Wesfarmers subsidiary Coles has agreed to pay A$10m (US$8.21m) in fines and refund suppliers after the Australian Competition and Consumer Commission (ACCC) launched two court cases against the Australian supermarket giant.
The ACCC launched action against Coles on 5 May following allegations Coles had “engaged in unconscionable conduct by the way it sought rebates from suppliers under its ‘Active Retail Collaboration’ programme,” according to the ACCC.
The second proceedings commenced on 16 October in relation to claims Coles had sought payments from suppliers for profit gaps, waste, markdowns, and late deliveries. The allegations related to dealings with suppliers in late 2010 and 2011.
“Coles unconditionally apologises and accepts full responsibility for its actions in these supplier dealings,” John Durkan, Coles managing director, said in a company statement released Monday. “I believe that in these dealings with suppliers, Coles crossed the line and regrettably treated these suppliers in a manner inconsistent with acceptable business practice.”
Durkan said that since 2011, Coles had taken steps to improve its treatment of suppliers.
The ACCC and Coles appeared before Federal Court judge Michelle Gordon on 15 December to seek consent orders for the settlement, with both parties potentially having to wait until the new year to see if the Court will accept the orders. Gordon said that Coles had been using smaller companies to increase its profits, and that the penalties may not be enough, reports the Guardian.