GROCERY REGULATIONS COMPLIANCE POLICY. TESCO ROI Policy March 2017

GROCERY REGULATIONS COMPLIANCE POLICY TESCO ROI Policy March 2017

GROCERY REGULATIONS COMPLIANCE POLICY Why it matters The Grocery Regulations are about dealing fairly and transparently with suppliers and many of the behaviours it requires are the same as those defined in our Leadership Skills and our Tesco Values. Getting it wrong is bad for us, our suppliers and our customers and sanctions are significant including fines up to 100,000 and potentially imprisonment. This Grocery Regulations Compliance Policy is designed to ensure that we: work collaboratively and build great relationships with our suppliers; deliver the very best value for our customers; and are seen as a company which is fair, honest, knowledgeable and helpful. Purpose of Policy This Policy sets out: 1. our minimum expectations for complying with the Grocery Regulations. All colleagues employed by Tesco Ireland who are involved in the supply of groceries for resale to the Irish market must comply with this Policy; and 2. the obligation of Tesco Ireland to implement a Grocery Regulations Compliance Programme. This policy excludes other legislation, e.g. Competition Act and the UK s GSCOP, as these are covered elsewhere in separate policies and should be read in conjunction with the Ethics and Compliance Blueprint. It also excludes any other voluntary codes by which Tesco is bound eg the EU Supply Chain Initiative. 1

GROCERY REGULATIONS COMPLIANCE POLICY Grocery Regulations Key Principles The Grocery Regulations apply to all supplier relationships where Groceries products are purchased for sale in Ireland: this is regardless of where in the world the products are sourced. The Grocery Regulations contain some key principles which lay down the way in which we must go about complying with our obligations. These are: 1. We deal fairly and lawfully with our suppliers 2. We have a written contract with each supplier 3. We pay our suppliers on time 4. Will only pass charges to suppliers where we can evidence their prior agreement 5. Our buyers complete mandatory new starter and refresher training 6. We monitor and report, internally and externally, our compliance with the Grocery Regulations We abide by the specific rules contained in the Grocery Regulations (and the Guidelines to them) as laid out in the Risk Assessment at Annex 1. Copies of the Grocery Regulations and the Guidelines are included at Annex 2 and are also available on the Grocery Regulations Sharepoint. Any alleged breach of the Grocery Regulations received from a supplier must be reported to Legal straight away and logged in the format on the tracker at Annex 3. In the event that a supplier raises a complaint which suggests a breach of the Grocery Regulations, whether or not the supplier has specifically cited them, we record it on the disputes tracker at Annex 3 and proactively seek to resolve it. It is not enough to simply ignore the complaint, even if it is obvious that the complaint was raised in error or was a mistake made by Tesco. Further information and support is available from Legal. 2

GROCERY REGULATIONS COMPLIANCE POLICY Grocery Regulations Compliance Programme Legal own the Grocery Regulations Compliance Programme and compliance with it will be reported to the Compliance Committee at least once each year. The CEO is accountable for ensuring that the Grocery Regulations Compliance Programme is followed and that colleagues understand and follow these principles in their day to day activities. The minimum expectation is that the programme comprises: A. GOVERNANCE & LEADERSHIP: Leadership team sets the tone from the top and leads by example B. RISK ASSESSMENT: The nature and extent of Grocery Regulations risks are assessed C. POLICIES: The policy is adopted, is easily accessible and that it is followed by all colleagues D. GUIDELINES & PROCEDURES: Clear guidelines that give more detailed information and set out practical processes should be developed, made easily accessible and followed by all colleagues E. TRAINING & COMMUNICATION: All new colleagues are provided with a copy of the Grocery Regulations during their first week, mandatory new starter training for all relevant colleagues within one month of joining Tesco or taking up a new role and mandatory refresher training for all at-risk colleagues each calendar year. In addition, ad-hoc training, guidance or assessments (for example in the form of a PiP) should be provided whenever a risk is identified or where required by the regulator. F. INVESTIGATIONS & SANCTIONS: Clear escalation processes are in place to manage breaches of the Grocery Regulations or Tesco policies and appropriate action is taken whenever a breach of the Grocery Regulations or a Tesco policy is identified. 3

GROCERY REGULATIONS COMPLIANCE POLICY G. MONITORING & REVIEW: The Programme is reviewed by Legal at least once each year to ensure it is effective and is reported to the compliance committee at least annually. The compliance with Grocery Regulations of individual buyers is measured as part of the corporate performance review process This Compliance Policy, together with the Programme that supports compliance must be reviewed annually and specifically following the publication by the Regulator of any new guidance. Breaches It is important that any colleague who suspects that the Grocery Regulations or this Policy might have been breached speaks up straight away. Breaches, whether confirmed or suspected, raised internally or by suppliers, must be reported as soon as possible, and in any event within 48 hours, to both Legal and your line manager. If you feel unable to raise the issue with your line manager or Legal, you should contact Protector Line: tesocoireland@expolink.co.uk / 1800 567014. Breaches of the Grocery Regulations are, by definition, also a breach of the Tesco Code of Business Conduct, so the Corporate Breach Reporting Process must be followed. Failure to comply with this policy may result in disciplinary action being taken against any colleagues concerned or the termination of contracts with contractors working for Tesco. 4

