Retailers and wholesalers required to take action as new grocery regime commences
February 1, 2016
- Competition and Consumer Protection Commission begins formal role as enforcer of the new Grocery Regulations
- Grocery businesses required to assess whether they reach applicable threshold
The Competition and Consumer Protection Commission (“the Commission”) has today begun its role as enforcer of the new Grocery Regulations, following the publication of the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (“Grocery Regulations”) by the Minister for Jobs, Enterprise and Innovation, Richard Bruton T.D.
The regulations apply to retailers and wholesalers of food and drink in Ireland who have a worldwide turnover in excess of €50 million. Grocery businesses are now obliged to assess whether the regulations apply to them. One of the key requirements of the Grocery Regulations is that all new or renewed contracts between retailers or wholesalers and suppliers will have to be put in writing. These regulations come into effect from 30 April 2016.
Commenting, Isolde Goggin, Chairperson of the Commission said, “Our mission is to make markets work better for businesses and consumers alike. The Commission will use its powers to ensure compliance with the legislation, which brings predictability and certainty into the relationships between suppliers and grocery businesses in Ireland. This will be achieved through the requirement to have written contracts and the prohibiting of certain supplier payments unless they are provided for in a contract. The regulations also require suppliers to be paid within 30 days unless otherwise agreed during contract negotiations. 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.”
A period of three months has been allowed to enable businesses to familiarise themselves with the requirements placed on them. During this time the Commission will engage with retailers and wholesalers to advise them of their obligations and to provide guidance to them in making the necessary changes, to ensure their compliance with the regulations. The Commission’s website provides guidance for retailers, wholesalers and suppliers and will be updated on an ongoing basis.
Isolde Goggin, Chairperson of the Commission concludes, “We have a significant engagement programme planned which will provide affected grocery businesses with the necessary knowledge they need to put in place the required compliance structures. The new Grocery Regulations are an important addition to the enforcement tools we have at our disposal and we are committed to using all of our powers to create a culture of compliance in the grocery sector to benefit consumers and businesses.”
Notes to the editor:
Information about the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016
The regulations govern important aspects of the contractual relationships that food and drink suppliers have with retailers and wholesalers.
What is required of retailers and wholesalers when the new regulations come into effect?
These 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.
- 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.
- 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.
When the regulations come into effect the Commission will have powers to:
- Monitor whether the affected retailers or wholesalers are complying with the legislation.
- Investigate complaints, with supporting evidence, into potential breaches of the regulations.
- Issue a Contravention Notice directing a retailer or wholesaler to comply with the regulations.
- Initiate enforcement proceedings against a retailer or wholesaler who fail to comply with a Contravention Notice or who breach the regulations.
Department of Jobs, Enterprise and Innovation – Draft Guidelines
The Minister for Jobs, Enterprise and Innovation Mr. Richard Bruton T.D. has also published draft Guidelines accompanying the Grocery Regulations. The Guidelines aim to provide further information and guidance on the different provisions of the regulations. Interested parties can provide feedback on the Guidelines to the Department of Jobs, Enterprise and Innovation until 29 February 2016.
The Competition and Consumer Protection Commission
The Competition and Consumer Protection Commission was formed on 31 October 2014 following the amalgamation of the Competition Authority and the National Consumer Agency. On that day the Competition and Consumer Protection Act 2014 came in to force. The Commission has a dual mandate to enforce competition and consumer protection law and we work to: protect and strengthen competition, empower consumers to make informed decisions and protect them from harmful business practices.
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