Commerce (Grocery Sector Covenants) Amendment Act 2022

1: Title
This Act is the Commerce (Grocery Sector Covenants) Amendment Act 2022.
2: Commencement
This Act comes into force on the day after the date on which it receives the Royal assent.
3: Principal Act
This Act amends the Commerce Act 1986 2022-06-30 Commerce Act 1986
1: Amendment to Part 2 of Act (which relates to restrictive trade practices)
4: New sections 28A to 28D inserted
After section 28
28A: Certain grocery-related covenants are treated as prohibited and unenforceable
1: A covenant to which this section applies must be treated, for the purpose of section 27 or 28
2: This section applies to any of the following in which a designated grocery retailer has an interest:
a: a restrictive or positive covenant that has the purpose, or has or is likely to have the effect, of impeding the development or use of land or a site as—
i: a retail grocery store; or
ii: any other retail store that is likely to compete with a retail grocery store operated by the designated grocery retailer:
b: a restrictive or positive covenant, and the provisions of any other contracts, arrangements, understandings, or covenants, if—
i: the restrictive or positive covenant has 1 or more of the same parties as the contract, arrangement, understanding, or covenant; and
ii: taken together, the restrictive or positive covenant and the provisions have the purpose, or have or are likely to have the effect, of impeding the development or use of land or a site as—
A: a retail grocery store; or
B: any other retail store that is likely to compete with a retail grocery store operated by the designated grocery retailer:
c: an exclusivity covenant or other provision in a lease that has the purpose, or has or is likely to have the effect, of impeding another person from operating—
i: a retail grocery store; or
ii: any other retail store that is likely to compete with a retail grocery store operated by the designated grocery retailer:
d: an exclusivity covenant or other provision in a lease, and the provisions of any other contracts, arrangements, understandings, or covenants, if—
i: the lease has 1 or more of the same parties as the contract, arrangement, understanding, or covenant; and
ii: taken together, the exclusivity covenant or other provision in the lease and the provisions have the purpose, or have or are likely to have the effect, of impeding another person from operating—
A: a retail grocery store; or
B: any other retail store that is likely to compete with a retail grocery store operated by the designated grocery retailer.
3: However, this section does not apply to—
a: a covenant that is reasonably necessary for environmental impact reasons connected with a retail fuel site within the meaning of the Fuel Industry Act 2020
b: a covenant in respect of which the Commission has granted an authorisation under section 58 section 65A
4: In this section, unless the context otherwise requires,— covenant designated grocery retailer
a: Foodstuffs North Island Limited, Foodstuffs South Island Limited, and Woolworths New Zealand Limited:
b: a person that is designated as a designated grocery retailer by the Governor-General by Order in Council made under section 28C
c: a person that is a successor to a person referred to in paragraph (a):
d: a person that is a franchisee, or a transacting shareholder (within the meaning of the Co-operative Companies Act 1996
e: a person that is an interconnected body corporate or associated person (within the meaning of section 47 exclusivity covenant grocery product retail grocery store
5: A designated grocery retailer has an interest
a: if the person is or was a party to the covenant; or
b: if the person is or was a party to any contract, arrangement, or understanding that resulted in the giving of the covenant or to the inclusion of the covenant in a lease; or
c: if the person required, or is deemed by section 28(6)
d: if the person gives effect to, carries out, or enforces the terms or provisions of the covenant; or
e: if the person takes any action described in section 28(5)
6: Subsection (1) does not limit any other provision of this Part.
7: If this section applies, the reference in section 61(6)
28B: Process for voluntary removal of grocery-related covenant from register of land
1: This section applies if—
a: a designated grocery retailer is satisfied that they have an interest in a covenant—
i: to which section 28A
ii: that is noted on the record of title created under section 12 of the Land Transfer Act 2017
b: as at the commencement date, the designated grocery retailer would, if not for Part 2 section 301 or 307B of the Property Law Act 2007
2: The designated grocery retailer may—
a: revoke the covenant; or
b: modify the covenant so that section 28A
3: The revocation or modification must be effected using the process for the notation of covenants set out in section 116 of the Land Transfer Act 2017
4: However, despite section 116(5) of the Land Transfer Act 2017
5: This section is repealed on the second anniversary of the commencement date.
6: In this section,— burdened land benefited land Part 2 commencement date designated grocery retailer section 28A has an interest section 28A
28C: Process for designations for purpose of section 28A
1: The Governor-General may, on the recommendation of the Minister, make an Order in Council designating a person as a designated grocery retailer for the purpose of section 28A
2: The Minister may recommend to the Governor-General that a person be designated as a designated grocery retailer only after receiving a recommendation from the Commission.
3: The Commission may recommend to the Minister that a person be designated as a designated grocery retailer only—
a: after consulting the person about the proposed designation (including the Commission’s reasons for proposing to recommend the designation); and
b: if the Commission has taken into account the following criteria:
i: whether the person carries on, or is likely to carry on, a business of supplying all or a majority of categories of grocery products to consumers; and
ii: whether designation of the person as a designated grocery retailer would be likely to promote competitive neutrality (that is, a level playing field) or to otherwise promote competition, having regard to the extent to which the person supplies, or is likely to supply, groceries in competition with 1 or more designated grocery retailers.
4: The Commission’s recommendation must advise the Minister whether the Commission considers that those criteria are met.
5: In deciding whether to make a recommendation, the Minister may do any of the following:
a: accept the Commission’s recommendation if the Minister is satisfied that those criteria are met:
b: reject the Commission’s recommendation:
c: request that the Commission reconsider any matter (such as an error, an oversight, or competing policy interests):
d: make any other decision that the Minister considers is in the public interest.
6: The Commission must make the recommendation publicly available as soon as practicable after making it, including a statement of its reasons for making the recommendation.
7: An order made under this section is secondary legislation ( see Part 3 of the Legislation Act 2019 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act.
28D: Commission may require designated grocery retailer to supply information about contract, etc, to which section 28A may apply
1: For the purpose of assessing compliance with the provisions listed in subsection (2), the Commission may, by written notice, require a designated grocery retailer to—
a: supply to the Commission information relating to any contract, arrangement, understanding, or covenant (including any process relating to the negotiation or renegotiation of that contract, arrangement, understanding, or covenant)—
i: to which section 28A
ii: that contains a provision to which section 28A
b: supply that information within the time and in the manner specified in the notice.
2: The provisions are—
a: sections 27, 28, 28A, 36, and 47
b: sections 7, 8, 23, and 26B of the Fair Trading Act 1986
3: Part 7 section 98
4: This section does not limit any of the Commission’s other functions, duties, or powers under this Act or any other legislation.
5: In this section, designated grocery retailer section 28A
2: Transitional and savings provisions
5: Schedule 1AA amended
In Schedule 1AA
a: insert the Part set out in the Schedule
b: make all necessary consequential amendments.