Keeping Supermarkets in Check – Lessons Learned from the First Adjudication
The Grocery Industry Dispute Resolution Scheme is a cost-effective way to ensure supermarkets are complying with their obligations under the Grocery Supply Code. That is our overall conclusion from acting for a supplier in the first adjudication under the Scheme.
We set out below what the scheme is, and the observations/lessons learned during the process.
What is the Grocery Industry Dispute Resolution Scheme?
A dispute resolution scheme designed to provide suppliers with a quick and effective way to resolve disputes with their supermarket customers was introduced in the Grocery Industry Competition Act 2023 (GICA).
The Grocery Industry Dispute Resolution Scheme is administered by the New Zealand Dispute Resolution Centre (NZDRC) and the Scheme Rules are available on its website1.
Under the scheme, suppliers or wholesale customers can refer a dispute to mediation or adjudication if the dispute:
- is with a regulated grocery retailers (being Foodstuffs North Island, Foodstuffs South Island and Woolworths and their related companies);
- relates to the Grocery Supply Code or wholesale access regime in the GICA; and
- is under $5 million.
Lessons learned
The first determination by an adjudicator has recently been issued2. We acted for the supplier in this process and make the following observations:
- It is important to prepare your claim carefully, as all documents, including witness statements and submissions must be filed with the Claim within 5 working days of applying under the Scheme.
- The process was smooth and efficient.
- There is no cost to the supplier, other than its own legal fees.
- There is a degree of flexibility, with the adjudicator able to determine the process.
- The dispute was determined in a much shorter time frame than if court proceedings were issued.
- The adjudicator was engaged and provided clear guidance on good faith, reasonable notice and genuine commercial reasons.
- However, the strict confidentiality requirements mean that guidance is unfortunately not available for other industry participants.
Overall, we consider that the Scheme is a useful tool for suppliers to enforce their rights and hold the supermarkets to their obligations under the Grocery Supply Code. We would encourage suppliers to consider using this tool.
If you have any questions, please feel free to reach out.
References: