The Australian Competition and Consumer’s Commission (ACCC) is taking Coles to court – again. This time the consumer watchdog is alleging the supermarket giant used its superior market power to leverage suppliers to make up its own ‘profit gap’.

A profit gap is the difference between the profit Coles anticipated and the amount it actually achieved.

The ACCC are alleging Coles had no right to demand the suppliers make up this shortfall. “We’re alleging the conduct involved unfairly shifting profits from the suppliers to Coles,” said ACCC Chairman Rod Sims.

The ACCC is alleging Coles attempted to claw-back monies claimed by suppliers for ‘waste’ on goods after Coles had accepted them. Coles is also charged with passing on ‘markdowns’ on goods in the store to suppliers.

Coles is also charged with imposing unauthorised penalties on suppliers for short or late deliveries. Something they are not allowed to do within the terms of trade.

Coles’ profit gaps, say the ACCC, “could have been caused by Coles’ own actions and by other matters ‘largely or entirely outside the control of suppliers.”

Image: www.couriermail.com.au

Image: www.couriermail.com.au

Coles has rejected the allegations, “The ACCC’s allegations concern a limited number of dealing with five Coles suppliers here years ago.

“For context,” the Coles’ statement continued, “Coles has over 4,000 suppliers, and is in contact with many of them on a daily basis. It has millions of individual contacts with suppliers every year. All five suppliers continue today to be valued suppliers to Coles.”

The supermarket giant said the allegations were the result of a communication breakdown and the failure to deliver, waste, damage, and profitability of products

“The individual communications with, and regarding, 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 supplier.”

The two parties will appear in a Melbourne court on Friday 24 October at 10 am.

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