Groceries Code Act 2020
===

### 1. Title

This Act may be cited as the Groceries Code Act 2020.

### 2. Commencement

This Act comes into force on the day after receiving the Royal Assent.

### 3. Purpose

The purpose of this Act is to enable the Commerce Commission to establish a Groceries Code, which will be enforced by an Adjudicator.

### 4. Interpretation

In this Act—

**the Adjudicator** means the Groceries Code Adjudicator;

**dispute** means a dispute that arises as the result of a supplier taking action under the provisions within the Groceries Code following the belief that a breach of the Groceries Code has occurred;

**financial year** means—

> (a) the period beginning with the day on which the Act comes into force and ending with the following 31 March; and
>
> (b) each successive period of 12 months;

**Groceries Code** means the code established by the Commerce Commission under Section 6 of the Act;

**large retailer** means—

> (a) a designated retailer listed in the Groceries Code; or
>
> (b) any retailer with a turnover exceeding $1 billion with respect to the retail supply of groceries in New Zealand; or
>
> (c\) any person who carries on the whole, or a substantial part, of the business of any of the persons specified in subsections (a) and (b);

**Minister** means the Minister of the Crown appointed by warrant of the Prime Minister for the administration of this Act;

**supplier** means any person carrying on (or actively seeking to carry on) a business in the direct or indirect supply to any retailer of groceries for resale in New Zealand, and includes any such person established anywhere in the world, but excludes any person who is part of the same group of interconnected bodies corporate as the retailer to which it supplies;

**supply agreement** means any agreement between a large retailer and a supplier which must be recorded in writing.

### 5. Act to bind the Crown

This Act binds the Crown.

### 6. Groceries Code

The Commerce Commission may establish a Groceries Code.

### 7. The Adjudicator

(1) A Groceries Code Adjudicator is established (see Schedule 1).

(2) The Adjudicator, including any staff working for the Adjudicator, is a Crown entity for the purposes of the Crown Entities Act 2004.

(3) The Crown Entities Act 2004 applies to the Adjudicator, including any staff working for the Adjudicator, except to the extent that this Act expressly provides otherwise.

### 8. Arbitration

(1) If a supplier refers a dispute to arbitration under the Groceries Code, the Adjudicator must either—

> (a) arbitrate the dispute; or
>
> (b) appoint another person to arbitrate.

(2) If a large retailer refers a dispute to arbitration under a supply agreement, the Adjudicator may accept appointment as the arbitrator.

### 9. Information about arbitration

(1) If the Adjudicator appoints another person as arbitrator under section 8(1)(b), the Adjudicator may require the arbitrator, or a party to the dispute, to provide information to assist the Adjudicator in carrying out functions under this Act.

(2) The Adjudicator may enforce the requirement to provide information by bringing civil proceedings to obtain an injunction.

### 10. Investigations

(1) The Adjudicator may investigate whether a large retailer has broken the Groceries Code if the Adjudicator has reasonable grounds to suspect that—

> (a) the retailer has broken the Code; or
>
> (b) the retailer has failed to follow a recommendation made under section 13.

(2) For powers to require a person to provide information, see Schedule 2.

(3) The Adjudicator may not carry out an investigation until the guidance required by section 18(1) has been published.

### 11. Investigation reports

(1) Following an investigation the Adjudicator must—

> (a) publish a report on the outcome of the investigation; and
>
> (b) consider whether to use any of the enforcement powers mentioned in section 12.

(2) An investigation report must, in particular, specify—

> (a) any findings that the Adjudicator has made;
>
> (b) any action that the Adjudicator has taken or proposes to take; and
>
> (c\) the reasons for the findings and any action taken or proposed.

(3) It is not necessary for an investigation report to identify the retailer concerned.

(4) If a retailer is identified in a report, the retailer must have been given a reasonable opportunity to comment on a draft of the report before publication.

### 12. Investigations: forms of enforcement

If, as a result of an investigation, the Adjudicator is satisfied that a large retailer has broken the Groceries Code, the Adjudicator may take one or more of the following enforcement measures—

> (a) make recommendations;
>
> (b) require information to be published;
>
> (c\) impose financial penalties.

### 13. Investigations: enforcement using recommendations

(1) If the Adjudicator chooses to enforce through making recommendations, that means recommending what the large retailer should do in order to comply with the Groceries Code.

(2) The Adjudicator must monitor whether a recommendation has been followed.

(3) For powers to require a person to provide information, see Schedule 2.

### 14. Investigations: enforcement using requirements to publish information

(1) If the Adjudicator chooses to enforce through requiring information to be published, that means requiring the large retailer to publish information relating to the investigation.

