Finance Finance News Coles pays for conduct

Coles pays for conduct

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The Coles supermarket chain has refunded suppliers millions of dollars after it appointed former Victorian premier Jeff Kennett as an independent arbiter.

Mr Kennett recommended supermarket suppliers, including farmers and food processors, be awarded financial settlements as part of a dispute resolution process.

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Coles had asked him to act as an independent arbiter between it and suppliers after the Australian Competition and Consumer Commission (ACCC) took Coles to court over claims of unconscionable conduct toward its suppliers.

In December last year, 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.

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.

Jeff Kennett has been working with aggrieved suppliers. Photo: AAP

“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,” Mr Kennett said.

While he wouldn’t 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,” Mr Kennett said.

“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.”

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 and said he was now confident that Coles had improved its dealings with suppliers.

“When I talk to suppliers now, many of them are saying there has been a noticeable change in the relationship between they and Coles,” Mr Kennett said.

“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.

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