New regulations for the grocery goods sector has been signed into law by jobs minister Richard Bruton today, dealing with contracts, supplier practices and other areas.

The government said that the regulations are aimed at rebalancing relationships between different players in the grocery goods sector, as well as ensuring that dealings in the sector are fair and sustainable, and operate in the interests of jobs, consumers and sustainable safe food.

Among the areas addressed by the regulations, which cover food and drink products:

• Grocery goods contracts will be required to be in writing.
• Contracts cannot be varied or terminated except with express consent of both parties.
• Suppliers cannot be obliged to obtain goods/services from a third party from whom a retailer/wholesaler receives payment for this arrangement.
• Suppliers can require a retailer/wholesaler to provide a forecast of the goods that will be needed.
• The regulations prohibit retailers and wholesalers from seeking payments from suppliers for promotions, shelf space, marketing, wastage and shrinkage costs - unless these payments are provided for in the contracts..
• Suppliers must be paid for goods within 30 days.

Enforcement

The Competition and Consumer Protection Commission has the power to enforce compliance with these regulations, including a graded system of penalties up to a fine of €100,000 or two years in prison, as well as a provision explicitly enabling suppliers to take proceedings for damages (including exemplary damages) in the Circuit Court.

In Association with

The new regulations will come into force on April 30 2016, to allow retailers and wholesalers enough time to ensure that their systems and procedures are in order.

Bruton declared: “These regulations will focus on food and drink, which have clearly been the products on which there has been most concern expressed.

“Relationships will continue to be based on commerce and prices will continue to be set by hard negotiations – this is in the interests of consumers. However, new legal provisions will require that in future contracts must be in writing, certain terms must be included, records must be retained for inspection and a compliance statement must be made.

“These measures, together with strong enforcement powers, will ensure that these relationships are fair and sustainable.”

Compliance Report

The regulations only apply to those retailers and wholesalers who have, or are part of undertakings that have, a worldwide turnover in excess of €50 million. Such retailers and wholesalers will be required to ensure that all new and revised contracts with suppliers are in writing on or after 30 April 2016.

Affected retailers and wholesalers will be obliged to demonstrate their compliance with the regulations in an annual compliance report to the Commission and to maintain records of their dealings with suppliers, for inspection by the Commission.

Affected retailers and wholesalers will be required to appoint and train members of staff to be responsible for compliance with the regulations and to inform other members of staff about the implementation of them within the business.

Affected retailers and wholesalers must appoint a liaison officer to deal directly with the Commission.