Part 3: Is the grocery retailer's 'ask' reasonable in the circumstances?

Thursday 30 November, 2023

Download Part 3: Is the grocery retailer's 'ask' reasonable in the circumstances?

This T|W Insights is the final in our three-part weekly series on the Grocery Supply Code (Code). View Part 1 and Part 2 here.

But first, an announcement from the new coalition government and then a quick recap of the Grocery Supply Code Series:

In Part 3, we consider what is 'reasonable in the circumstances' and some factors to help a supplier evaluate whether an ‘ask’ by a regulated grocery retailer (grocery retailer) is 'reasonable in the circumstances'.

Certain conduct under the Code is prohibited, unless that conduct is permitted in the supply contract and the conduct is 'reasonable in the circumstances'. For example, a grocery retailer cannot require a supplier to fund the costs of a product promotion, unless it is provided for under the supply contract and the supplier’s contribution to the promotion is 'reasonable in the circumstances'. The commercial tension on this issue between the supplier and the retailer will be:

• how is reasonableness determined; and
• from whose perspective?

The Code only gives general guidance on the types of factors that must be considered when determining what is 'reasonable in the circumstances'.  Here are some other factors to think about:

If you have any questions about the Code or would like more information, please get in touch with one of our experts below.