Labour has alleged similar problems in New Zealand.
Coles faces Australian Consumer and Commerce Commission (ACCC) action for unconscionable conduct in dealing with suppliers.
“The ACCC alleges that Coles used undue pressure and unfair tactics when negotiating with suppliers, provided misleading information and took advantage of its superior bargaining position,” Cosgrove said.
“These actions were allegedly directed towards more than 200 small suppliers.
“The behaviour of supermarkets towards suppliers is an issue of international concern.
“The allegations and prosecution of Coles shows that bullying and unfair tactics occur internationally.
“The Commerce Commission in NZ is taking this seriously with seven investigators and is issuing Section 98 subpoenas to compel evidence and people.
“We have been working on a proposal to address these issues, one that is tailor-made to NZ circumstances, not just Xeroxed off from another jurisdiction.”
There were investigations on both sides of the Tasman now, Cosgrove said.
“This issue (in NZ) was raised by Labour while the Government, which knew about it, sat idly by and did nothing.
“This is an issue that must be thought through very carefully, as there are hundreds of millions of dollars at stake, as well as thousands of jobs.”
The ACCC has started Federal Court action against Coles alleging unconscionable conduct under what the supermarket called its Active Retail Collaboration (ARC) programme.
The competition watchdog is alleging that in 2011 Coles developed a strategy to get cheaper prices from its suppliers and one of the methods was a rebate to be paid by suppliers to reward Coles for the purported benefits to them of the ARC programme.
It is alleged Coles targeted $16 million in rebates from smaller suppliers and was seeking ongoing rebates based on a percentage of the price it paid for the grocery products.
There are investigations on both sides of the Tasman now, Labour Party commerce spokesman Clayton Cosgrove says.
The commission said Coles gave some suppliers only days to agree to the rebates and if they refused suppliers were threatened with commercial consequences.
“The ACCC alleges that Coles used undue pressure and unfair tactics in negotiating with suppliers, provided misleading information and took advantage of its superior bargaining position, so that its overall conduct was in all the circumstances unconscionable,” ACCC chairman Rod Sims said.
“If this conduct is established in court, the ACCC expects that the community will share the ACCC's view that business should not be conducted in this way in Australia.”
Coles said it would defend itself and it was committed to negotiating fairly and working collaboratively with its suppliers.
“The ACCC legal action concerns a detailed supply chain programme implemented by Coles over two years ago as a part of its strategy to develop a more efficient and internationally competitive supply chain,” it said.
“The project involved improvements to both supply chain collaboration and efficiencies in logistics.
“It was designed to deliver benefits to Coles, suppliers and customers through lowering costs and improving availability of stock in our stores.”