(2) The publication requirement is imposed by giving written notice to the large retailer specifying—

> (a) what information is to be published;
>
> (b) how it must be published; and
>
> (c\) the time by which it must be published.

(3) The Adjudicator may enforce the requirement to publish information by bringing civil proceedings to obtain an injunction.

### 15. Investigations: enforcement using financial penalties

(1) If the Adjudicator chooses to enforce through imposing financial penalties, that means imposing a penalty on the large retailer of an amount not exceeding the amount of the permitted maximum (see subsection (6)).

(2) The financial penalty is imposed by giving the large retailer written notice specifying—

> (a) the grounds for imposing the penalty;
>
> (b) the amount of the penalty;
>
> (c\) the period within which it must be paid; and
>
> (d) how it must be paid.

(3) The large retailer may appeal against the imposition of a financial penalty or its amount to the High Court.

(4) Financial penalties under this section are recoverable by the Adjudicator as a debt.

(5) Financial penalties received by the Adjudicator must be paid into the Treasury.

(6) The Minister must make an order—

> (a) specifying the amount of the permitted maximum, or
>
> (b) specifying how that amount is to be determined.

(7) The Adjudicator must, within 6 months beginning with the day on which the Act comes into force, make a recommendation as to the amount that should be specified in the first order under subsection (6) or the method for determining the amount.

### 16. Recovery of investigation costs

(1) The Adjudicator may require a large retailer to pay some or all of the costs of an investigation (including any costs incurred in exercising the enforcement powers) if satisfied that the retailer has broken the Groceries Code.

(2) The Adjudicator may require a person to pay some or all of the costs of an investigation if the Adjudicator carried out the investigation as a result of a complaint by the person which, the Adjudicator is satisfied, was vexatious or wholly without merit.

(3) A requirement to pay costs is imposed by giving written notice specifying—

> (a) the grounds for imposing the requirement to pay costs;
>
> (b) how much is to be paid; and
>
> (c\) by when the costs are to be paid.

(4) A person required to pay costs under this section may appeal against the imposition of the requirement or the amount to which it relates to the High Court.

(5) Costs required to be paid under this section are recoverable by the Adjudicator as a debt.

### 17. Advice

The Adjudicator may give advice on any matter relating to the Groceries Code to suppliers or large retailers.

### 18. Guidance

(1) The Adjudicator must publish guidance about—

> (a) the criteria that the Adjudicator intends to adopt in deciding whether to carry out investigations;
>
> (b) the practices and procedures that the Adjudicator intends to adopt in carrying out investigations;
>
> (c\) the criteria that the Adjudicator intends to adopt in choosing whether to use the enforcement powers and which ones; and
>
> (d) the criteria that the Adjudicator intends to adopt in deciding the amount of any financial penalty under section 15.

(2) In addition, the Adjudicator may publish guidance about the practices and procedures that the Adjudicator intends to adopt in carrying out other functions.

(3) The Adjudicator may publish guidance about—

> (a) the application of any provision of the Groceries Code;
>
> (b) steps that large retailers need to take in order to comply with the Groceries Code;
>
> (c\) any other matter relating to the Groceries Code.

(4) Before publishing guidance under this section the Adjudicator must consult any persons they think appropriate.

(5) The Adjudicator must publish the first guidance under subsection (1)(a), (b), (c\) and (d) within 6 months beginning with the day on which the Act comes into force.

(6) Where there is any guidance in force under this section, the Adjudicator must take account of it in carrying out functions.

### 19. Recommendations to Commerce Commission

If the Adjudicator considers it appropriate for any changes to be made to the Groceries Code, they must recommend them to the Commerce Commission.

### 20. Annual report

(1) In this section **reporting period** means—

> (a) the period beginning with the day on which the Act comes into force and ending with the following 31 March; and
>
> (b) each successive period of 12 months

(2) After the end of each reporting period the Adjudicator must prepare and publish a report describing what the Adjudicator has done during the period.

(3) The report must include a summary of—

> (a) disputes referred to arbitration under the Groceries Code;
>
> (b) investigations carried out by the Adjudicator; and
>
> (c\) cases in which the Adjudicator has used the enforcement measures mentioned in section 12.

(4) If the Adjudicator has made recommendations under section 13, the report must include an assessment of whether they have been followed.

(5) The report must set out any recommendations that the Adjudicator has made to the Commerce Commission for changes to the Groceries Code.

(6) As well as publishing the report, the Adjudicator must send a copy to—

> (a) the Minister responsible for Commerce and Consumer Affairs; and
>
> (b) the Commerce Commission.

(7) The Minister must lay a copy of the report before Parliament.

