Supermarket practices need to be tested in court: AFGC

The AFGC says the practices of Australia’s leading supermarkets should be tested in court, following the ACCC’s claims that Coles has engaged in “unconscionable conduct” with its suppliers.

The ACCC has instituted proceedings in against Coles in the Federal Court, with ACCC chairman Rod Sims claiming, “The ACCC alleges that Coles took advantage of its superior bargaining position by demanding money from suppliers that it was not lawfully entitled to, and was, in all the circumstances, unconscionable.

“The ACCC has commenced these proceedings because it considers the alleged conduct was contrary to the prevailing business and social values which underpin business standards that apply to dealings with suppliers.

“These proceedings will provide the Court with an opportunity to consider whether conduct of this nature, if proven, is unlawful in the context of large businesses dealing with their suppliers,” Sims said.

The Australian Food and Grocery Council’s (AFGC) chairman, Gary Dawson, said it’s time claims like these were officially tested in court.

"Over recent years, there have been widespread reports of these sorts of practices being deployed by the major supermarkets to boost their bottom line at the expense of their suppliers," Dawson told the ABC.

"So it's very important these practices be tested in court, these allegations be tested thoroughly because it's in everyone's interests, including consumers, that there be a fair and competitive market.”

Coles is rejecting the claims, arguing that the communications with the suppliers referred to in the ACCC’s Statement of Claim were part of ongoing commercial negotiations involving a much broader, longer-term trading relationship with each of the five suppliers mentioned.

“These are normal topics for business discussions between grocery suppliers and retailers in Australia and around the world. Furthermore, commercial negotiations can be robust, regardless of the industry or sector,” the supermarket said in a statement.

The matter is listed for a directions hearing in Melbourne on 24 October, 2014.



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