Coles Ordered To Refund Millions of Dollars to Suppliers
Tuesday 12 May 2015 @ 9.46 a.m. | Legal Research | Trade & Commerce
The Coles supermarket chain has refunded millions of dollars to suppliers as part of a dispute resolution process.
In an article previously reported by TimeBase, Coles has appointed former Victorian premier Jeff Kennett as an independent arbiter after the Australian Competition and Consumer Commission (ACCC) took the company to court over claims of unconscionable conduct towards its suppliers.
Mr Kennett recommended the supermarket suppliers, including farmers and food processors, be awarded financial settlements as part of that process.
Background
In December 2014, the Federal Court found Coles had demanded payments from suppliers to which it was not entitled by threatening harm to suppliers, and withheld money from suppliers it had no right to withhold.
The court ordered Coles to establish a formal process to provide for redress for over 200 affected suppliers.
Response from Coles
In response, the supermarket appointed Mr Kennett to deal with suppliers seeking compensation and undertook a binding agreement to act on his recommendations.
Since then, Mr Kennett has visited up to 150 suppliers across the country hearing evidence and determining whether they were entitled to a refund from the supermarket.
Mr Kennett said:
"I have awarded, based on submissions made to me, evidence placed before me, a substantial amount of refunds to those I thought were entitled to them."
While he would not be drawn on the exact figure, he said it came close to the $10 million Coles was ordered to pay following the ACCC Federal Court action:
"They've paid a fine of $10 million and certainly the refunds that I have ordered are approaching that figure again … It's been a substantially expensive exercise for them, but I believe a great deal of good will come out of it for the suppliers and for Coles."
Criticism of the Company
Mr Kennett had previously been critical of Coles, particularly for selling "fresh" bread that had been pre-baked in Ireland.
He expects to conclude his role by the end of June 2015 and said he was now confident that Coles had improved its dealings with suppliers.
Mr Kennett commented:
"When I talk to suppliers now, many of them are saying there has been a noticeable change in the relationship between they and Coles...In many cases it was always good, in some cases it was less than good. They are now saying that the relationship is a lot better than it was as little as five months ago...Coles has already made some changes, but this is a work in progress and they are undertaking a much bigger review...It takes a lot of time to turn a big ship around, but I'm hopeful by the end of this year, Coles will have in place a much better practice.”
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.
Sources:
Coles refunds millions of dollars to suppliers over ACCC case on recommendation from former premier Jeff Kennett – Article from abc.net.au
