Coles Refunds Suppliers and Signs Up to Code of Conduct

The Australian Food and Grocery Council (AFGC) welcomes today’s statement from the Hon Mr Jeff Kennett AC, instructing Coles to refund over $12 million to suppliers and to allow suppliers to exit the Active Retail Collaboration (ARC) program without penalty or have their ARC contribution rebates reviewed.

The arbitration and refunds arose out of the resolution of two proceedings commenced by the Australian Competition and Consumer Commission (ACCC) against Coles in 2014. In December, the Federal Court made declarations in both proceedings by consent that Coles had engaged in unconscionable conduct in its dealings with certain suppliers.

AFGC CEO Mr Gary Dawson, said that the arbitration process conducted by Mr Kennett, along with a recent decision by Coles to sign up to the Food and Grocery Code of Conduct, demonstrated improvements in the way in which Coles is engaging with its suppliers.

“These are important and positive changes being made by Coles. We have certainly encouraged suppliers who feel they have been poorly treated by Coles to take the opportunity of raising their concerns with Mr Kennett. While not everyone who has been through the Kennett review is happy with the outcome, most have acknowledged it is a genuine process aimed at resolving disputes and awarding compensation,” said Mr Dawson.

“It is also important to note that while the 200 businesses named in the ACCC action have been the focus of the Kennett review, the arbitration process is open to any of the thousands of suppliers dealing with Coles.”

“The AFGC also congratulates Coles for formally committing to sign up and abide by the Food and Grocery Code of Conduct. This is an industry-led solution to problems impacting on suppliers and consumers, and Coles and Woolworths were instrumental in the development of the Code with the AFGC.”

“Signing onto the Code marks Coles, Woolworths and Aldi’s commitment to fair dealing and to improving the operation of one of the most dynamic and competitive sectors of the economy – the fast moving consumer goods sector. It is important now that Metcash and other supermarket retailers also sign up to extend the coverage of the Code.

“The Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers and will provide greater certainty and clarity about dealings in the industry without adding unnecessary complexity or cost.”

“The ACCC will have ongoing oversight of the Code’s operation, including a capacity to audit retailers for Code compliance, and to resolve disputes. The high level of interest by the ACCC in the sector has been important for the development of a meaningful Code and we acknowledge their ongoing interest,” said Mr Dawson.



AFGC Media Contact: James Mathews 0407 416 002