Companies start dobbing in supermarkets

It’s the issue everyone knows about, but nobody is willing to discuss publically – the major supermarkets engaging in anti-competitive, bullying behaviour and putting Aussie companies and farmers out of business.

Late last month the Australian Competition and Consumer Commission (ACCC) called on companies to dob in the dodgy behaviour of Coles and Woolworths and some have already started talking.

”If people have concerns, come to us with the evidence,” ACCC chairman Rod Sims said at the time.

“It is all very well for some of the industry representatives and others to talk about behaviour that is going on there, but we need evidence.”

Anonymous complaints

But the names of the companies are not known, as the ACCC promised confidentiality for companies and individuals reporting on the actions of the supermarket giants.

This situation is a problem it itself, as it is well known within the industry, but rarely said on the record, that criticising the major supermarkets is suicide for manufacturers and farmers.

Australian Manufacturing Workers Union (AMWU) National Secretary of the Food and Grocery division, Jennifer Dowell, told Food Magazine companies are to afraid of the repercussions of speaking out publically against the major supermarkets.

“If a company like Nestle came out and said ‘we’re going to buy a stake in Coles, and dominate the shelves with our products,’ there would be uproar, it would be a huge scandal, but when the supermarkets do it, it’s a non-issue,” she said.

“That just doesn’t make sense..

“If I control a market I can just put all my own products in it, and as I have said at the inquiry, if I am mother pushing a trolley through Woollies with three screaming kids, and all they have is their own brand, I am not going to pack my kids up into the car and drive around to find non-existent corner stores that stock the product I actually want.

“They try to say they’re allowing consumers to decide, but they are making all the decisions for us, and it’s time we opened our eyes and saw that.”

On the basis of anonymity, the consumer watchdog has received complaints about “unconscionable conduct” by the supermarkets.

Sims told The Sydney Morning Herald yesterday there have been ”approaches from suppliers relating to allegations about the behaviour of the supermarkets”.

Some big names were amongst those reporting problems with the supermarket’s actions, Sims said.

Unreasonable demands on suppliers

One of the major complaints of the companies is that Coles and Woolworths request a higher output of a manufacturers’ product to meet demand, which increases costs for the company.

But instead of sticking to the price agreed on when the deal is initially made, the supermarket then requests that the supplier lowers the price.

If they refuse, they often find their product missing from supermarket shelves, and an excess of stock that they cannot store or sell in time.

And as the number of branded products decreases, the private label products offered by supermarkets continue to dominate shelves.

Last year Woolworths announced plans to double the number of private label brands in the next five years, while the Australian Food and Grocery Council commissioned a report showing that if the current environment continues, 130 000 workers in the food and grocery sector will be out of a job by 2020.

The AFGC, and a number of other companies and representative bodies, wants a Supermarket Ombudsman appointed to oversee the behaviour of the supermarkets.

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