Countdown faces backlash

HAMISH RUTHERFORD
Last updated 09:28 13/02/2014

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Countdown faces a mounting consumer backlash after Labour MP Shane Jones accused the supermarket company of using ‘‘Mafioso’’ tactics demanding cash payments from Kiwi suppliers.

For the second time in as many days the Australian-owned company issued a statement defending its actions, yesterday ‘‘categorically’’ rejecting Jones’ claims.

Using parliamentary privilege, Jones said Countdown management was demanding cash payments from Kiwi businesses on the grounds that its Australian shareholders were not happy with prior profitability.

‘‘They are demanding of Kiwi businesses payments, backdated cheques, and recompense, sir, for the losses the supermarkets assert they suffered last year,’’ Jones told Speaker David Carter in Parliament.

‘‘If they don’t pay these cheques, they are being told, ‘no shelf space into the future’. In any other country, sir, that’s blackmail. That is extortion.’’

Jones said suppliers had sworn him to secrecy and were living in fear, having been told by Countdown ‘‘if you breathe one word of this, we will blacklist you’’.

Describing the tactics as ‘‘Mafioso’’, Jones said they were the type of behaviour that fictional gangster Tony Soprano would be ‘‘very proud of’’’.

Following the claims Jones delivered a letter to the Commerce Commission asking for an investigation into New Zealand’s supermarkets, something Labour has promised if it wins the election.

Minutes after Jones made the statement, Katherine Rich, chief executive of the Food and Grocery Council, issued a release saying that the organisation was aware of ‘‘a number of incidents’’ where members had been asked for retrospective payments.

‘‘We have raised our general concerns about this practice with the supermarket chain involved. This is a serious issue that is new to the New Zealand grocery sector and we view it as an unwelcome development.’’

Dave Chambers, managing director of Countdown’s owners Progressive Enterprises, later issued a statement rejecting Mr Jones claims.

‘‘We’re very proud to have a long history of supporting New Zealand suppliers and we have strong relationships with more than 1200 local and multinational companies here,’’ he said, adding that the company would ‘‘fully cooperate with any enquiries from the Commerce Commission’’.

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Countdown had already faced calls for a boycott in the wake of complaints from Kiwi suppliers that their products were being removed from supermarket shelves across the Tasman as Progressive’s Australian brand Woolworths engages in a fierce ‘‘buy Australian made’’ campaign.

On Tuesday Chambers said it was ‘‘upsetting’’ to hear that some people did not want to shop at Countdown, as he insisted there was no ban on Kiwi products in Australia and it was passing feedback onto Woolworths.

But calls for shoppers to avoid Countdown appeared to be growing. Last night a Boycott Countdown Facebook page had 2000 ‘‘likes’’, more than double what it had earlier in the morning.

Jones himself called for shoppers to avoid Countdown, saying he hoped consumers across the country would not support the importation of a ‘‘corrupt culture’’ by Australian shareholders into New Zealand business.

"I’ll go to Pak n’ Save because the Aussies should pack up and go home."

- BusinessDay

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