ACCC checks out supermarket supplier dealings

Few people dare speak out against Australia's two biggest supermarkets.

They control 70 per cent of the grocery market and their business tentacles spread far and wide.

So the risk of criticising them can be high, particularly if you are a supermarket supplier.

The Australian Competition and Consumer Commission (ACCC) has now managed to get some suppliers talking, but only by promising to protect their identity.

"We originally found it very difficult to get the suppliers to talk to us," the ACCC's chairman Rod Sims told the ABC's AM program.

"So, I promised confidentiality to suppliers." And the plan seems to have worked.

The ACCC says it now has 50 complaints about improper and unlawful practices by supermarket giants Coles and Woolworths.

The specific nature of the allegations remain confidential, but they include claims that suppliers are being forced to make extra payments or risk having their products removed from the supermarket shelves.

Some suppliers also say their products are being discriminated against in favour of the supermarkets' own home brand products, which are now estimated to make up around a quarter of total supermarket sales.

"We've got some fairly credible and consistent issues that we now believe we need to investigate in some detail," Mr Sims added.

The Food and Grocery Council, which represents the suppliers, says it welcomes the ACCC's action, but gives no further details about which suppliers have spoken up.

However, the ACCC and the Food and Grocery Council say the supermarkets are being co-operative in discussing the accusations.

In a statement in response to the investigation, Woolworths says it "believes that open discussions with vendors are the best way to achieve the mutually beneficial goals".

Coles is letting its parent company Wesfarmers do the talking.

"We've got internal processes to ensure we behave in a responsible and ethical way," said Richard Goyder, the Wesfarmers managing director.

If the allegations against the supermarkets are proven, they can carry multi-million dollar fines.

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