GROCERY REGULATIONS COMPLIANCE POLICY Contact If you have any questions on how this Policy or related guidance applies or should be implemented, or if you have any other Grocery Regulations related query (including if you receive any contact from regulators), please contact: Colm O Connell (Grocery Regulations Liaison Officer): John Kealy (Legal Counsel): Sarah Gallagher (Legal : +353 1 215 2714 or colm.oconnell@tesco.ie +353 1 215 2651 or John.Kealy@tesco.ie +353 1 215 2054 or Sarah.Gallagher@tesco.ie A copy of this policy and the Grocery Regulations Compliance Programme is available on the Grocery Regulations Sharepoint 5

GROCERY REGULATIONS COMPLIANCE POLICY Annex 1: Risk Assessment Tracker/RACI A template for identifying and assessing risks faced by the business (i.e. Grocery Regulations risks that are material to the business) is shown below. This Risk Assessment Matrix should be reviewed regularly to ensure that it reflects any additional exposure for the business following publication by the Regulator of clarification and/or guidance. Management of risk is supported primarily by ongoing monitoring activity which is carried out by the Regulatory, Compliance and Ethics team. In addition, investigations conducted by Internal Audit and the monitoring of complaints and alleged breaches within the Group Legal team will identify areas of concern which may arise from time to time. The focus of monitoring and auditing work should focus on issues that the Regulator may identify from time to time together with issues raised separately by colleagues or suppliers. 6

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 1 Regulation 4 Grocery Goods Contract Compliance Risk How we manage the Risk Responsible Accountable We do not have a comprehensive written contract in place with our Supplier. The Contract is not expressed in clear understandable language. The Contract is not signed by both parties. Active Supplier list in place and maintained Signed T&Cs required as part of supplier set-up All Deals & Charges agreed via D&C webform Buyers follow document storage protocol Buyer Training Proforma contract subject to regular legal review Signed T&Cs required as part of supplier set-up Joe Manning & John Brennan (Category Directors) Colm O Connell (Head of Compliance & Regulation) ( Sarah Gallagher (Legal ( 2 Regulation 5 Variation Termination or Renewal of The Contract is not retained by both parties. Our written Contract does not expressly entitle us to vary, terminate or renew our Contract. Document Repository Buyers follow document storage protocol Buyer Training Proforma contract subject to regular legal review Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Colm O Connell (Head of Compliance & Regulation) ( Sarah Gallagher (Legal 7

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation Grocery Goods Contracts Compliance Risk How we manage the Risk Responsible Accountable We do not comply with our Contractual requirements to vary, terminate or renew. We do not provide reasonable notice to vary, terminate or renew having regard to all of the circumstances including duration of Contract, frequency of orders, characteristics of grocery goods (including durability, seasonality and external factors affecting their production) and for significant variation, the value of any order so affected or delivery arrangements relative to the annual turnover of the supplier. 1 Signed T&Cs required as part of supplier set-up All Deals & Charges agreed via D&C webform Buyers follow document storage protocol Buyer Training Regular Audit/Compliance Monitoring Buyer Training Grocery Regulations Buyer Toolkit Legal Review Regular Audit/Compliance Monitoring Joe Manning & John Brennan (Category Directors) Colm O Connell (Head of Compliance & Regulation) ( ( Sarah Gallagher (Legal 3 Regulation 6 Goods or Services from Third Parties We compel a supplier to obtain goods or services from a third party from whom we received payment for the arrangement except where the Training Grocery Regulations Buyer Toolkit Pro-forma comms to suppliers Legal Review ( 1 Variation includes variation of the frequency, timing or volume of the supplier delivery of grocery goods 8

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation Compliance Risk How we manage the Risk Responsible Accountable suppliers alternative fails to meet reasonable quality standards or is more expensive. Regular Audit/Compliance Monitoring Colm O Connell (Head of Compliance & Regulation) Sarah Gallagher (Legal 4 Regulation 7 Non-performance due to factors beyond reasonable control of parties to Contract We seek to make a supplier liable for delays or failure to perform resulting from circumstances beyond the supplier s reasonable control. T&Cs expressly cover this issue (Clause 21) Buyer Training Colm O Connell (Head of Compliance & Regulation) ( Sarah Gallagher (Legal 5 Regulation 8 Forecasts of the supply of grocery goods Despite a request from a supplier, we fail to prepare in good faith and with due skill, care and diligence a forecast of grocery goods. Buyer & Supply Chain Training Online forecasting platform accessible by suppliers via Tesco Connect Barry Davies (Head of Supply Chain) Barry Davies (Head of Supply Chain) We fail to provide a forecast of grocery goods required by us in respect of a specified period where one has been requested by a supplier. Buyer & Supply Chain Training Online forecasting platform accessible by suppliers via Tesco Connect Barry Davies (Head of Supply Chain) Barry Davies (Head of Supply Chain) The forecast provided to the supplier is prepared without consultation with the supplier as to the basis of its preparation. Buyer & Supply Chain Training Online forecasting platform accessible by suppliers via Tesco Connect Barry Davies (Head of Supply Chain) Barry Davies (Head of Supply Chain) The forecast is not prepared in good faith and with due skill, care and diligence. Buyer & Supply Chain Training Online forecasting platform accessible by suppliers via Tesco Connect Barry Davies (Head of Supply Chain) Barry Davies (Head of Supply Chain) 9

