Supermarket stoush could widen

New Zealand-owned supermarket operator Foodstuffs may be drawn into the stoush over claims suppliers are being bullied by Australian-owned Countdown supermarkets.

Competition watchdog the Commerce Commission last month launched an investigation into Labour MP Shane Jones' allegations that Countdown was blackmailing suppliers into making retrospective payments under the threat of having their products removed from shelves.

Yesterday the commission appeared before MPs on Parliament's commerce committee where chief executive Brent Alderton was grilled by Labour's Clayton Cosgrove.

Mr Alderton confirmed the commission had received a number of complaints, but would not confirm they included allegations of bullying and intimidation by Countdown or its Australian-owned parent Progressive Enterprises.

However, Mr Alderton also indicated that not all complaints received so far were about Countdown but that company's practices remained the focus of the inquiry at this point.

The local supermarket industry is dominated by a duopoly comprised of Countdown and its Australian-owned parent Progressive Enterprises, and NZ-owned co-operative Foodstuffs whose members own New World and Pak'nSave stores.

Food and Grocery Council chief executive Katherine Rich later told the Herald she didn't know what had been shared with the commission about operators other than Countdown.

"But certainly some of our members have raised the issue that at the moment the focus is solely on one part of the sector when in fact some of the discussions are relevant to the other half. What the Commerce Commission investigation has done is raised a wider discussion about supermarket behaviour and business culture," Ms Rich said.

"I don't know enough about the commission's process about whether they can widen it out or not. It would be up to the commission depending on information provided to it."

Meanwhile, Mr Cosgrove also asked Mr Alderton whether he could confirm that "a complaint of a $2 million retrospective payment was made to the commission" and that "once it reached your desk, that complaint effectively vanished because Progressive went to the supplier and basically said it was a big mistake, that they didn't want $2 million?"

Mr Alderton said it would be inappropriate to comment given the commission's ongoing investigation.

Mr Cosgrove would not repeat the claims his questions were based on outside of the committee room, where he had the protection of parliamentary privilege.

Asked about the claims raised by Mr Cosgrove, Progressive Enterprises managing director Dave Chambers said: "We continue to reject the allegations made about our business. It's disappointing that a month down the track we're still no clearer on what the alleged misconduct is; we haven't seen anything to support the claims made under parliamentary privilege and we don't have any further detail on what the Commerce Commission is investigating."

- Adam Bennett of the New Zealand Herald

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