Matheson


News and Insights

Print this page

Search News & Insights


CCPC to Begin Investigating Grocery Goods Sector

AUTHOR(S): Kate McKenna
KEY CONTACT(S): Emma Doherty, Nicola Dunleavy, Michael Finn, Helen Kelly, Brian McCloskey, Madeline McDonnell, Patrick Spicer
PRACTICE AREA GROUP: Food and Beverage
DATE: 06.09.2018

Summary

The Irish regulator has announced a strategic priority to use its powers to investigate whether retailers and wholesalers are complying with 2016 groceries regulations.  Groceries businesses should therefore pay extra attention to the regulations and the prospect of investigation and / or prosecution.

The law

Large grocery goods retailers and wholesalers have obligations intended to ensure ‘fair dealing’ with suppliers under the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (the “Regulations”).

The Competition and Consumer Protection Commission (the “CCPC”) is responsible for monitoring compliance with the Regulations pro-actively and in response to complaints.  A business found to be in breach of the Regulations may face prosecution, with potential penalties ranging from:

  • on a first summary conviction, a fine of up to €3,000 or six months imprisonment or both; to
  • on a second or subsequent conviction on indictment, a fine of up to €100,000 or two years imprisonment or both.

To date, the CCPC has not prosecuted under the Regulations.  That looks set to change, however, with the CCPC identifying compliance with the Regulations as a priority in its recently published Annual Report; and with Chairperson Isolde Goggin recently stating that the CCPC is now “moving into an area of inspections” within the grocery goods sector.

The grocery goods sector is also a priority on the EU and Irish legislative agenda.  A draft EU Directive on unfair trading practices was published by the EU Commission on 12 April 2018 and there has been an Irish public consultation on how to implement this EU legislation in Ireland (see Matheson response here once published).  One possible change following new EU legislation is that the CCPC will have an additional power to impose an administrative fine on retailers and wholesalers for non-compliance.

Now is therefore an opportune time for retailers and wholesalers of grocery goods to carry out a compliance check and avoid facing investigation and / or penalties.

Reminder: What obligations are imposed by the Regulations?

(a) Have a written and signed contract in place: “Grocery goods” contracts must be recorded in writing using clear understandable language and must be signed and retained by each party.

(b) Force Majeure: Parties to “grocery goods” contracts shall not be liable for delay or failure to perform which results from circumstances beyond the reasonable control of that party.

(c) Unilateral Variation: Retailers or wholesalers may not vary, terminate or renew a “grocery goods” contract unilaterally unless this is expressly provided for with a reasonable prior notice period.

(d) Third Party Procurement: Retailers or wholesalers may not require a supplier to obtain goods and services from a third party from whom the retailer or wholesaler receives a payment, unless those goods or services offer superior value or the current provider is not meeting reasonable standards.

(e) Forecasts: Retailers or wholesalers shall, on the request of and in consultation with a supplier, provide a forecast of the “grocery goods” likely to be required in respect of a given future period.

(f) Payment: Unless expressly provided for otherwise by written contract, retailers or wholesalers shall pay suppliers within the later of: (i) 30 days of receipt of any invoice; and (ii) the date of delivery.

(g) Restrictions on Financial Conditions: Subject to a number of exceptions, a retailer or wholesaler may not compel a supplier to pay for stocking; promotions; marketing; retention, increased allocation or positioning; advertising / display; wastage; or shrinkage.

(h) Compliance Programme:

Retailers or wholesalers are required to:

  • have designated and trained compliance officers;
  • have a designated person (compliance officer) for liaison with the CCPC on compliance;
  • submit an annual compliance report to the CCPC by 31 March of the following year; and
  • maintain certain records, for a period of six years after the financial year to which they relate.

Please contact Kate McKenna of our Food and Beverage Team with any queries.

BACK TO LISTING



About cookies on our website

Following a revised EU directive on website cookies, each company based, or doing business, in the EU is required to notify users about the cookies used on their website.

Our site uses cookies to improve your experience of certain areas of the site and to allow the use of specific functionality like social media page sharing. You may delete and block all cookies from this site, but as a result parts of the site may not work as intended.

To find out more about what cookies are, which cookies we use on this website and how to delete and block cookies, please see our Which cookies we use page.

Click on the button below to accept the use of cookies on this website (this will prevent the dialogue box from appearing on future visits)