In a riveting exchange during the Australian Competition and Consumer Commission’s (ACCC) inquiry into Coles’ supply practices, the supermarket giant’s executives faced tough questioning over the nature of their ‘commitments’ to fruit and vegetable growers. The revelations from the hearing paint a picture of a system that leaves suppliers in a precarious position, leading to frustration and wasted stock.
Coles’ ‘Non-Binding’ Supply Commitments Under Scrutiny
Naomi Sharp SC, counsel assisting the ACCC inquiry, grilled Coles executives on the specifics of their supply arrangements with growers. Despite Coles making supposed ‘commitments’ to purchase certain volumes of produce, Sharp pressed the executives to confirm that these were not legally binding and did not always translate into actual orders.
Anna Croft, Coles’ chief commercial officer, appeared to repeatedly sidestep direct questions on this issue. “When Coles says commitment, what you really mean is [a] non-binding forecast?” Sharp asked pointedly, visibly frustrated by Croft’s evasive responses.
The Fallout for Suppliers
The inquiry previously heard testimony from fruit and vegetable suppliers who expressed a strong preference for firmer purchase commitments from Coles. Without reliable volume guarantees, growers risk overplanting and being left with unsold stock, leading to substantial financial losses and produce waste.
“We need more certainty in our supply arrangements with Coles. These so-called ‘commitments’ leave us exposed and can result in huge amounts of wasted product and lost income,” said one frustrated supplier who testified at an earlier hearing.
Anonymous Coles supplier
Implications for the Industry
The ACCC’s inquiry into Coles’ supply practices could have far-reaching consequences for the supermarket sector and its relationships with growers. If the commission finds evidence of unfair or misleading conduct, Coles could face penalties, mandatory changes to its supplier agreements, and reputational damage.
More broadly, the spotlight on Coles’ ‘non-binding’ supply commitments may prompt wider reforms to improve transparency and fairness in supermarket-supplier relationships. Growers are likely to push for stronger legal protections and more reliable purchase guarantees to mitigate their risk exposure.
The Road Ahead
As the ACCC inquiry continues, all eyes will be on Coles and how it responds to the serious questions raised about its supply practices. Will the supermarket giant take proactive steps to address supplier concerns and strengthen its commitments? Or will it face increasing pressure from regulators and industry stakeholders to overhaul its approach?
One thing is certain: the fallout from this inquiry will be closely watched by suppliers, consumers, and competitors alike. The future of Australia’s fruit and vegetable supply chain hangs in the balance, and the outcome could reshape the industry for years to come.
