Both our major supermarket chains have been investigated for
unconscionable conduct with suppliers including raising invoices without
agreement.
Coles has been fined $11.25m for conduct including demanding
payments that it was not entitled to to fill its own profit gaps and then
threatening commercial consequences if the payments were not made.
We understand that the practice is not just confined to
Coles & Woolworths but exists in other areas of retailing. Essentially,
large retailers make a charge on their suppliers after goods have been
contracted and delivered. They make the claim because they didn’t achieve the
sales price and profit margin they had hoped to achieve. Sometimes this occurs
many months after the original deal is done. Coles called it “funding profit
gaps”. Coles has publicly apologised for its actions.