Have your sayConsultation on proposed rules
Grocery Industry Dispute Resolution Scheme
The new grocery industry regulatory regime instituted under the Grocery Industry Competition Act 2023 (the Act) requires a dispute resolution scheme to be established. The scheme is for disputes up to a claimed amount not exceeding $5 million:
- between grocery suppliers and regulated retailers in relation to the grocery supply code make under Part 2 of the Act, and
- between wholesale customers and regulated grocery retailers in relation to the wholesale supply of groceries regime (Part 3 of the Act).
The Grocery Supply Code 2023 comes into full force on 28 March 2024.
On 11 October 2023, the (then) Minister of Commerce and Consumer Affairs approved the New Zealand Dispute Resolution Centre | Te Pokapū Whakatau Tautohe o Aotearoa (NZDRC) to provide the Grocery Industry Dispute Resolution Scheme (the Scheme) in terms of clause 2 of Schedule 2 of the Grocery Industry Competition Act 2023.
The 2023 draft Grocery Industry Dispute Resolution Scheme Rules (Draft Rules) have been prepared by NZDRC. The Scheme will be operational once the Minister of Commerce and Consumer Affairs approves the Draft Rules.
NZDRC is seeking written submissions on the Draft Rules by 2.00 pm on Friday, 26 January 2024. The Draft Rules, the Consultation Paper and the Submission Form template can be downloaded on this page.
Please use the submission template provided. This will help us collate submissions and ensure your views are fully considered.
Submit your submission by emailing the template as a PDF or Microsoft Word document to firstname.lastname@example.org or mailing your submission to the New Zealand Dispute Resolution Centre, PO Box 33297 Takapuna 0740.
Please direct any questions that you have in relation to the submissions process to email@example.com.
Please note: The consultation paper is comprehensive due to the diverse range of potential submitters. It is emphasised that any submitter may elect to respond to all or any of the questions recorded in the submission form.
Frequently Asked Questions
Who can use the Grocery Industry Dispute Resolution Scheme?
Only Suppliers, Wholesale Customers and Regulated Grocery Retailers can use the Approved Dispute Resolution Scheme (Scheme). The Scheme will not cater to consumers.
Only a Supplier or Wholesale Customer may initiate a dispute resolution process (referred to in the Scheme Rules as the Claimant).
Regulated Grocery Retailers may not be a Claimant under the Scheme. They may only respond to the claims raised by Suppliers or Wholesale Customers and claim set-off or abatement up to the amount of the claim to extinguish the claim entirely (referred to in the Scheme Rules as the Respondent).
Please see the Rules for a definition of Suppliers, Wholesale Customers and Regulated Grocery Retailers.
Can a Regulated Grocery Retailer refuse to participate in a dispute resolution process?
No – a Regulated Grocery Retailer must comply with the Rules of the Approved Dispute Resolution Scheme.
If a Regulated Grocery Retailer fails to comply, NZDRC may apply to the District Court to obtain an order requiring the Regulated Grocery Retailer to comply.
If a Party fails to participate or fails to comply with a direction or order made by an Adjudicator, the Adjudicator may draw any reasonable inferences they think fit from the failure and proceed to determine the claim based on the information available to them.
What kind of disputes may be dealt with under the Scheme?
Disputes eligible for referral to the Scheme include those with a claimed amount under $5 million arising from Grocery Supply Code requirements or wholesale supply of groceries. Only Suppliers or Wholesale Customers (not Regulated Grocery Retailers) can refer disputes to the Scheme.
The Minister and Governor-General have authority to prescribe further eligible classes of disputes that may be referred to the Scheme.
How will disputes be resolved and how is that decided?
The Claimant (who may only be a Supplier or Wholesale Customer – not a Regulated Grocery Retailer) must elect to refer a dispute to either Mediation or Adjudication under the Scheme at the time the Notice of Dispute is served on the Respondent Regulated Grocery Retailer.
A dispute can be subject to Mediation or Adjudication even if other court or tribunal proceedings are afoot.
Parties may choose a tikanga-based Māori cultural support framework for the resolution of disputes under the Scheme using Māori beliefs, principles, values, and practices that derive from traditional knowledge (mātauranga Māori) for improved outcomes for parties.
What is mediation?
Mediation is a consensual, confidential, and informal negotiation process in which parties to a dispute use the services of a skilled and independent Mediator to assist them to define the issues in dispute, develop and explore settlement options, assess the implications of settlement options, and negotiate a mutually acceptable settlement of that dispute which meets their interests and needs.
