Coles, ACCC court case to run 10 weeks

Coles, ACCC court case to run 10 weeks

Coles is set to defend allegations it pressured 200 suppliers into joining a contractual program in order for the supermarket to stock their products, with a 10-week trial involving evidence from up to 40 witnesses.

In May, the Australian Competition and Consumer Commission launched proceedings alleging Coles engaged in unconscionable conduct in relation to supplier contracts and rebates in return for supply chain improvements.

The ACCC claims Coles took advantage of its superior bargaining position.

The ACCC claims Coles took advantage of its superior bargaining position.

It is alleged if small suppliers declined to agree to pay the rebate, Coles personnel were instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.

The consumer watchdog has claimed the supermarket’s Active Retail Collaboration program - developed in 2011 and expected to improve earnings by up to $16 million - contravened Australian Consumer Law.

In a directions hearing in the Federal Court in Melbourne on Friday, lawyer for Coles Mark Moshinsky, QC, said the supermarket would call on witnesses ranging from “frontline” staff such as category managers through to senior management.


Coles claims the program was voluntary and denies it threatened to remove recalcitrant suppliers, claiming it maintained trading relationships with 32 suppliers who did not agree to participate.

One of the suppliers named in the statement of claim who refused to sign up was Red Bull.

A trial date has been set for April 13, with mediation expected to occur in mid-December.

Justice Michelle Gordon criticised lawyers for Coles on Friday for not handing over particular documents to the plaintiffs. “[If] it’s your defence, they’re [ACCC] are entitled to see it,” she said. “They are the ACCC. Rightly or wrongly ... they take time.”

The ACCC declined to comment on the proceedings, but it is understood it has until late September to submit its witness list.

The commission had struggled to get co-operating witnesses and was forced to compel all relevant witnesses to provide evidence, using its information-gathering powers.

The ACCC claims Coles used undue influence and unfair tactics against suppliers to obtain payments of the rebate and took advantage of its superior bargaining position and gave suppliers insufficient time to assess the value, if any, of the program to their business.

It is seeking pecuniary penalties, declarations, injunctions and costs.

These proceedings arise from a broader investigation, which is continuing, by the ACCC into allegations suppliers were being treated inappropriately by the major supermarket chains.

The action comes just weeks after Coles was found guilty in the Federal Court of having misled customers when it advertised pre-cooked bread as baked fresh. It faces a fine of up to $1.1 million.

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