Watchdog eyes supermarket tactics
Coles and Woolworths may have misused their market power by demanding additional payments from suppliers to their supermarkets, imposing unfair penalties and discriminating against suppliers in favour of their own in-house brands, the head of the competition watchdog says.
Australian Competition and Consumer Commission chairman Rod Sims also said the regulator was close to finalising an investigation into the petrol discounts offered by the large supermarkets.
Mr Sims made the comments to the Senate economics estimates committee in Canberra on Wednesday night.
He confirmed that 50 businesses that supply the supermarket giants had spoken to the ACCC in the past year and it was still investigating their claims.
‘‘Now that we understand the broad nature and context of the alleged conduct, it is evident that, if fully put to proof, this conduct may constitute a breach of the [Competition and Consumer] Act and so it is now being investigated in even more detail,’’ he said.
Mr Sims said the alleged conduct includes:
- persistent demands for additional payments from suppliers, above and beyond that negotiated in their terms of trade
- the imposition on suppliers of penalties that did not form part of any negotiated terms of trade, and which apparently do not relate to actual costs incurred by the major supermarket chains as a result of the conduct which has led to the penalty being imposed
- threats to remove products from supermarket shelves or otherwise disadvantage suppliers if claims for extra payments or penalties are not paid
- failure to pay prices agreed with suppliers; and conduct discriminating in favour of homebrand products
The ACCC was now using compulsory information powers to investigate Coles and Woolworths’ treatment of other suppliers, but has not yet decided whether it will take legal action, Mr Sims said.
Meanwhile, he expects the ACCC will finish an investigation into petrol discount vouchers offered to customers who purchase a minimum amount from a supermarket.
He said the ACCC was looking as whether Coles and Woolworths offers ‘‘may have the effect of distorting competition between fuel retailers in circumstances where, having regard to retail fuel margins, the discounts may be difficult or even impossible for other fuel retailers to match’’.
A Woolworths spokesperson was unavailable for comment.
Managing director of Coles' owner Wesfarmers, Richard Goyder, said: "We'll co-operate fully with the ACCC. We've got robust processes to ensure we behave in a ethical way to all our stakeholders (so) we'll see where that goes."