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Australian Court to Determine if Supermarket Company Mistreated Suppliers Over Pricing

Australian supermarket Coles is facing legal action over the way it reportedly treated suppliers in attempting to force down prices.

The Australian Competition and Consumer Commission (ACCC) has started proceedings in the Federal Court against Coles Supermarkets over its Active Retail Collaboration (ARC) programme.

The ACCC alleges Coles “engaged in unconscionable conduct” in relation to the ARC programme, which sought ongoing rebates from suppliers, in contravention of the Australian Consumer Law.

According to the ACCC, Coles’ target was to obtain AUS$16m (US$14.9m) from smaller suppliers in the form of rebates “based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain”.

The ACCC alleged that in relation to 200 smaller suppliers Coles required agreement to the rebate within a matter of days. “If these suppliers declined to agree to pay the rebate, Coles personnel were allegedly instructed to escalate the matter to more senior staff and to threaten commercial consequences if the supplier did not agree,” said the ACCC.

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