Woolworths launches independent complaints-hotline for its suppliers

Posted by AFN Staff Writers on 1st March 2012


Australian supermarket chain Woolworths has launched Speak Up, a new, externally-hosted hotline – delivered by Deloitte – for Woolworths suppliers to report trading concerns of a serious nature after standard procedures have been exhausted.Issues, which can be reported anonymously, include fraud, corruption, threatening behaviour, people or product safety risks, theft, conflict of interest, bullying and harassment. Woolworths says that the delivery by Deloitte assures a greater level of independence.

The Australian Food and Grocery Council (AFGC) released a media statement commenting on the new system. In the statement, AFGC Chief Executive Kate Carnell said there are currently serious problems facing food and grocery manufacturers and suppliers in dealing with major supermarkets.

Ms Carnell said, “Australia and New Zealand have the highest levels of supermarket concentration in the world, creating a huge power imbalance between the major retailers and suppliers.

“By establishing this new complaints mechanism, Woolworths has acknowledged that many suppliers are not comfortable bringing their concerns directly to the company for fear it may impact on their ongoing trading relationship.”

Australian Food News reported on Monday 27 February on a new government report which suggested Australia’s two major supermarkets have nearly 80 per cent of the market.

The Woolworths launch of its “Speak Up” hotline comes after ACCC Chairperson Rod Sims’ invitation to suppliers to whistle-blow to the ACCC any abuses of market power by supermarket groups. However, some industry observers are saying that Mr Sims has been more reticent to discuss in public forums the issue of alleged supermarket power abuses. 

The ACCC also has previously incorporated a whistle-blowing scheme in its highest level compliance program against a company engaging in anti-competitive conduct. The move by Woolworths may therefore be connected with a desire by Woolworths to improve its existing Competition and Consumer Act compliance programs. It might also be viewed, however, as a pre-emptive move in the context of pressure from the food and grocery industry (through representative body, the AFGC) for an independent Supermarket Ombudsman office to be instituted through government policy.

 It remains unclear whether suppliers to supermarkets will feel adequately protected by the new Woolworths scheme and its assurance of anonymity.

Identification by the supermarket of a supplier-specific complaint emanating from a whistleblower might still leave a supplier commercially exposed. Even if this does not involve direct retaliation by the supermarket, the exposure of the complaint might be sufficient to jeopardize the continuity of the supplier’s relationship with the supermarket.