Coles crosses a line by 'overcharging' suppliers

By AdNews | 16 December 2014

Coles said it “crossed the line” in its dealings with suppliers, after it was taken to task by Australian Competition and Consumer Commission (ACCC) for contravening Australian consumer law.

The ACCC and Coles will now head to the High Court to figure out what action will be taken against Coles after the retailer admitted to unconscionable conduct against suppliers in late 2010 and 2011.

The two main claims relate to a supply chain program and late delivery claims.

The supply chain program complaint was lodged by several suppliers who said they were being overcharged by Coles for access to the Coles supplier portal.

This portal allows access to collaborative planning and greater data sharing capability and while Coles said it was right to charge for access, that it not transparent in its dealings and used its scale power unfairly.

Meanwhile the second claim related to communication and negotiations over the same period with a number of suppliers about the failure to deliver products, and wastage.

While the exact details are not known at this stage, Coles admitted that it was not dealing with suppliers in an open and transparent manner during the negotiations.

Coles has issued a mea cupla over the incidents.

“I believe that in these dealings with suppliers, Coles crossed the line and regrettably treated these suppliers in a manner inconsistent with acceptable business practice,” Coles' managing director, John Durkan, said.

The matters will now be directed to the High Court.

For more stories:

Taste doubles down on Coles partnership

Curtis Stone head Coles campaign

Coles pinged by ASB for misleading claims

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