Both our major supermarket chains have been investigated for unconscionable conduct with suppliers including raising invoices without agreement.
Coles has been fined $11.25m for conduct including demanding payments that it was not entitled to to fill its own profit gaps and then threatening commercial consequences if the payments were not made.
We understand that the practice is not just confined to Coles & Woolworths but exists in other areas of retailing. Essentially, large retailers make a charge on their suppliers after goods have been contracted and delivered. They make the claim because they didn’t achieve the sales price and profit margin they had hoped to achieve. Sometimes this occurs many months after the original deal is done. Coles called it “funding profit gaps”. Coles has publicly apologised for its actions.