Union wants ACCC to broaden investigation into Coles

Date: 20.10.2014

TWU says competition regulator needs to look at how the retailer treats its transport and logistics suppliers

Union wants ACCC to broaden investigation into Coles

The ACCC alleges Coles engaged in unconscionable conduct.

The Australian Competition and Consumer Commission (ACCC) is being urged to broaden its investigation of retailer Coles’ treatment of its suppliers.

The competition regulator is prosecuting Coles for allegedly engaging in unconscionable conduct with small business suppliers.

The Transport Workers Union (TWU) now wants the ACCC to look at the approach Coles takes toward its transport and logistics suppliers.

"From the farm gate to Australia’s kitchen tables, Coles is a company driven by an insatiable hunger to maximise profit, regardless of the cost to suppliers, small business and families," TWU assistant national secretary Michael Kaine says.

The ACCC is alleging Coles used its bargaining power to demand payments from suppliers when it know or ought to have known that it had no right to do so.

It claims Coles applied undue pressure to get its way, including threatening measures that were commercially detrimental to suppliers and also withholding money owed to suppliers when it was not entitled to do so.

According to the ACCC, Coles wanted suppliers to cover its "profit gaps" – the difference between the profit Coles wanted to make on a particular good and the actual amount it achieved.

Furthermore, Coles is accused of trying to force suppliers to pay losses the retailer incurred from marking down products.

"The ACCC alleges that Coles took advantage of its superior bargaining position by demanding money from suppliers that it was not lawfully entitled to and was, in all the circumstances, unconscionable," ACCC chairman Rod Sims says.

In a statement, Coles says it rejects the ACCC’s claims.

The supermarket retailer says the allegations relate to dealings with five suppliers three years ago.

"The allegations involve communications and negotiations about the failure to deliver products in the lead-up to the Christmas 2011 trading period, as well as waste and damage to products and the profitability of products," Coles says.

"The allegations include a day previously called Profit Day. This was an administrative day where discussions were held with suppliers in relation to outstanding claims and additional business opportunities.

"These discussions, including those concerning profit gaps, were aimed at improving the profitability of products. Profit gaps can occur when a product’s financial performance fails to meet business plans or expectations discussed between Coles and its suppliers. Products with poor sales performance limit Coles’ ability to deliver value to customers."

Coles says its employees are trained to ensure suppliers are dealt with "in an open and fair manner".

Meanwhile, the TWU is using the release of a study from Life Insurance Finder to push the Federal Government to support the Road Safety Remuneration Tribunal (RSRT).

The study found that the transport, postal and warehousing sector recorded the most employee deaths in 2012 at 65.

"We need a greater focus on road safety in this country, not a weaker one. The Road Safety Remuneration Tribunal needs to be preserved," Kaine says.