On 27 January 2016, the Minister for Jobs, Enterprise and Innovation (the "Minister") signed into law the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (the "Regulations"). The Regulations will come into effect on 30 April 2016.
The introduction of the Regulations follows many years of concern about the fairness of contractual arrangements between large retailers and wholesalers and their suppliers, including those in the dairy and meat industry. The outcome for the grocery sector is the introduction of a statutory regime backed up by public enforcement powers and criminal sanctions, despite historic calls by industry for a voluntary 'code' and historic calls by the Irish competition authority, now known as the Competition and Consumer Protection Commission ("CCPC"), for a supplier-led private enforcement regime.
The Regulations impose new obligations on retailers or wholesalers who, either alone or as part of a group, have an annual worldwide turnover in excess of 50 million. The Regulations apply to these parties' arrangements with suppliers for the purchase of "grocery goods". Failure to comply can result in criminal prosecution including the imposition of fines and terms of imprisonment for relevant directors and officers of the companies concerned.
The Minister also published draft guidelines aimed at providing practical guidance as regards the operation of the Regulations. The Minister has invited stakeholders to comment on the content of these guidelines before close of business on Monday 29 February 2016.
Need to Know
Who and What is Likely to be Directly Affected?
The Regulations impose obligations on "relevant grocery goods undertakings" ("GGUs") in their relationships with suppliers. GGUs are retailers or wholesalers of "grocery goods" (excluding food service / catering businesses) who, either alone or as part of a group, have an annual worldwide turnover in excess of50 million. The number of grocery businesses operating in Ireland who could be GGUs to whom the Regulations apply is wide. This is because the adoption of a worldwide as opposed to an Ireland-wide turnover test means that the Regulations will apply to any small Irish "grocery goods" retailer or wholesaler that is owned by a larger business in Ireland or abroad. This is in contrast to the position in the UK, where the Groceries Supply Code of Practice currently applies to ten "designated retailers" only and has been structured so...