The era of informal “handshake agreements” and verbal contracts within New Zealand’s supermarket industry is drawing to a close, according to grocery commissioner Pierre van Heerden. 

He is now emphasising the importance of formal agreements, urging suppliers not to succumb to pressure without having the opportunity to negotiate terms with supermarkets. 

Van Heerden said the new rules will take effect this month and aim to improve the effectiveness of negotiations between major supermarkets and suppliers.

“A handshake or verbal agreement is no longer good enough, and suppliers should not feel pressured into signing an agreement without the chance to negotiate the terms with a supermarket first,” explained van Heerden.

“As one of the largest sectors in New Zealand, Kiwi shoppers should trust that they are getting a fair deal at the check-out and that supermarkets are treating suppliers of their trusted products fairly and transparently.”

New Zealand’s supermarket sector accounts for a NZ$25 billion market (AU$22.9 billion), and the commissioner said the new Grocery Supply Code – which took full effect in March – will, for the first time, provide transparency and certainty for suppliers and ensure appropriate and comprehensive agreements with supermarkets. 

“As one of the largest sectors in New Zealand, Kiwi shoppers should trust they are getting a fair deal at the check-out,” added van Heerden, adding that suppliers of their trusted products are being treated fairly and transparently by supermarkets.