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 6 Regulation 9 Payment from Supplier as a Condition of stocking, displaying or listing 2 Compliance Risk How we manage the Risk Responsible Accountable The forecast is provided without confirmation in writing of the basis upon which it was prepared. Our charges to a supplier for stocking, displaying or listing its grocery goods are not based on an objective and reasonable estimate of the costs to us. We seek to levy the charge in respect of grocery goods which are not new to store (that is in the case of a single store, they must not have been supplied in the previous year or in the case of multiple stores, they must not have been stocked in a least 25% of those stores in the previous year). Buyer & Supply Chain Training Online forecasting platform accessible by suppliers via Tesco Connect Master Schedule of Deals & Charges addresses this and is kept under regular review Deals & Charges Webform Grocery Regulations Buyer Toolkit Buyer Training Regular Audit/Compliance Monitoring Master Schedule of Deals & Charges addresses this and is kept under regular review Deals & Charges Webform Grocery Regulations Buyer Toolkit Buyer Training Regular Audit/Compliance Monitoring Barry Davies (Head of Supply Chain) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Barry Davies (Head of Supply Chain) ( ( We fail to provide a supplier with an estimate of the costs of stocking, displaying or listing grocery goods upon its request. Master Schedule of Deals & Charges addresses this and is kept under regular review Deals & Charges Webform Grocery Regulations Buyer Toolkit Buyer Training Joe Manning & John Brennan (Category ( 2 Note the Regulation does not apply to payments made in respect of a promotion. 10

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 7 Regulation 10 Payment Terms and Conditions 8 Regulation 11 Promotions Compliance Risk How we manage the Risk Responsible Accountable The estimate does not set out the basis upon which the estimate has been prepared. We fail to agree payment terms with our supplier in writing. We fail to meet those payment terms (i.e. we pay late) We agree payment terms in excess of 60 days in breach of the late payment regulation. We seek payment or an allowance from a supplier in respect of a promotion where our Contract does not expressly Regular Audit/Compliance Monitoring Master Schedule of Deals & Charges addresses this and is kept under regular review Deals & Charges Webform Grocery Regulations Buyer Toolkit Buyer Training Payment Terms Policy in place and communicated to our supply base Written acceptance of Payment Terms for each supplier We are clear what constitutes a late payment and what is a valid dispute We have a clear process to deal with both appropriately and quickly Invoice Query Team (Zendesk) Buyer Training Clear Complaints Process Regular Audit/Compliance Monitoring Payment Terms Policy does not exceed 60 days T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Directors) Joe Manning & John Brennan (Category Directors) Brian Houlihan (/Marketing Finance Manager) Brian Houlihan (/Marketing Finance Manager) Brian Houlihan (/Marketing Finance Manager) ( Duncan Anniss (Finance Duncan Anniss (Finance Duncan Anniss (Finance ( 11

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 9 Regulation 12 3 Payment for Marketing Costs provide for this. Compliance Risk How we manage the Risk Responsible Accountable We run a promotion without providing the supplier with the requisite notice specifying the duration, frequency, quantity and basis for such quantity. We fail to provide the supplier with an estimate of cost of the promotion (and the basis of that estimate) upon request. We seek payment for marketing costs in circumstances where our contract does not entitle us to. Charges Buyer Training Grocery Regulations Buyer Toolkit Promotions Nomination Form Regular Audit/Compliance Monitoring Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Promotions Nomination Form Regular Audit/Compliance Monitoring Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Promotions Nomination Form Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Regular Audit/Compliance Monitoring Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category ( ( ( 3 This regulation does not apply in respect of a promotion. 12

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 10 Regulation 13 4 Payment for retention, increased allocation or better positioning of shelf space 11 Regulation 14 5 Payment for Compliance Risk How we manage the Risk Responsible Accountable The payment is not based on an objective and reasonable estimate of the marketing costs. We fail to provide an estimate of the marketing costs (on the basis upon which the estimate has been prepared) upon request. We seek payment or an allowance for shelf space where that is not provided in our Contract. We compel a supplier to make a payment (or grant an allowance) for the Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring Deals & Charges Webform Master Schedule of Deals & Directors) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) ( ( ( ( 4 This regulation does not apply in respect of a promotion. 5 This regulation does not apply in respect of a promotion. 13

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation advertising or display of grocery goods Compliance Risk How we manage the Risk Responsible Accountable advertising or display of its grocery goods in our premises. 6 Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring Joe Manning & John Brennan (Category Directors) Suzanne Quinn (Marketing Manager) (Marketing 12 Regulation 15 Payment for Wastage 13 Regulation 16 Payment for Shrinkage We charge for wastage in circumstances where that is not provided for in our Contract. We fail to provide the supplier with an estimate of the wastage costs (and basis upon which the estimate has been prepared) upon supplier request. We seek to charge a supplier for shrinkage where our Contract does not entitle us to do so. T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Charges Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) ( ( ( 6 We sell in store (security barriers, trolley advertising, Gondola end header POS, Power Aisle POS, In Aisle POS relating to value [offer], NPD or seasons, sampling of supplier products) and out of store (leaflet, magazine, digital via GHS, Co-branded/funded TVC s, Co-branded websites (e.g. Baby Club), Clubcard mailing insertions) advertising predominantly via Dunnhumby (95%) but also via commercial. 14

