Australian supermarket Coles admits 'unconscionable conduct' toward suppliers

Will Green is news editor of Supply Management
17 December 2014

Australian supermarket Coles has admitted “unconscionable conduct” in its dealings with suppliers as part of a proposed AUS$10 million (£5.2 million) settlement with competition authorities.

Coles and the Australian Competition & Consumer Commission (ACCC) have made submissions to the Federal Court after agreeing to resolve the ACCC’s legal proceedings against the supermarket.

Under the deal, which must be agreed by the court, Coles will pay penalties of around AUS$10 million and costs of AUS$1.25 million (£654,000).

The ACCC had alleged Coles had “engaged in unconscionable conduct” by seeking ongoing rebates from smaller suppliers as part of its 2011 “Active Retail Collaboration” programme, and also by asking for payments for “purported profit gaps, waste and markdowns and late and short deliveries”.

Under the settlement Coles will give an “enforceable undertaking” to the ACCC to allow an independent review to decide if suppliers are eligible for refunds.

John Durkan, managing director at Coles, said: “Coles unconditionally apologises and accepts full responsibility for its actions in these supplier dealings.

“I believe that in these dealings with suppliers, Coles crossed the line and regrettably treated these suppliers in a manner inconsistent with acceptable business practice.”

Coles said it had established a supplier charter and “best practice compliance framework”, as well as a training programme “for all buyers on best practice commercial dealings”.

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