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Scathing Federal Court judgement finds: Coles takes corporate behaviour down, down
For more information contact Jeremy Roberts on 0433 620 850 or Nick Xenophon on 0411 626 677
22 / 12 / 2014
Scathing Federal Court judgement finds:
COLES TAKES CORPORATE BEHAVIOUR DOWN, DOWN
Independent Senator for South Australia, Nick Xenophon, has responded to the Federal Court’s decision that Coles acted unconscionably towards up to 200 suppliers by calling for the passage of his bill to give courts the power to break up companies that abuse market power.
“This case is a tipping point for Australia’s supermarket duopoly, which controls about 80 per cent of the market. Laws are needed to give courts the power to bust up companies that do the wrong thing,” said Nick.
“The judgement is rightly scathing and the details of the case clearly show that Coles’ behaviour was like something out of The Sopranos; Coles should hang its head in shame.”
Senator Xenophon’s bill, introduced into the Senate in March this year, will be reported on by the Senate Economics Committee early next year.
“The UK and the United States have divestiture powers that act as a deterrent to big companies not to misuse their market power. We clearly need such a law in Australia, which has the highest concentration of supermarket ownership in the developed world,” said Nick.
Senator Xenophon said the judgement by Federal Court judge Michelle Gordon “lifted the lid” on Coles’ mistreatment of its suppliers.
In imposing a $10 million fine and $1.25 million in costs, Justice Gordon said in part: “Misconduct was serious, deliberate and repeated. It was contrary to good conscience. Coles treated its suppliers is a manner not consistent with acceptable business and social standards. Coles demanded payments from suppliers to which it was not entitled by threatening harm to the suppliers that did not comply with the demand. Coles withheld money from suppliers it had no right to withhold.”
Senator Xenophon said Woolworths should not escape criticism given internal emails aired last week allegedly showing how Woolworths tried to bully suppliers to pay an additional $70 million so as to meet its profit guidance by the end of the year. The ACCC is investigating.