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation 14 Regulation 17 Designation and Training of Staff Compliance Risk How we manage the Risk Responsible Accountable The shrinkage charge is not based on an objective and reasonable estimate of the cost of shrinkage to us. We fail to provide a supplier with our estimate of the cost of shrinkage (on the basis for that estimate) upon request. We fail to designate and train appropriate members of our staff to be responsible for: (i) compliance with the regulations and; (ii) dissemination of information relating to the implementation of the regulations to other staff; Charges Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring T&Cs expressly cover this (Annex) Deals & Charges Webform Master Schedule of Deals & Charges Buyer Training Grocery Regulations Buyer Toolkit Regular Audit/Compliance Monitoring Role profiles reflect Grocery Regulations requirement We identify those in scope for training and those in scope for dissemination at least once annually and record that We train those in scope at least once annually We develop and maintain e- learning module Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Joe Manning & John Brennan (Category Directors) Colm O Connell (Head of Compliance & Regulation) Karen Devine (Training and Academy Manager) ( ( Sarah Gallagher (Legal Geraldine Casey (HR 15

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation Compliance Risk How we manage the Risk Responsible Accountable We fail to nominate a suitably qualified staff member to liaise with the Regulator in relation to the regulations (a Liaison Officer). We fail to confirm the nomination of a Liaison Officer to the Regulator. New Starter/Mover Training Process We retain evidence of the above for review Regular Audit/Compliance Monitoring We maintain the Liaison Officer role We ensure it is visible to the business and externally We ensure it is appropriately resourced/staffed (eg. deputy/generic email address) Annual letter to the Regulator confirming nomination or changes Colm O Connell (Head of Compliance & Regulation) Colm O Connell (Head of Compliance & Regulation) Sarah Gallagher (Legal Sarah Gallagher (Legal 15 Regulation 18 Annual Compliance Report We fail to submit an Annual Compliance Report by 31 st March each year (commencing 2017) detailing our compliance with the regulations. Obligation forms part of our overall Plan for Compliance and is managed through the Compliance Committee Colm O Connell (Head of Compliance & Regulation) Sarah Gallagher (Legal The Annual Compliance Report is not appropriately signed by a Company Director. Obligation forms part of our overall Plan for Compliance and is managed through the Compliance Committee Colm O Connell (Head of Compliance & Regulation) Sarah Gallagher (Legal The Annual Compliance Report does not contain the prescribed information. Obligation forms part of our overall Plan for Compliance and is managed through the Compliance Colm O Connell (Head of Compliance & Regulation) Sarah Gallagher (Legal 16

GROCERY REGULATIONS COMPLIANCE POLICY No. Grocery Regulations Obligation Compliance Risk How we manage the Risk Responsible Accountable Committee 16 Regulation 19 Maintenance of Records 7 We fail to retain the prescribed documents for a period of 6 years after the end of the financial year in relation to which the documents relate. Document Storage Roadmap (what is stored where) Single Document repository Webform Training Office Document Retention Policy and Procedure Regular Audit/Compliance Monitoring Brian Houlihan (/Marketing Finance Manager) Colm O Connell (Head of Compliance & Regulation) ( Duncan Anniss (Finance Sarah Gallagher (Legal Barry Davies (Head of Supply Chain) Barry Davies (Head of Supply Chain) Suzanne Quinn (Marketing Manager) (Marketing 7 Prescribed documents are Contracts, records of payments made by us to suppliers and by suppliers to us (including invoices, receipts, rebates, discounts, bank statements, electronic fund transfers and cheques), records of forecasts and estimates required to be provided under the regulations, names and addresses of each supplier, records of training and dissemination of information, records of the Board of Directors, records used in the preparation and submission of the Annual Compliance Report. 17

GROCERY REGULATIONS COMPLIANCE POLICY Annex 2: Grocery Regulations & Guidelines 18

STATUTORY INSTRUMENTS. S.I. No. 35 of 2016 CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016

2 [35] S.I. No. 35 of 2016 CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 1. Citation and commencement 2. Interpretation ARRANGEMENT OF REGULATIONS PART 1 PRELIMINARY MATTERS PART 2 CONTRACTS BETWEEN SUPPLIERS AND RELEVANT GROCERY GOODS UNDERTAKINGS 3. Prescribed classes 4. Grocery goods contracts 5. Variation, termination or renewal of grocery goods contracts 6. Goods or services from third party 7. Non-performance due to factors beyond reasonable control of party to contract 8. Forecasts of supply of grocery goods 9. Payment from supplier as a condition of stocking, displaying or listing 10. Payment terms and conditions 11. Promotions 12. Payment for marketing costs 13. Payment for retention, increased allocation or better positioning of shelf space 14. Payment for advertising or display of grocery goods 15. Payment for wastage 16. Payment for shrinkage PART 3 COMPLIANCE REQUIREMENTS FOR RELEVANT GROCERY GOODS UNDERTAKINGS 17. Designation and training of staff

