Countdown denies standover tactics

STACEY KIRK AND HAMISH RUTHERFORD
Last updated 08:29 14/02/2014

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A "culture of fear" among supermarket suppliers means the success of any investigation into anti-competitive behaviour will rely on anonymity, Labour MP Shane Jones says.

The Countdown supermarket chain has insisted it has nothing to hide from investigators, as the Commerce Commission confirmed it was looking into claims of anti-competitive behaviour.

On Wednesday Jones used parliamentary privilege to accuse the Australian-owned company of "Mafioso" tactics, claiming suppliers were being ordered to make retrospective payments to cover Countdown's past losses or risk permanent exclusion from the supermarket's shelves.

The Food and Grocery Council confirmed it had received reports from its members of requests for retrospective payments.

Prime Minister John Key said yesterday that while the allegations were unsubstantiated, he believed an inquiry might be a good idea.

Today, Jones said suppliers would only help the inquiry if they were guaranteed anonymity, with a culture of fear instilled by supermarket groups had even made it to Parliament.

"Basically, it's going to come down facts. It'll come down to emails, it'll come down to recorded file notes and I just hope that the culture of fear that has now penetrated Parliament [doesn't affect the investigation]," Jones said on Firstline.

"Because the letter I actually wrote to the Commerce Commission is sitting on the table in Parliament, but Parliament itself now is too scared to release it to the media.

"The only way they'll be able to talk to the Commerce Commission is if they have anonymity."

Countdown said there was no basis to the claims.

Dave Chambers, managing director of Countdown owner Progressive Enterprises, said he called in his senior colleagues on Wednesday to ensure none were making demands without his knowledge, before denying the allegations.

"We've got nothing to hide and we believe nothing to fear as well," he said.

While negotiations with the company's 1200 suppliers were at times "robust", the company did not seek additional payments after a deal was made, or to renegotiate deals, he said.

"If we buy 10,000 cans of baked beans from Wattie's, and we only sell 8000, we're left with 2000, that's our problem ... We have a deal and we stick to a deal," he said.

"Discussions with suppliers happen every single day . . . and at the end of the day we believe they're transparent and fair."

Countdown had already defended itself this week, as consumers reacted to news that its owner, Woolworths, was removing New Zealand products from supermarket shelves in Australia. The move applied to New Zealand-sourced products the supermarket's own brands.

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Last night more than 5000 people had "liked" a Facebook page calling for a boycott of Countdown. Chambers said he found the response "distressing" but it was too soon to tell if sales were being affected.

On Monday Countdown will meet the Food and Grocery Council, which said last night that it had been "reassured" by Countdown's claims that it did not demand retrospective payments.

Commerce Minister Craig Foss said yesterday that he had written to the Commerce Commission.

"They're very serious allegations, new allegations in the New Zealand market, which is a major concern, which is why I brought it to the attention of the Commerce Commission," he said.

Last night the commission confirmed it had received a complaint alleging "anti-competitive behaviour by Countdown towards their suppliers".

Chairman Mark Berry said it would now ascertain the basis of the allegations and whether it constituted a breach of the Commerce Act.

"The commission takes all complaints regarding anti-competitive behaviour very seriously," he said.

"We encourage anyone who has information relevant to the allegations to contact us."

Jones yesterday accused the Government of "selling out" consumers to the likes of Countdown, but refused to comment on his allegations outside of the House.

"Before I became an MP I came out of the fishing industry, so I'm no stranger to robustness in commerce," he said.

"I do think in this case though, we're just really happy to see that Craig Foss the Minister of Commerce, has written encouraging the Commerce Commission to conduct the inquiry."

- © Fairfax NZ News

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