The ACCC has alleged that in 2011, Coles developed a strategy to improve its earnings by obtaining better trading terms from its suppliers.
It is alleged that one of the ways Coles sought to improve its earnings was through the introduction of ongoing rebates to be paid by its suppliers in connection with the Coles ARC program, based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain.
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Cash for Coles: making suppliers pay
In August 2011 representatives of supermarket giant Coles approached energy drink maker Red Bull for a $200,000 payment in what insiders at the supermarket called, quite plainly, the ‘‘direct ask approach’’.
Indeed, Coles had calculated the value of the benefit to Red Bull of its improved supply chain at $400,000 but thought it would be a sport and only ask for half that amount from the beverages company.
The casual request for the cash was part of a pilot program where Coles sought payments from some of its key suppliers, and the biggest suppliers in the Australian grocery sector, to help pay for what it claimed was improvements to the supermarket’s supply chain.
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