Key Points
- Coles’ chairman has said politicians are “politicising” cost-of-living issues to deflect attention from inflation.
- Ongoing Senate and ACCC inquiries are investigating supermarket pricing and supply-chain practices.
- Coles and Woolworths control about two-thirds of the grocery sector and have been accused of abusing market power.
Coles has hit out at Australian politicians for “politicising” cost-of-living issues to attack supermarkets and deflect difficult questions about inflation.
The grocery giant’s chairman James Graham told shareholders Coles was well aware of economic pressures faced by customers and was continually seeking ways to respond and build customer trust.
“In this context, it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations,” he told the company’s annual general meeting on Tuesday.
Coles and rival Woolworths have been in the sights of politicians and the consumer watchdog after a damaging year for the sector’s reputation.
The Australian Competition and Consumer Commission (ACCC) in September, alleging they misled shoppers by substantially raising prices before marginally lowering them on hundreds of popular products and passing it off as a discount.
But Graham said the fluctuations were the result of price rises from suppliers and not a deliberate attempt to fleece consumers.
“The matters raised by the ACCC relate to a period of significant inflation leading to a sharply increasing level of supplier cost price increases,” he said.
“The subsequent discounts offered to customers on these items were the result of promotional investment by the supplier and Coles which delivered a reduction in the shelf price at a time when households were under significant cost-of-living pressure.”
Coles and Woolworths together control about two-thirds of the grocery sector and have been accused by of abusing their market power to the detriment of shoppers and suppliers.
The Coalition has threatened to introduce laws that would allow the major chains to be forcibly broken up.
In response to a question from a shareholder about how Coles was working to minimise regulatory risks, Graham said the company was committed to ensuring all parts of the business do the right thing.
“We are fully cooperating with all of the inquiries that are being undertaken,” he said.
“But I do think there has been a wider ambition of some behind those inquiries to seek to perhaps provide answers to more difficult issues which have been arising from, as I mentioned, inflation, which has been seen at earlier times.”
Chief executive Leah Weckert said Coles was increasingly concerned about a rising trend of threatening situations directed at front-line staff over the past 12 to 18 months.
“We are working with industry to address this worrying trend happening across many retailers, while continuing to roll out de-escalation training to our team members to help reduce the number and severity of incidents,” she said.
Coles executives will front the ACCC’s supermarkets inquiry later in November.
