Horticulture body AUSVEG is urgently calling on the ACCC to investigate the behaviour of Woolworths, who are allegedly seeking enormous contributions from Australia’s horticulturalists to pay for their Jamie Oliver campaign.
According to AUSVEG, Woolworths are demanding hundreds of thousands of dollars from individual growers around Australia to fund their new campaign.
The payment is in the form of a new 40c per crate charge on top of the 2.5 – 5 per cent fee growers are already required to pay Woolworths for them to market and promote their produce.
Growers around the country are being given no undertaking from Woolworths on what return they will see from the additional funds they are being asked to provide to fund the promotion.
AUSVEG today held a press conference with Independent South Australian Senator Nick Xenophon, a long-time supporter of the Australian vegetable and potato industries, to expose Woolworths’ behaviour.
“AUSVEG is alarmed at the way that Woolworths is squeezing its suppliers for more cash and are outraged at the way that the company is behaving,” said AUSVEG Acting CEO, William Churchill.
According to AUSVEG, growers around the country are frightened that if they do not comply with these requests to fund the campaign their business with the country’s biggest supermarket will be blacklisted and they will start to receive fewer orders for produce, or be struck out altogether.
“It’s astounding for a company that posted a $1.32 billion net profit in February and employs 190,000 staff to be going back to already squeezed farmers and asking them to cough up more money to pay for promotions,” Churchill said.
“Australia’s farmers cannot afford to fund Woolworths’ marketing campaigns and expectations that growers should contribute more are totally unreasonable. The ACCC must immediately investigate” said Mr Churchill.
A statement from Woolworths said "It’s disappointing that Senator Xenophon and Ausveg didn’t contact us."
"We could have explained that the contribution was entirely voluntary, how around half our suppliers chose to work with us on the campaign which benefits the whole fruit and vegetable industry and how participating growers are paying less than 2 per cent of the cost of a case of produce."
The news comes a month after the ACCC took Coles to Federal Court claiming the supermarket giant broke Consumer Law in conduct in relation to its Active Retail Collaboration (ACR) program.
The ACR program was developed by Coles in 2011 to improve earnings by obtaining better trading terms from its suppliers. It’s alleged one of the ways Coles sought to improve earnings was through the introduction of ongoing rebates to be paid by its suppliers in connection with the Coles ARC program, based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain.
The ACCC alleges that in relation to 200 of its smaller suppliers, Coles required agreement by the supplier to the rebate within a matter of days. If these suppliers declined to agree to pay the rebate, Coles personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.