Supermarket chain 'blackmails' suppliers: MP

Shane Jones
Shane Jones
New Zealand suppliers are being blackmailed into making payments to Australian-owned supermarket chain Countdown to ensure their products continue to be stocked, Labour MP Shane Jones claims.

Under protection of parliamentary privilege in the House this afternoon, Mr Jones detailed what he called the "Countdown shakedown" and slammed it as an example of the ruthless "dingo culture" of Australian corporations.

Mr Jones said he had been informed by New Zealand suppliers that they had been called to meetings with the supermarket chain's managers.

During those meetings they were told the supermarkets' profit margins hadn't met "shareholder expectations" and more was wanted from the suppliers.

"The Aussie managers are saying to our Kiwi employers, our Kiwi firms 'we're not here to talk nursery rhymes'.

"They are demanding from Kiwi businesses backdated cheques and recompense for the losses the supermarkets assert they suffered last year.

"And if they don't pay these cheques, they are being told no shelf space into the future.

"In any other sort of country that's blackmail, that's extortion," Mr Jones said in Parliament.

Mr Jones said the suppliers who brought the issue to his attention had sworn him not to reveal their identity. However they employed thousands of New Zealanders up and down the country and with their own profit margins slim, those jobs would be placed at risk if they were forced to make those payments.

He said he would this afternoon send a letter to the Commerce Commission asking them to look into the matter.

The move was symptomatic of "a corporate culture that could only be described as something Tony Soprano would be very proud of, something of racketeering and something of extortion imported from Australia that corrupts commercial practice in New Zealand".

Mr Jones refused to comment further after he left the House.

A spokeswoman for Countdown said the company was "stunned" by Mr Jones' claims.

"We absolutely and categorically reject the allegations".

Countdown is owned by Progressive Enterprise which is in turn owned by Australian company Woolworths Ltd.

Mr Jones' claims come almost a year to the day since Australian competition watchdog the Australian Competition and Consumer Commission (ACCC) confirmed it was investigating similar complaints across the Tasman.

Noting it was difficult to get suppliers to come forward and speak about such practices, ACCC chairman Rod Sims said the watchdog was investigating claims that suppliers were being forced to make extra payments or risk having their products removed from the supermarket shelves.

Some suppliers also said their products were being discriminated against in favour of the supermarkets' own home brand products, which are now estimated to make up around a quarter of total supermarket sales.

Countdown is already facing criticism and a fledgling consumer boycott in New Zealand over its parent company's policy to favour local suppliers over New Zealand suppliers in its Australian supermarkets.

A Facebook page set up to highlight the boycott had 1317 likes by this afternoon.

Progressive Enterprises managing director Dave Chambers said that if any MP or supplier had questions or concerns about his company's business "they are welcome to contact us directly to discuss them".

Mr Chambers said Progressive Enterprises would "fully co-operate with any enquiries from the Commerce Commission"

In a statement this afternoon, Food and Grocery Council chief executive Katherine Rich said her organisation was 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."

By Adam Bennett of the New Zealand Herald  

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