An investigation has been launched by the head of the Australian Competitor and Consumer Commission (ACCC), Rod Sims, to examine claims of improper practice by Australia’s dominant supermarket chains, Coles and Woolworths.
The two retailers, which between them receive an estimated 70 per cent of Australian consumers’ grocery spending, are accused of breaching the law and using market power to bully suppliers over prices and supply.
The Sydney Morning Herald reports that the ACCC chairman investigated the following allegations: repeated demands for extra payments from suppliers that exceeded those formerly negotiated; imposition of penalties unrelated to actual costs incurred; threats to remove suppliers’ products from shelves should they not comply; reneging on price agreements with suppliers; and discrimination against supplier products in favour of homebrand products.
The ACCC states that it will use its compulsory information powers to collect evidence and take appropriate action.
There have been reports that Sims gave conditional support for a supermarket code of conduct enforceable under the Competition and Consumer Act, which would fine retailers for breaches.
The managing director of Coles' parent Wesfarmers, Richard Goyder, responded dismissively to Sims' calls and defended the company's existing internal checks.
'The last thing we need in this country at the moment, with productivity challenges, is creating more layers of bureaucracy when they’re not required,” Goyder is reported to have said.