### 21. Transfer of Adjudicator functions and abolition etc

(1) The Minister may by order transfer some or all of the Adjudicator’s functions to a public body and in deciding whether to do so must take account of the desirability of—

> (a) increasing efficiency, effectiveness and economy in the exercise of public functions; and
>
> (b) ensuring appropriate accountability to Ministers in the exercise of public functions.

(2) The Minister may by order abolish the Adjudicator if the Minister transfers all of the Adjudicator’s functions under subsection (1).

(3) An order under subsection (2) may include provision transferring the Adjudicator’s property, rights and liabilities.

### 22. Information to the Minister

(1) The Minister may require the Adjudicator to provide information to assist the Minister in carrying out functions under this Act.

(2) The requirement to provide information to the Minister does not override section 23.

### 23. Confidentiality

(1) The Adjudicator may not make an unauthorised disclosure of information relating to an arbitration under the Groceries Code or under a supply agreement if—

> (a) the information identifies a party to the arbitration; or
>
> (b) the Adjudicator thinks that the identity of a party to the arbitration could be deduced from it.

(2) The Adjudicator may not make an unauthorised disclosure of information that the Adjudicator thinks might cause someone to think that a particular person has complained about a large retailer failing to comply with the Groceries Code.

(3) For the purposes of this section a disclosure of information is unauthorised unless—

> (a) the Adjudicator has obtained the required consent;
>
> (b) the disclosure is required, under rules of court or a court order, for the purposes of legal proceedings of any description.

(4) The required consent is—

> (a) in the case of information to which subsection (1) applies, the consent of the parties to the arbitration;
>
> (b) in the case of information to which subsection (2) applies, the consent of the person.

### 24. Levy funding

(1) In this section—

**specified retailer** means a retailer mentioned in the Groceries Code;

**surplus** means money held by the Adjudicator at the end of a financial
year less—

> (a) liabilities shown in the Adjudicator’s statement of accounts for that
financial year; and
>
> (b) the total amount of any grants made by the Secretary of State under
section 25 during that financial year or earlier ones.

(2) The Adjudicator may require the specified retailers to pay a levy towards the Adjudicator’s expenses.

(3) Before imposing a levy the Adjudicator must obtain the Minister’s consent.

(4) In deciding the amount of a levy the Adjudicator must take into account any sums received or expected to be received from other sources.

(5) The Adjudicator may take into account estimated as well as actual expenses.

(6) The Adjudicator may require different specified retailers to pay different amounts of levy but any differences must be based on criteria broadly intended to reflect the expense and time that the Adjudicator expects (in the light of previous experience) to spend in dealing with matters relating to different specified retailers and any subsidiaries.

(7) The Adjudicator must inform each specified retailer of —

> (a) the amount of any levy payable by the retailer; and
>
> (b) when payments are due.

(8) A levy required to be paid under this section is recoverable by the Adjudicator as a debt.

(9) The Adjudicator must publish details of levies and an explanation of how the amounts have been decided (including any criteria under subsection (6)).

(10) If the Adjudicator has a surplus, the Adjudicator may repay some or all of it to the specified retailers.

### 25. Payments by the Minister

(1) The Minister may make grants or loans to the Adjudicator.

(2) The grants or loans may be subject to conditions (including conditions as to repayment with or without interest).

## Schedule 1: The Adjudicator

(1) The Adjudicator is a body corporate.

(2) The Adjudicator carries out functions on behalf of the Crown.

(3) The Adjudicator is to be appointed by the Minister.

(4) The Minister may appoint a Deputy Adjudicator

(5) The Deputy Adjudicator may carry out any of the Adjudicator’s functions.

(6) A person holds and vacates office as the Adjudicator or Deputy Adjudicator in
accordance with the terms of his or her appointment, but—

> (a) a person’s initial term of office may not be more than four years;
>
> (b) a person may be appointed for one or two further terms of office;
>
> (c\) a further term may not be more than three years;
>
> (d) a person may resign by giving written notice to the Minister; and
>
> (e) the Minister may dismiss the person if satisfied that the person is unable, unwilling or unfit to perform his or her functions.

(7) Service as the Adjudicator, or as the Deputy Adjudicator, is not service in the civil service of the state.

(8)(a) The Adjudicator may pay to or in respect of the person holding office as the Adjudicator or the Deputy Adjudicator—

> (i) remuneration;
>
> (ii) allowances;
>
> (iii) sums by way of or in respect of pensions.

(b) The Minister must determine rates and eligibility criteria for the payments.

(9)(a) The Adjudicator may make arrangements with the Minister or any other public authority for staff to be seconded to the Adjudicator.

(b) The arrangements may include provision for payments by the Adjudicator.

