Coles and Woolies agree on Food and Grocery Code

Coles and Woolworths have reached an agreement with the Australian Food and Grocery Council (AFGC) on the terms of a food and grocery industry code of conduct.

The parties came to an agreement after many months of discussions. The AFGC says the agreement highlights constructive dialogue and goodwill across the sector, and hopes other retailers and industry groups will also agree to the code.

The Food and Grocery Code will establish a set of principles for trading relationships between retailers and suppliers and aims to provide greater certainty and clarity about dealings in the industry.

Key aspects of the code include:

• Tough restrictions on retrospective and unilateral variations to grocery supply agreements.
• Greater transparency on the basis of shelf allocation for branded and private label products.
• Recognition of the importance of intellectual property rights and confidentiality in driving innovation and investment in new products.
• A low-cost and fast-track dispute resolution mechanism.

The AFGC has proposed that the Food and Grocery Code will be prescribed by the federal government under the Competition and Consumer Act.

The draft code is available here.