Wesfarmers and Coles management admitted they “crossed the line” in aggressive dealings with suppliers.
The news comes after the ACCC and Coles agreed to seek consent orders to resolve the unconscionable conduct proceedings relating to Coles dealing with suppliers in 2011.
According to the release:
The first proceedings alleged that Coles engaged in unconscionable conduct by the way it sought rebates from suppliers under its “Active Retail Collaboration” (ARC) program.
The second proceedings alleged that Coles engaged in unconscionable conduct against certain suppliers in relation to claims for various payments, including payments for purported profit gaps, waste and markdowns, and late and short deliveries.
Fairfax media reports that Coles has agreed to a $10 million fine and up to $16 million in reparations to the suppliers affected. Coles managing director John Durkin released a statement saying:
“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 sincerely regrets and apologises for its conduct in these dealings.”
Gary Dawson, the CEO of the Australian Food and Grocery Council told Fairfax that “the decision by Coles to make a full apology and its admission that it ‘crossed the line’ will help to establish where that line is with regard to the behaviour of supermarket retailers in their trading relationships with suppliers.”
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