ACCC investigates Woolworths over commercial threat allegations to suppliers

Woolworths1The competition watchdog is investigating claims that Woolworths has threatened to withdraw products from shelves if suppliers don’t fork out millions of dollars to fund marketing and promotional campaigns.

The Australian Competition and Consumer Commission (ACCC) confirmed it has received complaints and is exploring the issue, just days after Coles agreed to settle a case with the ACCC over claims of “unconscionable conduct”.

Fairfax Media reported today that Woolworths is asking suppliers to contribute $50m under a program called “Project Close the Gap”, some of which will fund the supermarket’s marketing, including its Cheap Cheap campaign.

The ACCC invited suppliers to contact its officers with information.

ACCC chairman Rod Sims said: “We have received recent further complaints about supermarket supplier issues which we will consider. We will make no further comment at this stage.

“Should suppliers or others wish to provide information to the ACCC (including anonymously or requesting that information be treated confidentially), we would encourage them to contact us by calling our Infocentre and requesting to speak to a senior manager involved in supermarket supplier investigations.”

Claims that suppliers have been threatened with product removal will be rejected by Woolworths which will insist negotiations with suppliers over the funding of promotions is normal business practice. The supermarket is also expected to argue that suppliers who don’t take part in promotions will see sales fall and, as an inevitable consequence, get reduced shelf space.

“Woolworths is working very hard to deliver lower prices to our customers,” a spokesman said. “We are constantly working with suppliers to find opportunities to drive down prices. Our negotiations have seen grocery prices fall over the past five years. Grocery retailing in Australia is highly competitive. That’s why our partnerships with suppliers are so important.”

Woolworths came under fire earlier this year for asking vegetable growers to fund its Jamie’s Table collectable cards campaign.

Steve Jones


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.