Retail giant Woolworths has set up an independently monitored and confidential hotline for suppliers to flag concerns about the company’s behaviour, prompting calls for rival Coles to follow suit and for a supermarket ombudsman to be established.
Woolworths says the “Speak up” hotline is the first of its kind from an Australian retailer and will hear complaints about issues such breaches of law, conflicts of interest, and bullying and harassment.
Woolworths CEO Grant O’Brien says the company has “developed strong long?term relationships with our trade partners.”
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“We will not tolerate workplace misconduct under any circumstances and we need our trade partners to work with us to stamp out any and every instance,” O’Brien says.
But industry association the Australian Food and Grocery Council says the hotline is only a “good start” and an acknowledgment that “there are serious problems facing food and grocery manufacturers and suppliers in dealing with major supermarkets.”
AFGC say the hotline – to be administered by Deloitte – doesn’t go far enough. It is lobbying for a supermarket fair trading code to be enforced by an independent supermarket ombudsman.
It adds that many suppliers are not comfortable bringing their concerns to the company for fear it might hurt their trading relationship.
Minister for Manufacturing Kim Carr said he often received complaints from manufacturers about how contract negotiations are conducted and contract terms are applied.
“Our supermarkets are increasingly using their home brands, they are increasingly eroding brand loyalty and they are forcing suppliers to operate on wafer-thin margins,” Carr told Parliament.
Minister for Industry and Innovation Greg Combet this week said it was the competition regulator’s duty to ensure the supermarket duo did not dominate Australian retail.
The Australian Competition and Consumer Commission said it welcomed “any initiatives by the major supermarkets that improve arrangements and relationships with their suppliers.”
Coles was contacted for comment this morning but did not reply by deadline. It told The Australian that it has an internal dispute resolution process.
The two supermarkets have about 80% market share across Australia.
Woolworths this morning reported a 5% increase in half-year sales to $29.725 billion, and tipped “trading will continue to be subdued over the remainder of the year as a result of the prevailing external conditions.”
Total group sales were up 3.7% to $26.29 billion, with supermarket sales up 5.6% to $25.249 billion.