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
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
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