Supermarket dealings reduced to ‘feral level’
MY FAVOURITE saying in Bryce Courtenay’s book The Potato Factory came from former London criminal Ikey Solomon who learnt it from a rabbi. When it came to negotiation, Ikey said: ‘‘Remember, always leave a little salt on the bread’’. He reckoned both parties needed to get enough from a negotiation to make it worthwhile, which is why he had always paid slightly above the going rate for stolen goods.
Countdown, owned by Australian supermarket chain Woolworths, could do well to follow Ikey’s example. It has faced a growing consumer backlash after Labour MP Shane Jones, using parliamentary privilege, accused Countdown management of demanding cash payments from Kiwi suppliers for losses it suffered during the year.
The threat was they would not get shelf space in the future if they did not pay, he claimed.
The suppliers are said to be too frightened of repercussions to speak out publicly themselves.
Countdown issued a statement categorically denying Jones’ allegations and saying it had strong relationships with more than 1200 local and multinational companies here. But the Food & Grocery Council, which represents food manufacturers and suppliers, said it was also aware of a ‘‘number of incidents’’ where members had been asked for retrospective payments and the Commerce Commission is now investigating.
The furore follows Woolworths facing a social media campaign calling for a boycott of its New Zealand supermarkets in retaliation for Kiwi products being stripped from shelves in theirs and Coles’ Australian supermarkets in preference to local products.
See Rod Oram’s column P24 for
The suppliers are said to be too frightened of repercussions.
more on trans-Tasman issues.
Only a couple of years ago Australian suppliers to Coles and Woolworths complained to the Australian Competition and Consumer Commission about ‘‘unconscionable conduct’’ by the supermarkets. There are no provisions under New Zealand law for the same thing, with previous supplier complaints here being considered under Commerce Act provisions relating to using market power anti-competitively.
The Australian food suppliers had been badly hit by the price wars between the two chains which led to slashed costs.
They thought it unfair the supermarkets had asked them to increase output to meet demand and after they made the capital commitment to do so, drastically cut their prices. Food & Grocery Council chief executive Katherine Rich then said negotiations between supermarkets and Kiwi suppliers were always robust but had not reached the ‘‘feral level’’ of Australia. Looks like that may have changed and it’s time for those across the Tasman Sea to remember the salt.