[35] 3 18. Annual compliance report 19. Maintenance of records PART 4 ENFORCEMENT 20. Penal provisions

4 [35] S.I. No. 35 of 2016 CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 I, RICHARD BRUTON, Minister for Jobs, Enterprise and Innovation, in exercise of the powers conferred on me by section 63B (inserted by section 83 of the Competition and Consumer Protection Act 2014 (No. 29 of 2014)) of the Consumer Protection Act 2007 (No. 19 of 2007) considering it appropriate to do so having regard to the matters specified in subsection (1) of the said section 63B and having consulted with the Competition and Consumer Protection Commission, hereby make the following regulations: PART 1 PRELIMINARY MATTERS Citation and commencement 1. (1) These Regulations may be cited as the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016. (2) These Regulations shall come into operation on 30 April 2016 and, subject to paragraph (3), shall apply to grocery goods contracts entered into on or after that date. (3) Where a grocery goods contract entered into before 30 April 2016 is renewed on or after that date, these Regulations shall apply to the contract on and after the date of its renewal. Interpretation 2. (1) In these Regulations annual compliance report has the meaning assigned to it by Regulation 18; grocery goods contract means a contract for the sale or supply of grocery goods by a supplier to a relevant grocery goods undertaking; invoice means a written document, electronic transmission or equivalent request for payment provided by a supplier to a relevant grocery goods undertaking in respect of the sale or supply of grocery goods. (2) For the purposes of these Regulations, the annual turnover of a relevant grocery goods undertaking on any particular date is the annual turnover figure of the relevant grocery goods undertaking concerned for the financial year preceding that date. Notice of the making of this Statutory Instrument was published in Iris Oifigiúil of 5th February, 2016.

[35] 5 PART 2 CONTRACTS BETWEEN SUPPLIERS AND RELEVANT GROCERY GOODS UNDERTAKINGS Prescribed classes 3. (1) Any food or drink that is intended to be sold for human consumption including (a) any substance or thing sold or represented for use as food or drink for human consumption, (b) any substance or thing sold or represented for use as an additive, ingredient or processing aid in the preparation or production of food or drink for human consumption, and that is intended to be sold by a retailer as such an additive, ingredient or processing aid, and (c) intoxicating liquors, other than food or drink served or supplied on the premises of a grocery goods undertaking in the course of providing catering, restaurant or take-away services or any similar hospitality services, or intoxicating liquor served or supplied for consumption on the premises of a grocery goods undertaking, is prescribed as the class of grocery goods to which these Regulations apply. (2) A grocery goods undertaking engaged in the retail or wholesale of grocery goods in the State that has, or is a member of a group of related undertakings that has, an annual worldwide turnover of more than 50 million, is prescribed as a relevant grocery goods undertaking to which these Regulations shall apply. Grocery goods contracts 4. (1) A relevant grocery goods undertaking shall ensure that all of the terms and conditions of a grocery goods contract to which it is a party, are expressed in clear understandable language and recorded in writing. (2) A copy of a contract referred to in paragraph (1) shall be signed and retained by the supplier and the relevant grocery goods undertaking. Variation, termination or renewal of grocery goods contracts 5. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not vary, terminate or renew a grocery goods contract. (2) Paragraph (1) shall not apply where (a) the contract makes express provision for such variation, termination or renewal or agreed circumstances in which such variation, termination or renewal may occur, and (b) the contract specifies the period of written notice to be given prior to the variation, termination or renewal of the contract.

6 [35] (3) The period of notice in relation to the variation, termination or renewal of the contract to be given by a relevant grocery goods undertaking in accordance with paragraph (2) shall be reasonable, having regard to all the circumstances of the contract, including: (a) the duration of the contract; (b) the frequency with which the relevant grocery goods undertaking places orders; (c) the characteristics of the grocery goods, including their durability, seasonality and the external factors affecting their production; (d) in the case of a significant variation to previously agreed arrangements in relation to the supply or delivery of grocery goods, the value of any order for grocery goods affected by the variation in supply or delivery arrangements requested by the relevant grocery goods undertaking relative to the annual turnover of the supplier concerned. (4) For the purposes of this Regulation, variation includes variation in the frequency, timing or volume of the supply or delivery of grocery goods. Goods or services from third party 6. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not require a supplier to obtain goods or services from a third party from whom the undertaking receives payment for the arrangement. (2) Paragraph (1) shall not apply where- (a) the supplier s source for the goods or services fails to meet reasonable quality standards laid down for the goods or services by the relevant grocery goods undertaking, or (b) the undertaking who provides the goods or services to the supplier charges more for the goods or services than is charged for the supply of an equivalent quality and quantity of goods or services by the third party proposed by the relevant grocery goods undertaking. Non-performance due to factors beyond reasonable control of party to contract 7. (1) A party to a grocery goods contract shall not be liable for a delay or failure to perform the contract concerned resulting from circumstances beyond the reasonable control of the party concerned. (2) A party affected by circumstances referred to in paragraph (1) shall notify, in accordance with the terms specified in the contract, the other party of (a) the specific circumstances which caused the delay or failure in the performance of the contract, (b) the date and time in relation to which the circumstances causing the delay or failure in the performance arose, and

