Council welcomes proposals on unfair business conduct

Press Release: 24 September 2019

Food & Grocery Council welcomes proposals on unfair business conduct

The New Zealand Food & Grocery Council welcomes the Government’s proposals to introduce legislation prohibiting “unconscionable”, or unfair, business conduct and protecting businesses from unfair contract terms.

Chief Executive Katherine Rich says this is a pro-business move and will particularly benefit small food and grocery manufacturers.

“We’ve advocated for many years that New Zealand business law dealing with unfair practices needed to be strengthened and aligned with Australian law. These proposals are well on the way to achieving that.

“There’s no one-size-fits-all solution for small businesses but these proposals will make a huge difference.

“FGC submitted on the proposals in the Government’s discussion document and, like other submitters, provided examples of unfair conduct and contracts our members had experienced, and the impacts, such as negative cash flow, stress, business interruption, reduced profitability, and a reduced ability to focus on growing their business.

“We said such prohibitions should capture only particularly egregious conduct, and that most typical business dealings and behaviour should not be affected, and the Government has listened. These proposals don’t undermine businesses’ ability to compete, participate in robust negotiations, or enter into contracts.

“It was important that whatever changes were made brought us into line with other countries we trade with, and that’s happened, with these proposals being modelled on Australian law.

“There, they have had some form of prohibition on ‘unconscionable conduct’ since 1986, and their Unfair Contract Terms regime was expanded in 2016 to protect small businesses.

“This is particularly relevant, considering the Single Economic Market benefits for New Zealand having law that is more consistent with Australia’s.

“These proposals will also complement the Commerce Commission’s new powers to accept enforceable undertakings and to undertake competition studies, and could lead to reduced costs for businesses, especially small businesses.”

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