Supermarket 'shakedown' claimed

Shane Jones
Shane Jones
Already facing a consumer backlash over its parent's ban on New Zealand products, Australian-owned supermarket giant Countdown was yesterday accused of blackmailing New Zealand suppliers into paying to keep their products on its shelves.

Labour's economic development spokesman Shane Jones made his claim of a ''Countdown shakedown'' under parliamentary privilege but appears to have the backing of Food and Grocery Council chief executive and former National MP Katherine Rich.

The claims are ''categorically'' denied by Countdown owner Progressive Enterprises.

Mr Jones told Parliament he had been told by a number of New Zealand suppliers they had been called to meetings with the supermarket chain's managers.

During those meetings, they were told the supermarkets' profit margins had not met ''shareholder expectations'' and more was wanted from them.

''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 payments, 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.

Katherine Rich
Katherine Rich
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 intended making a formal complaint to the Commerce Commission asking it 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''. ''I'll go to Pak'n Save because the Aussies should pack up and go home.''

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

Mrs Rich confirmed 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,'' she 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.''

Countdown is a subsidiary of the Australian-owned Progressive Enterprises, whose managing director, Dave Chambers, ''categorically'' denied Mr Jones' claims and 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 inquiries from the Commerce Commission''.

Progressive Enterprises' parent Woolworths - which is chaired by New Zealand businessman Ralph Waters - along with main Australian rival Coles are already under investigation by the Australian Competition and Consumer Commission over similar claims.

A Commerce Commission spokesman confirmed Mr Jones had been in contact yesterday but had yet to make a formal complaint. The spokesman was unaware the commission was dealing with any complaints alleging similar behaviour at this point.

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

A Facebook page set up to highlight the boycott had more than 1700 likes by late yesterday with about 400 of those coming after Mr Jones' claims in Parliament.

 

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