Australia: Woolworths pressured suppliers for $60m to shore up accounts, says ACCC

Australia’s competition regulator on Thursday said it has launched court proceedings against Woolworths Ltd, saying a request for funds from suppliers by the country’s biggest supermarket chain amounted to “unconscionable conduct”.

The Australian Competition and Consumer Commission said Woolworths sought about $43.84 million in “payments” from suppliers to help narrow a shortfall in earnings, under a scheme the supermarket called Mind the Gap.

The agency said the scheme was approved by senior management, involved 821 suppliers, and was in contravention of consumer law. It said it was seeking an injunction requiring Woolworths refund suppliers and pay related costs. Woolworths denied any wrongdoing.

“Not agreeing to a payment would be seen as not supporting Woolworths,” the ACCC said in a statement.

The ACCC’s latest move is part of a broader probe into major chains’ treatment of supermarket suppliers. In October, Woolworths, Aldi Inc and Wesfarmers Ltd’s Coles signed up to a code of conduct for the food industry, implemented after the ACCC began its probe in 2013.

Full content: The Guardian

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