The primary objectives of Mediation are to facilitate communication, foster understanding, enable and assist the parties to negotiate and resolve the dispute promptly, cost effectively, and confidentially rather than have a decision imposed upon them by an Adjudicator.
Mediation enables the parties to negotiate flexible and creative solutions which need not conform to strict legal rights or general community standards.
Mediation has a timetable, structure and dynamics that simple negotiation lacks. It allows expectations to be checked and managed and intransigence to be overcome. The opportunity to discuss issues in an informal, private and confidential setting with the assistance of a Mediator helps improve communications, break down barriers and preserve or re-build relationships and reputations.
The Mediator will not decide the dispute for the parties. The Mediator is not an advisor or advocate for anyone involved in the dispute. They must remain impartial and neutral, and while they may have candid discussions with the parties, they will not give advice or make any decisions for the parties.
What is adjudication?
Adjudication is a process of resolving disputes by a neutral third-party person through a formal, structured decision-making process.
The process is designed to fairly and impartially resolve disputes by applying relevant statutory provisions and legal principles to the preferred evidence.
It involves a neutral third-party Adjudicator receiving, examining and reviewing the written submissions and evidence provided by the parties and making a final and binding decision (a Determination) of the matters in dispute.
The Adjudicator will make their Determination on the papers only, ie there will be no oral hearing but conferences, visits or inspections are possible. The process set out in the Scheme has proven to be time and cost efficient. This process is similar to the statutory adjudication process under the Construction Contracts Act 2002 with improvements that have been learned from delivering that service, albeit with a shorter timeframe for making a Determination under the Grocery Industry Competition Act 2023.Act.
The purpose of Adjudication is to:
(a) resolve a dispute in a manner that is fair, prompt, cost effective, and proportionate to the amount in dispute and the complexity of the issues involved; and
(b) provide a Determination within 25 Working Days of the Claimant (a Supplier or Wholesale Customer) serving the Notice of Dispute on the Respondent (a Regulated Grocery Retailer) that is binding on the parties (unless and until the dispute is finally determined by arbitration, legal proceedings in a court or tribunal, or subsequent agreement between the parties).
Adjudication is more formal than Mediation but less formal than court proceedings and it is not mandatory for parties to be legally represented, although it is likely to assist.
How long will it take?
Typically, the resolution of a dispute under the Scheme will be completed in 25 Working days or less from the date the Claimant serves a Notice of Dispute on the Respondent.
Mediation is likely to be the quickest dispute resolution process. Mediation is the least formal process involving only an exchange of position papers before the joint Mediation meeting takes place (so that the parties and the Mediator are apprised of the issues and the parties’ positions in relation to those issue, and therefore better prepared to deal with them at Mediation). In some cases, Mediation can be completed within just a few days if the parties are ready and prepared to mediate.
Adjudication involves a number of procedural steps that are designed to enable the Adjudicator to make their Determination within 25 Working Days . However, an Adjudicator may extend the time for each of the procedural steps including making the Determination in cases where additional time is reasonably necessary, for example due to the size and complexity of the dispute.
What will it cost and who pays?
To ensure the Scheme is accessible to all persons entitled to use the Scheme, every Regulated Grocery Retailer must pay NZDRC a Levy to fund the operation and delivery of the Scheme.
The Regulated Grocery retailer pays the mediator’s fee, and the parties pay their own costs and expenses (legal and expert costs, if any) unless the parties agree otherwise.
The Regulated Grocery Retailer pays the Adjudicator’s fee, and the parties pay their own costs and expenses (legal and expert costs, if any). However, the Adjudicator may make a different Determination in some circumstances ie, where a claim is vexatious or frivolous or a party makes allegations and objections that are without substantial merit or acts in bad faith
Are the outcomes enforceable?
If the Parties reach agreement on any or all matters in dispute, such agreement must be recorded in a Settlement Agreement signed by the Parties. A Settlement Agreement can be enforced by a party or NZDRC applying to the District Court.
An Adjudicator’s Determination is binding on the parties, unless and until the Dispute is finally determined by legal proceedings in a court. A Determination is a debt due and owing. It must be treated as an order of the District Court and must be complied with before a party starts legal proceedings to challenge a Determination.
Can a Determination be appealed?
An appeal may be brought only on a question of law. A question of law includes an error of law that involves an incorrect interpretation of the applicable law (whether or not the error appears in the Determination), but does not include any question as to whether:
(a) the Determination or any part of the Determination was supported by any evidence or any sufficient or substantial evidence; and
(b) the Adjudicator drew the correct factual inferences from the relevant primary facts.