Coca Cola Amatil managing director Terry Davis has fired back a salvo at Coles boss Ian McLeod in an ongoing war of words between the two companies.
On Sunday's debut episode of Financial Review Sunday show, McLeod suggested Coca Cola Amatil had engaged in 'supplier tactics' because of the mark-up for wholesale goods in Australia versus other places.
Davis has hit back. He said the reason Coca Cola Amatil, the bottling partner for Coca-Cola South Pacific, charged more in Australia was because of higher labour costs. As reported by The Sydney Morning Herald, Davis said at a shareholders' meeting: “Yes I can bring in cans from Indonesia cheaper than I could produce them in Australia. That is absolutely right, but I am not going to do that because I am fervently a believer that we have to have a manufacturing industry in this country, because if we don't we do it at our peril.
He said you can't pay workers $1.50 an hour in Australia in addition to higher overhead costs such as rent. He added Coles would be facing the same challenges.
McLeod had said on the show he believed it was his duty to consumers to investigate supplier prices. “[Suppliers will] argue about different markets operating in different ways but when you look a bit further we believe the profitability for those suppliers is higher in Australia than in other markets,” he said.
Both Coles and Woolworths are currently being investigated by the Australian Competition and Consumer Commission for alleged aggressive and bullying behaviour towards suppliers.
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