Coles responds to criticism over supply chain scheme

Posted by AFN Staff Writers on 30th November 2011

Coles supermarket chain has responded to reports that its new ‘Active Retail Collaboration’ supply chain scheme constitutes uncompetitive behaviour.

Coles’ Active Retail Collaboration technology provides a breakdown of the estimated amount of stock it will require from any particular supplier at any point of the year.

However, recent media reports claim that some Coles suppliers believe the scheme’s primary focus is making money rather than streamlining the supermarket’s supply chain.

Coles spokesman Jim Cooper said that Coles is currently negotiating with a number of suppliers about signing up to its Active Retail Collaboration scheme. Suppliers must pay to sign up to the scheme.

Mr Cooper told Australian Food News today, “We have identified win-win outcomes in a more efficient supply chain and we want to progress these on a cooperative basis with suppliers. Those suppliers who sign up for Active Retail Collaboration get additional benefits from Coles’ investment in supply chain efficiency.”

“Active Retail Collaboration is not mandatory. We will continue to work with suppliers who choose not to sign up, but they do not get the benefit of the detailed data and insights the ARC project and supplier portal provide,” he added.

This is the latest in a series of criticisms of Australia’s leading supermarkets over the way they use their market power.

Australia’s Federal Minister for Industry, Senator Kim Carr, has passed on concerns to the Australian Competition and Consumer Commission (ACCC). Minister Carr said he had received complaints from food manufacturers that leading supermarkets have been auctioning off shelf-space with a view to excluding competitors, as well as extracting concessions in contract negotiations by denying access to shelves.

Senator Carr said, “The series of complaints that are put to me from reputable companies representing a very broad spread of companies, suggest to me that there is serious cause for concern and that’s why I referred the matter for the ACCC to look at.”