Commerce Commission assesses Countdown allegations after Jones lays complaint
"On top of the discounts demanded (not offered, demanded), by the supermarkets, an 'advertising' budget is billed to the supplier - who has no discretion as to how that budget will be spent"Featured comment
UPDATED: The Commerce Commission confirms it has received a written complaint outlining concerns of alleged anti-competitive behaviour by Countdown its suppliers.
Earlier today, a spokesman for the regulator told NBR that Labour MP Shane Jones had called Commerce Commission chairman Mark Berry, and followed up with a formal letter.
The Commission will now take steps to ascertain the basis of the allegations and whether the behaviour is a breach, Dr Mark Berry says.
“The Commission takes all complaints regarding anti-competitive behaviour very seriously. We encourage anyone who has information relevant to the allegations to contact us,” said Dr Berry.
Suppliers and anyone else with relevant information are encouraged to contact the Commission on 0800 943 600.
Countdown rejects Shane Jones' extortion claim - but Labour MP gets tacit backing from Rich
Countdown says it categorically rejects Shane Jones' claim it "extorts" NZ suppliers. But the Labour front-bencher has received indirect backing from Food and Grocery Council CEO Katherine Rich.
Speaking under Parliamentary privilege Wednesday afternoon, the senior Labour MP said the Australian-owned supermarket chain had demanded cash payments from Kiwi suppliers for "past losses", and told them that if they did not make the payments, they faced permanent exclusion from the shelves. The suppliers would be blacklisted if they told anyone about the demands, he said.
Mr Jones said, "In this speech I'm fulfilling my duties as a Parliamentarian to alert us to a level of extortion that is going unchallenged in our food and grocery sector ... [Suppliers] are being told by the Australian-owned supermarket 'our profit margins did not meet the shareholders' expectations last year. We want more profit out of you'. They are demanding of Kiwi businesses payments, backdated cheques, and recompense, sir, for the losses the supermarkets assert they suffered last year." It was a "shakedown", the Labour MP said.
Mr Jones also made a series of posts to Twitter repeating the same accusations, but later deleted them. He has refused to repeat his claims, or make further comment, outside of Parliament.
In a statement, Dave Chambers, managing director of Countdown's parent company, Progressive Enterprises, said. "We categorically reject the allegations made by Shane Jones MP under Parliamentary Privilege in the House today ... We will fully cooperate with any enquiries from the Commerce Commission."
Jones lays complaint with regulator
Commerce Commission spokesman David Irving tells NBR, "I can confirm that Mr Jones telephoned yesterday and advised Commission chair Dr Mark Berry that he would be forwarding a letter on this issue to the Commission."
Mr Jones' letter outlining his formal complaiint arrived this moring. "It will be processed in the normal way, Mr Irving says. The regulator will now have to access the Labour MP's complaint, and determine if an investigation is warranted.
Mr Jones apparently did not take his concerns to Countdown before making his allegations in the House. A spokeswoman told NBR the company was caught by surprise by his comments in Parliament.
The Labour MP appeared to receive tacit backing for his claims trom the Food and Grocery Council's Ms Rich, who read a brief statement to media following Mr Jones' comments.
"We're aware of a number of incidents where our member companies have been asked for retrospective payments. We have raised our general concerns about this practice with the supermarket chain involved," Ms Rich said.
"This is a serious issue that is new to the New Zealand grocery sector and we view it as an unwelcome development.
"We have asked members to report further occurrences."
NBR has asked Countdown for a response to Ms Rich's comments. A Progressive spokeswoman said the company would make further comment tomorrow.
Progressive is a division of Woolworths, which is facing controversy over a campaign to restrict non-local goods, including NZ made goods, from its Australian supermarkets. Some have called on New Zealand shoppers to respond by boycotting Progressive's Countdown chain.
RAW DATA: Statement by Dave Chambers, Managing Director, Progressive Enterprises
We categorically reject the allegations made by Shane Jones MP under Parliamentary Privilege in the House today.
We’re very proud to have a long history of supporting New Zealand suppliers and we have strong relationships with more than 1200 local and multinational companies here.
As a passionate Kiwi, I am also proud of the 18,000 New Zealanders who work hard to serve our customers every day, and of the investment our business continues to make in the economy.
If any MP or supplier has questions or concerns about our business they are welcome to contact us directly to discuss them.
We will fully cooperate with any enquiries from the Commerce Commission