If brains were dynamite our Commerce Commission wouldn’t have enough to blow their nose

Our Commerce Commission recently received more than 90 complaints from suppliers being strong armed by Progressive/Countdown.

They had a cursory look and found…nothing.

Countdown, despite the more than 90 complaints claimed vindication.\Meanwhile in Australia, their ACCC has found a remarkably similar story…and slammed the supermarket chain they nailed with millions in fines.

Australian supermarket chain Coles will pay A$11.25 million in fines and costs and potentially far more refunding suppliers for illegally squeezing them for funds.

The food and liquor giant’s settlement with the Australian competition watchdog over charges of unconscionable conduct in its treatment of grocery suppliers was accepted by the Federal Court on Monday.

The nation’s second largest supermarket chain had deliberately and illegally misused its market power to squeeze small suppliers for money, judge Michelle Gordon told the court.

The verdict was welcomed by the Australian Food and Grocery Council, which also applauded Coles and Woolworths for working with it on a code of conduct.

However the industry body has warned members in writing about Woolworths also seeking to recoup money for “profit gaps”, although it has not facing any charges.

The payments to Coles filled what it called its “profit gaps” or targets, which in reality meant profit shifting and deducting money it was supposed to pay suppliers.

Because Coles represented a significant proportion of the small suppliers’ sales, it was able to successfully pressure them by threatening to stop buying their products, the court found.

Note Progressives owner Woolworths is also implicated for the same business practices.

Which is precisely the sorts of complaints that our Commerce Commission received here…and yet they found nothing, despite the fact it was the Aussies who came over here to stand over suppliers.

One industry insider who I spoke with on condition of anonymity had this to say:

I believe if we had better powers for the Commerce Commission in NZ, in line with the ACCC in Australia, the Progressive investigation outcome would have been different.

The current Commerce Commission is a toothless fairy which either needs to be strengthened in line with the ACCC, or disbanded and the savings can go toward reducing the deficit.

It is currently an absolute waste of time and money, which can be seen from their inability to do anything over the last number of years.

Government needs to wake up to this, as it is currently a total waste of time.

Strong words, uttered out of complete frustration.

I note that the Commerce Commission recently also found nothing to see with complaints about predatory and anti-competitive tactics from Fletchers and their wallboard subsidiary. Another travesty.

I find it strange that the Commerce Commission can not find any evidence yet the ACCC in Australia dealing with the same organisations can find plenty.

 

– NZ Herald

 


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  • grannymorris

    ComCom found lots of evidence, but sadly unconscionable exercise of market power is not illegal in NZ, unlike Aus.

    The law is not strong enough to deal with this behaviour.

  • caochladh

    The AUD$10,000,000 + costs is just the start. Now, they have to start paying back the millions that they blagged off the suppliers – Merry Christmas!

    • Aucky

      Coles won’t be paying the suppliers back or paying the fines. The consumer will be doing that.

      • peterwn

        What would help is if the firms Woolworths and Westfarmers (owner of Coles, Bunnings, etc) had to clearly itemise these amounts in their annual accounts and print on their dividend notices in big type what extra dividend shareholders would have got if the firms had played it straight.

      • caochladh

        I guess we can be thankful it wasn’t Woollies that were pinged because we would have ended up paying for it…..as usual.

  • Shoreboy57

    Nothing to see here. Move along (at least in NZ)

    • rantykiwi

      They aren’t the only Aussie owned companies indulging in the sort of bullying in the Australasian marketplace. Watch this space closely – there will be a lot of very worried execs about now.

  • Michael_l_c

    Follow the money. Who is mates with what politician? Who gets a directors job with what company, when they retire? Just wait and see an appointment announced in the next year or two then u have the answer.

  • T. Akston

    Here’s a different way of looking at this, and another reason why the Commerce Commission playing God is bad for us and our economy.

    The Cobra effect.

    So the Commerce Commission surveys the economy from on high, and get busy regulating markets and takeovers. Far from encouraging competition, this can have the effect of preserving the position and profits of incumbents.

    The Commerce Commission fiddles with markets for food and telecoms and energy and wall boards and …… aiming to prevent “super profits” and preserve competition. Meanwhile, from the side lines the potential new entrants observe that the reward to the risk of taking on the incumbents is, thanks to the ComCom, not quite high enough. so they stay on the sideline or move on.

    Ipso facto the market does not function, price signals for new entrants are absent, competition is reduced not increased, and consumers pay higher prices in the long run. The opposite effect to that originally intended.

  • peterwn

    Shakespeare Sonnet 137 line 1

  • sheppy

    Commerce commission, electoral commission – both useless wastes of money and both should be disbanded as they seem to acheive nothing

  • BR

    The government should stay out of this. There are obviously too many suppliers. Let the market sort it out. As for the commerce commission, who the hell voted for them?

    Bill.

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