Coles refunds over $12 million to suppliers, signs Grocery Code of Conduct

The Australian Food and Grocery Council (AFGC) has welcomed the statement by independent arbiter Jeff Kennett, who instructed Coles to refund over $12 million to about 100 suppliers, while Coles advised competition regulator the Australian Competition and Consumer Commission (ACCC) that it intends to become a signatory to the Food and Grocery Code from 1 July, 2015.

The move comes on top of the $10 million in fines the Federal Court ordered Coles to pay in December 2014 for unconscionable behaviour towards certain suppliers.

CEO of the AFGC, Gary Dawson, said that the arbitration process conducted by Mr Kennett, along with the decision by Coles to sign up to the Food and Grocery Code of Conduct, demonstrated improvements in the way in which Coles is engaging with its suppliers.

“It is also important to note that while the 200 businesses named in the ACCC action have been the focus of the Kennett review, the arbitration process is open to any of the thousands of suppliers dealing with Coles,” Mr Dawson said.

“Signing onto the Code marks Coles, Woolworths and Aldi’s commitment to fair dealing and to improving the operation of one of the most dynamic and competitive sectors of the economy. It is important now that Metcash and other supermarket retailers also sign up to extend the coverage of the Code.”

The ACCC welcomed the statement from independent arbiter, Mr Kennett, who instructed Coles to refund over $12 million to suppliers and also allowed suppliers to exit the ARC program without penalty or have ARC rebates reviewed.

“Mr Kennett has now finalised his deliberations and has instructed Coles to refund over $12 million to a number of ‘Tier 3’ suppliers and a further $324,000 to suppliers listed in the claims proceedings,” ACCC chairman Rod Sims said.

The ACCC, which will enforce the Grocery Code, said that the introduction of an effective and equitable dispute resolution process for disputes arising between retailers or wholesalers and suppliers is a key feature of the Code.


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