Melissa Parke (Fremantle, Australian Labor Party, Shadow Assistant Minister for Health) Share this | Link to this | Hansard source

The Australian Competition and Consumer Commission has launched proceedings in the Federal Court alleging unconscionable conduct by the Coles supermarket chain in some extraordinary arrangements asserted against its suppliers. If the ACCC is right, it appears that Coles sought to make suppliers responsible for the supermarket achieving its own profit projections. Indeed, where those projections were not met, Coles would email suppliers with a demand that the profit gap be made good. Within Coles, this phenomenon was termed 'perfect profit' and the day on which Coles executives made demands on suppliers, with deadlines ranging from a few days to three hours, was referred to as 'perfect profit day'.

In one email lodged with the ACCC, a Coles manager wrote to staff saying: 'Our profit budget is a given … Ring suppliers today if you are short on profit.' In addition, there is evidence that, in cases where Coles had decided to discontinue the sale of certain products and proceeded to discount them sharply for the sake of clearing the stock, Coles then turned to the supplier to make good the gap in expected profit that Coles had inflicted on itself. Here is the market at work in Australia's version of modern consumer capitalism: a dominant corporate giant decides not only the price it will pay to wholesalers and suppliers, but also what profit it will make. It then places unconscionable pressure on the supplier to fund this projected profit.

I am glad that the ACCC is taking action against this alleged misuse of market power which, if established, is frankly disgusting. It is a perfect example of the shortcomings of the market and the need for strong and properly resourced regulation and regulatory oversight.