Coles offers $50 million in “conscience and guilt money” with its new SME innovation fund
Friday, April 24, 2015/
Coles will attempt to “nurture” farmers and SMEs with a $50 million innovation fund that will see grocery producers and manufacturers given access to grants and interest-free loans.
The supermarket giant has allocated the funding over five years for the grants, with the aim of encouraging small businesses to find more productive and innovative ways of doing business.
The Coles Nurture Fund is open to companies with less than $25 million in annual revenue and with fewer than 50 full-time employees. The grants will be awarded by a judging panel that will include three Coles directors and Coles ambassador and chef Curtis Stone.
“The Coles Nurture Fund is one way we can offer support and encouragement to small Australian businesses looking for assistance to take the next step in creating more productive and innovative ways of working,” Coles managing director John Durkan said in a statement.
“Through investing in productivity driving activities we can not only provide better value to customers but also help set up small businesses to develop the products and platforms to expand their operations and, in some cases, export into global markets.”
The initiative comes after Coles agreed to pay a penalty of $10 million and admitted it had “crossed the line” by pressuring small suppliers into paying ongoing rebates as part of its Active Retail Collaboration program in December 2014, following legal action by the Australian Competition and Consumer Commission.
Australia’s peak body for vegetable growers, AUSVEG, has welcomed the $50 million fund, saying it is good news for food and grocery producers around the country.
AUSVEG deputy chief executive Andrew White said in a statement the fund will help farmers across Australia continue to innovate “in a climate of rising on-farm costs”.
“This fund will enable growers to be more entrepreneurial and invest in exciting new business opportunities, rather than being forced to direct all of their funds into their day-to-day operations,” White said.
“That Coles is investing such a large amount of money into Australian industry is a timely acknowledgement of the hard work and dedication that our growers employ in producing the safe and high-quality produce that Australian consumers enjoy every day.”
However, Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany the fund appears to be a PR stunt.
“Conscience and guilt money, that’s what it is,” he says.
“Are they going to go back to the businesses that have closed and compensate them and those people whose health has been affected by their behaviour? If they do, I’ll work on the checkout at Coles for a year for nothing.”
Strong says while manufacturers and farmers receiving a much-needed leg up is a good thing, he remains very sceptical and does not think the fund will change people’s attitudes in the small business community.
“They’re going to take a long time before they change people’s views about their behaviour and motivations,” he says.
“$50 million is not petty cash – but that’s what they should have been fined by the ACCC.”
*The article was updated on April 27 to include a statement from Coles.