Coles launches supplier charter and appoints Jeff Kennett to handle disputes

Paul Snell is managing editor at Supply Management
7 August 2014

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7 August 2014 | Paul Snell

Australian supermarket Coles has appointed the former premier of the state of Victoria Jeff Kennett to act as an arbitrator in disputes with its suppliers.

At the same time, the retailer has published a supplier charter, which contains seven commitments concerning its behaviour including dealing in good faith, transparency in supplier relations and a new “fast-track, low-cost supplier dispute resolution framework”.

“We recognise the importance of building strong, collaborative and wherever possible, long-term partnerships. We are already changing the way we do business by introducing more long-term contracts which help suppliers to plan and invest in the future,” said John Durkan, managing director of Coles.

“A key measure to strengthen confidence is to establish a rigorous, independent third party process to resolve disputes, and to ensure Coles is held accountable.”

Appointed to the part-time role for the next three years, Kennett will be one option in the dispute resolution process. Suppliers could choose referral to a dispute resolution manager in confidence, an internal review by Coles’ senior management, or opt to approach Kennett, whose decisions will be binding on the supermarket. Kennett will also report annually on his activity, with suggestions of improvements to the charter and framework.

“Coles and its many millions of customers are among the biggest buyers of fresh produce and other groceries. It is an important relationship. If it works well, it will serve the interests not only of Coles and Australia but it will also help build a platform that will enable Australia’s food industry to compete effectively in the major overseas markets to our north,” said Kennett.

“I hope my services as the independent arbiter will rarely be called upon. But if there are disputes that require intervention, I can assure both and all parties of my complete independence in determining a common sense solution.”

Industry body Ausveg gave the appointment a “cautious welcome”.

The supermarket is currently facing legal action from the Australian Competition and Consumer Commission after what the watchdog described as “unconscionable conduct” when it attempted to secure rebates from suppliers.

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