits specific types of unfair conduct by retailers and wholesalers in their dealings with suppliers and provides a clearer framework for these dealings.

Currently, The Code has been tabled in Parliament as a regulation under the Competition and Consumer Act 2010.


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