[35] 7 (c) where applicable, the date and time in relation to which the circumstances causing the delay or failure of the performance of the contract ceased. (3) Where the circumstances referred to in paragraph (1) continue for a specified continuous period as provided for in the grocery goods contract, either party may terminate the grocery goods contract by written notice in accordance with the terms specified in the contract. Forecasts of supply of grocery goods 8. (1) A relevant grocery goods undertaking shall, at the request of a supplier and following consultation with the supplier as to the basis of its preparation, prepare in good faith and with due skill, care and diligence, a forecast of grocery goods required by the relevant grocery goods undertaking in respect of a specified period. (2) The relevant grocery goods undertaking shall forward the supplier a copy of the forecast prepared under paragraph (1) together with confirmation in writing of the basis on which it was prepared. Payment from supplier as a condition of stocking, displaying or listing 9. (1) A relevant grocery goods undertaking shall not seek payment from a supplier as a condition of stocking, displaying or listing that supplier s grocery goods unless such payment is based on an objective and reasonable estimate of the cost to the undertaking of stocking, displaying or listing those grocery goods, and (a) in the case of the supply of grocery goods from a supplier to an individual store of a relevant grocery goods undertaking, payment is sought from the supplier in respect of grocery goods which have not been stocked, displayed or listed in that store in the previous year, or (b) in the case of the supply of grocery goods from a supplier to multiple stores of a relevant grocery goods undertaking, payment is sought from the supplier in respect of grocery goods from that supplier that have not been stocked, displayed or listed in at least 25 per cent of those stores in the previous year. (2) Where a relevant grocery goods undertaking seeks payment from a supplier in accordance with this Regulation, it shall, on request from the supplier, provide the supplier with (a) an estimate of the cost of stocking, displaying or listing the grocery goods, and (b) the basis on which this estimate has been prepared. (3) This Regulation shall not apply to payments made in respect of a promotion.

8 [35] Payment terms and conditions 10. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall pay a supplier for any grocery goods supplied to that undertaking (a) within 30 days of the date of receipt of the invoice for the grocery goods, or (b) within 30 days of the date of delivery of the grocery goods, whichever is the later. (2) Paragraph (1) shall not apply where the contract makes express provision for a different timeframe in respect of payments. (3) This Regulation is subject to the provisions of the European Communities (Late Payment in Transactions) Regulations 2012 (S.I. No. 580 of 2012). Promotions 11. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not, either directly or indirectly, compel a supplier to make a payment or grant any allowance in respect of a promotion of the grocery goods of that supplier in the premises of the relevant grocery goods undertaking. (2) Paragraph (1) shall not apply where the contract makes express provision for the making of a payment or granting of an allowance. (3) A relevant grocery goods undertaking shall give written notice to the supplier in accordance with the terms of the contract prior to a promotion, which notice shall specify (a) the duration of the promotion, (b) the frequency of the promotion, and (c) the quantity of grocery goods to be ordered for the promotion including the basis for such quantity. (4) Where a relevant grocery goods undertaking seeks payment from a supplier in accordance with this Regulation, it shall, on request from the supplier, provide the supplier with its estimate of the cost of the promotion and the basis on which this estimate has been prepared. Payment for marketing costs 12. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not seek payment from a supplier for marketing costs. (2) Paragraph (1) shall not apply where (a) the grocery goods contract makes express provision for such payment,

[35] 9 (b) the payment is based on an objective and reasonable estimate of the marketing costs, and (c) the payment is sought in accordance with the contract. (3) Where a relevant grocery goods undertaking seeks payment from a supplier in accordance with this Regulation, it shall, on request from the supplier, provide the supplier with an estimate of the marketing costs and the basis on which the estimate has been prepared. (4) This Regulation shall not apply to payments made in respect of a promotion. Payment for retention, increased allocation or better positioning of shelf space 13. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not, either directly or indirectly, compel a supplier to make a payment or grant any allowance for the retention, increased allocation or better positioning of shelf space for the grocery goods of the supplier. (2) Paragraph (1) shall not apply where the grocery goods contract makes express provision for such payment or allowance, and the payment or allowance is sought in accordance with the contract. (3) This Regulation shall not apply to a payment or allowance made or granted in respect of a promotion. Payment for advertising or display of grocery goods 14. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not, either directly or indirectly, compel a supplier to make any payment or grant any allowance for the advertising or display of the grocery goods of the supplier in the premises of the relevant grocery goods undertaking. (2) Paragraph (1) shall not apply to payments made in respect of a promotion. Payment for wastage 15. (1) Subject to paragraph (2), a relevant grocery goods undertaking shall not seek payment from a supplier for wastage occurring at the premises of the undertaking. (2) Paragraph (1) shall not apply where: (a) the grocery goods contract makes express provision for such payment; (b) the grocery goods contract makes express provision for an agreed average wastage cost; (c) the grocery goods contract makes express provision for the circumstances, where wastage arises from the negligence or fault of the supplier, in which the supplier will be required to make payments to cover wastage of the supplier s goods at premises of the relevant grocery goods undertaking;

