Coles defends unconscionable conduct claims

Coles has rejected the ACCC’s claims of unconscionable conduct towards some of its suppliers. The company says the five suppliers in question still continue to be “valued suppliers to Coles”.

Coles says that it has 4000+ suppliers and millions of individual contracts with suppliers each year, but the allegations only relate to dealings with five suppliers three years ago.

According to the company, the allegations relate to a day in the lead-up to Christmas 2011, when Coles met with suppliers to discuss ‘profit gaps’, poor sales performance of certain products and the failure of some suppliers to deliver agreed quantities of stock at agreed times.

“High levels of waste or the poor performance of products can contribute to higher prices for customers, which is why these issues are actively managed by Coles,” the company said in a statement.

“Product waste can arise from various means including faulty packaging of product by suppliers, suppliers delivering products too close to their use-by date or mishandling by suppliers or Coles.

“In other words, responsibility for waste may lie with the supplier, the retailer or it may be shared. Again, payments for waste are a common business practice in retail in Australia and around the world.”

Coles says it trains its staff to treat suppliers in an “open and fair manner” and that it has worked to improve the way it works with suppliers. The company has reportedly initiated a Supplier Charter that gives suppliers access to an independent and confidential resolution process. Jeff Kennett, the former premier of Victoria, has been appointed as its independent arbitrator.

“Coles is convinced retailers and suppliers will both benefit from quicker, low-cost dispute resolution,” the statement said.