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Coles accused of hiking prices in return for $25,000 payment

Leaked emails shared with Four Corners show how the supermarket has profited from higher prices.

Supermarket industry insiders have revealed how Coles and Woolworths customers are “getting screwed” with higher prices at the checkout, while the grocery giants profit from rising prices.

A Four Corners investigation found Coles had increased the price of products for its customers in return for one-off payments from its suppliers.

According to leaked emails shared with the program by a supermarket insider, a multinational supplier (who was not named) asked Coles to hike its prices by around 5 per cent to cover its rising costs.

Coles supermarket
A Coles insider said customers are “getting screwed” by higher prices at the checkout. (Source: AAP)

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The price hike was initially dismissed by a Coles buyer, who said it was based on “customer needs” and the “competitive environment”.


The buyer claimed the increase would end up costing the supermarket hundreds of thousands of dollars and, if the supplier wanted to go ahead with the price increase, the supermarket would need to be compensated to close this “gap”.

According to the supermarket insider, Coles provided no actual data about where the “gap” came from.


Emails show the supplier opted to offer a $25,000 one-off payment to the supermarket to close some of this gap, which was to be put towards online promotions. Days later, the Coles buyer said this offer had been accepted and the full price increase would come into effect.

According to the Four Corners industry source, Coles took both the $25,000 payment and passed on the full increase to customers.

"They [customers] are the ones that are getting screwed,” the source told the ABC program. “It just means higher prices at the shelf because the supermarkets are extremely greedy.

"Their main objective with these price increases, regardless of what they're saying to the public, is a margin-enhancement exercise. They want to make more money for every price increase that goes through the supermarkets."

Coles has dismissed the source’s claim that this amounted to price gouging and noted this was one supplier out of more than 8,000 the supermarket worked with.

Woolworths accused of similar tactics

Woolworths has also been accused of seeking rebates from its suppliers when hiking prices. Another insider told Four Corners the supermarket asked to share in any price increases granted to its suppliers.

The investigation claims this means consumers ended up paying more, suppliers did not get the full price increase and Woolworths increased its profit margins.

Woolworths CEO Brad Banducci denied employing these tactics and said the supermarket was “very keen to make sure we don’t pass on anything more to our customers than is required”. Banducci walked out of the ABC interview.

Coles and Woolworths control 65 per cent of the grocery market in Australia. The two supermarket giants will front a senate inquiry on price gouging in the coming weeks.

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