10 [35] (d) the payment is sought in accordance with the contract; (e) the payment is based on an objective and reasonable estimate of the cost of the wastage to the undertaking. (3) Where a relevant grocery goods undertaking seeks payment from a supplier in accordance with this Regulation, it shall, on request from the supplier, provide the supplier with its estimate of the cost for wastage and the basis on which this estimate has been prepared. Payment for shrinkage 16. (1) Subject to paragraphs (2) and (4), a relevant grocery goods undertaking shall not seek payment from a supplier for shrinkage. (2) Paragraph (1) shall not apply where (a) the grocery goods contract makes express provision for such payment, (b) the payment is sought in accordance with the contract, and (c) the payment is based on an objective and reasonable estimate of the cost of the shrinkage to the undertaking. (3) Where a relevant grocery goods undertaking seeks payment from a supplier in accordance with this Regulation, it shall, on request from the supplier, provide the supplier with its estimate of the cost for shrinkage and the basis on which this estimate has been prepared. (4) This Regulation shall not apply to a relevant grocery goods undertaking engaged in the wholesale of grocery goods. PART 3 COMPLIANCE REQUIREMENTS FOR RELEVANT GROCERY GOODS UNDERTAKINGS Designation and training of staff 17. (1) A relevant grocery goods undertaking shall, as soon as practicable after the commencement of these Regulations (but not later than 3 months after such commencement), designate and train appropriate members of its staff to be responsible (a) for compliance with these Regulations, and (b) for the dissemination of information in relation to the implementation of the Regulations to other staff in the undertaking. (2) A relevant grocery goods undertaking shall nominate a suitably qualified staff member designated under paragraph (1), (in this Regulation referred to as a liaison officer ) to liaise with the Commission in relation to these Regulations.

[35] 11 (3) A relevant grocery goods undertaking shall, as soon as practicable after the nomination of a liaison officer (and any replacement liaison officer), confirm his or her name, position and contact details to the Commission. Annual compliance report 18. (1) Subject to paragraph (4), a relevant grocery goods undertaking shall, as soon as practicable, but not later than 31 March each year, submit a report (in these Regulations referred to as an annual compliance report ) to the Commission detailing the undertaking s compliance with these Regulations. (2) The annual compliance report shall (a) be signed by a director of, or secretary to, the relevant grocery goods undertaking, and (b) be submitted in such form and manner as may be specified by the Commission. (3) The annual compliance report shall include (a) a detailed and accurate account of the relevant grocery goods undertaking s compliance with the requirements of these Regulations, including where a breach or alleged breach of these Regulations has been identified by, or notified to, the undertaking, and the steps taken to rectify it, (b) the name, position and contact details of the staff of the undertaking designated under Regulation 17 for the period of the annual compliance report, (c) details of the training of staff undertaken in accordance with Regulation 17, including the number, position and location of staff trained, the person or persons undertaking such training, the nature of the training and the frequency of both new and refresher training undertaken, (d) the dissemination in accordance with Regulation 17 of information on the implementation of these Regulations to staff of the relevant grocery goods undertaking, including the nature, format and frequency of the dissemination of such information, and (e) the names and addresses of all suppliers with whom the relevant grocery goods undertaking entered into, renewed or terminated contracts during the period covered by the annual compliance report. (4) Notwithstanding paragraph (1), the first annual compliance report of a relevant grocery goods undertaking shall cover the period from 30 April 2016 up to, and including, 31 December 2016.

12 [35] Maintenance of records 19. (1) A relevant grocery goods undertaking shall maintain copies of the following documents and records for inspection by the Commission: (a) contracts between the relevant grocery goods undertaking and its suppliers (including a contract varied, terminated or renewed in accordance with its terms); (b) records of payments made by the relevant grocery goods undertaking to its suppliers including invoices, receipts, rebates, discounts, bank statements, electronic fund transfers and cheques; (c) records of payments made by a supplier to the relevant grocery goods undertaking including invoices, receipts, rebates, discounts, bank statements, electronic fund transfers and cheques; (d) records of forecasts and estimates provided to suppliers by the relevant grocery goods undertaking under Regulations 8, 9, 11, 12, 15 and 16; (e) the names and addresses of each supplier with whom the relevant grocery goods undertaking entered into, renewed or terminated a contract; (f) records of training and dissemination of information provided by the relevant grocery goods undertaking under Regulation 17; (g) records of the board of directors of the relevant grocery goods undertaking; (h) records used in the preparation and submission of annual compliance reports. (2) The documents and records referred to in paragraph (1) shall be retained by a relevant grocery goods undertaking for a period of 6 years after the end of the financial year in relation to which the information, documents or records relate. PART 4 ENFORCEMENT Penal provisions 20. The following Regulations are declared to be penal provisions for the purposes of Chapter 5 (inserted by section 83 of the Competition and Consumer Protection Act of 2014 (No. 29 of 2014)) of Part 3 of the Consumer Protection Act of 2007 (No. 19 of 2007): (a) Regulation 4(1) and 4(2); (b) Regulation 5(1) and 5(3);