(10)(a) The Adjudicator must make procedural arrangements for dealing with any conflict of interest affecting—

> (i) the Adjudicator;
>
> (ii) the Deputy Adjudicator; or
>
> (iii) staff working for the Adjudicator.

(b) The Adjudicator must consult the Minister before making or revising the arrangements.

(c\) The Adjudicator must publish a summary of the arrangements.

(11)(a) This paragraph applies if both the Adjudicator and the Deputy Adjudicator are unable to act in relation to a matter because of conflicts of interest.

(b) The Minister must appoint a person to act as a Deputy Adjudicator if asked to do so by the Adjudicator.

(c\) An acting Deputy Adjudicator may carry out any of the Adjudicator’s functions for the purpose of dealing with the matter in respect of which he or she is appointed.

(d) A person holds and vacates office as an acting Deputy Adjudicator in accordance with the terms of his or her appointment (subject to sub-paragraph (e)).

(e) Paragraphs 6(d) and (e) and 7 and 8 apply to an acting Deputy Adjudicator as they apply to the Deputy Adjudicator.

(12) A defect in appointment does not affect the validity of things done by—

> (a) the Adjudicator;
>
> (b) the Deputy Adjudicator; or
>
> (c\) an acting Deputy Adjudicator.

(13) The application of the Adjudicator’s seal must be authenticated by the signature of—

> (a) the Adjudicator; or
>
> (b) some other person who has been authorised by the Adjudicator for that purpose (whether generally or specially).

(14) A document purporting to be duly executed under the seal—

> (a) is to be received in evidence; and
>
> (b) is to be treated as duly executed unless the contrary is shown.

(15)(a) The Adjudicator must keep proper accounts and proper records in relation to the accounts.

(b) For each financial year the Adjudicator must prepare a statement of accounts in respect of that financial year.

(c\) The statement must be in whatever form the Minister directs.

(d) The Adjudicator must send a copy of the statement, within a period specified by the Minister, to—

> (i) the Minister; and
>
> (ii) the Controller and Auditor-General.

(e) After the Adjudicator has sent a copy of a statement of accounts to the Controller and Auditor-General, the Controller and Auditor-General must—

> (i) examine, certify and report on the statement; and
>
> (ii) send a copy of the certified statement and the report to the Minister as soon as possible.

(f) The Minister must lay before Parliament a copy of the certified statement and of the report.

(16) The Adjudicator may do anything that is calculated to facilitate the carrying out of the Adjudicator’s functions or is conducive or incidental to the carrying out of those functions.

(17) The Commerce Commission may provide staff, premises, facilities or other assistance to the Adjudicator (with or without charge).

(18)(a) The following are exempt from liability in damages for anything done or omitted in the exercise or purported exercise of their functions—

> (i) the Adjudicator;
>
> (ii) the Deputy Adjudicator;
>
> (iii) acting Deputy Adjudicators;
>
> (iv) staff working for the Adjudicator.

(b) But sub-paragraph (1) does not apply—

> (i) if the act or omission is shown to have been in bad faith; or
>
> (ii) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was incompatible with a Convention right.

## Schedule 2: Information powers

(1)(a) The Adjudicator may, for the purposes of an investigation, require a person—

> (i) to provide documents in the person’s possession or control;
>
> (ii) to provide other information in the person’s possession or control.

(b) The Adjudicator may, for the purposes of monitoring whether a large retailer has followed a recommendation made under section 8, require the retailer—

> (i) to provide documents in the retailer’s possession or control;
>
> (ii) to provide other information in the retailer’s possession or control.

(c\) A requirement imposed under this paragraph may include a requirement for information to be provided orally.

(d) A requirement is imposed by giving a written notice specifying—

> (i) to whom the information is to be provided;
>
> (ii) where it is to be provided;
>
> (iii) when, or the time by which, it is to be provided;
>
> (iv) the form and manner in which it is to be provided.

(e) A notice must also explain the possible consequences of failing to comply.

(f) If a notice requires an individual to attend at a particular place the Adjudicator must offer to pay necessary travelling expenses.

(g) A person may not be required under this paragraph to do anything that the person could not be compelled to do in civil proceedings before the High Court.

(2)(a) It is an offence for a person intentionally to fail to comply with a requirement under this Schedule.

(b) It is a defence for a person charged with that offence to prove that there was a reasonable excuse for the person’s failure.

(3) It is an offence for a person knowingly to provide false information in response to a requirement under this Schedule.

(4) A person guilty of an offence under this Schedule is liable—

> (a) on summary conviction, to a fine not exceeding the statutory maximum;
>
> (b) on conviction on indictment, to a fine.