[35] 13 (c) Regulation 6(1); (d) Regulation 7(2); (e) Regulation 8(1) and 8(2); (f) Regulation 9(1) and 9(2); (g) Regulation 10(1); (h) Regulation 11(1), 11(3) and 11(4); (i) Regulation 12(1) and 12(3); (j) Regulation 13(1); (k) Regulation 14(1); (l) Regulation 15(1) and 15(3); (m) Regulation 16(1) and 16(3); (n) Regulation 17; (o) Regulation 18; (p) Regulation 19. GIVEN under my Official Seal, 27 January 2016. RICHARD BRUTON, Minister for Jobs, Enterprise and Innovation.

14 [35] EXPLANATORY NOTE (This note is not part of the Instrument and does not purport to be a legal interpretation.) This Statutory Instrument introduces regulations governing certain practices in the commercial relationship between suppliers and retailers/wholesalers relating to the supply of food and drink and sets out the compliance requirements on retailers/wholesalers in that regard. BAILE ÁTHA CLIATH ARNA FHOILSIÚ AG OIFIG AN tsoláthair Le ceannach díreach ó FOILSEACHÁIN RIALTAIS, 52 FAICHE STIABHNA, BAILE ÁTHA CLIATH 2 (Teil: 01-6476834 nó 1890 213434; Fax: 01-6476843) nó trí aon díoltóir leabhar. DUBLIN PUBLISHED BY THE STATIONERY OFFICE To be purchased from GOVERNMENT PUBLICATIONS, 52 ST. STEPHEN'S GREEN, DUBLIN 2. (Tel: 01-6476834 or 1890 213434; Fax: 01-6476843) or through any bookseller. 3.81 Wt. (B31829). 285. 1/16. Essentra. Gr 30-15.

CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 S.I. NO. 35 OF 2016 GUIDELINES 18 March 2016 1

1. INTRODUCTION 1. The legal basis for these regulations is contained in the Competition and Consumer Protection Act 2014, which came into force on 31 October 2014. Part 6 of that Act (which inserted a new section into the Consumer Protection Act 2007) contains enabling provisions which gives the Minister for Jobs, Enterprise and Innovation the power to introduce regulations to regulate certain practices in the grocery goods sector. They do not cover any other issues. 2. The Regulations are divided into four parts as follows: 1. Preliminary Matters; 2. Contracts between Suppliers and Retailer or wholesaler; 3. Compliance Requirements for Retailer or wholesalers; 4. Enforcement. 3. These Guidelines seek to provide information and guidance on the main provisions of the Regulations. As the operation of the Regulations will inevitably give rise to further practical issues, these Guidelines cannot be a final or definitive statement on the Regulations. 4. These Guidelines have been compiled without prejudice to other legal provisions covering contracts including the Declaration in respect of Vertical Agreements and Concerted Practices and, more generally, under Section 4 of the Competition Act 2002. 5. Public enforcement of these Regulations lies with the Competition and Consumer Protection Commission (CCPC), which is independent in the carrying out of its functions. Further information will be made available from time to time on the CCPC s website www.ccpc.ie. 2

2. SCOPE OF THE REGULATIONS 1. These Regulations only apply to sales of food and drink as defined in Section 63A(a) of the Consumer Protection Act 2007 and do not apply to any other type of grocery goods. In particular, they do not apply to toiletries, household cleaning products or garden plants/bulbs (as defined in Section 63A(b), (c) and (d) of the 2007 Act) nor do they apply to the supply of raw material in the agriculture sector to processors (for instance supply of milk to creameries or animals or meat to processors) or animal feed. 2. The worldwide turnover threshold of 50 million applies to sales of food and drink products generated by retailer or wholesalers operating in the State. The threshold will not apply to turnover generated by the retailer or wholesaler for products other than food and drink (as defined). 3. These Regulations only apply to direct suppliers (whether they are located within the State or not) who have a contractual relationship with a retailer or wholesaler and not to any other grocery goods undertakings as defined in Section 63A of the Consumer Protection Act 2007 (e.g. they do not apply to the sale of food and drink by wholesalers to retailers who are franchisees or part of a symbol group of that wholesaler). It should be noted that retailers (who have an annual worldwide turnover above the 50 million threshold and who are franchisees and belong to a symbol group of such a wholesaler) will, if they enter into a grocery goods contracts with direct suppliers in their own right, be subject to the application of the Regulations only in respect of such grocery goods contracts. 4. The Regulations shall apply to contracts entered into on or after 30 April 2016 as well as to contracts (which were entered into before that date) but which are renewed on or after that date. 5. Both parties should conduct their trading relationships in good faith and in a fair, open and transparent manner and to respect the terms and conditions of the agreed contracts. 6. Any term of a grocery goods contract which directly or indirectly contravenes, waives or restricts a provision of the Regulations is not binding or enforceable. 7. For the purposes of these Regulations, the terms payment and allowance are defined as follows: payment : means any compensation, consideration, allowance or inducement in any form (monetary or otherwise) and includes more favourable contractual terms; 3