Coles demands suppliers stay cheap or be replaced with private label

It’s a tough old time for supermarkets, and everyone should have incredible sympathy for them, or this is the story
Lifestyle

It’s a tough old time for supermarkets, and everyone should have incredible sympathy for them, or this is the story being presented by Coles Managing Director, John Durkin who has come out today and accused grocery suppliers of treating Australia like “Treasure Island”. Fairfax reports him casting a warning to suppliers that they must justify any increases in pricing or be prepared to be replaced in their stores with branded labels.

Mr Durkin has taken the side of the debate that calls suppliers out for charging more in Australia than in other countries like Thailand and it is an interesting point of view, but is it self-serving or a legitimate complaint all us consumers should be aware of?

Coles has not long ago reported 6.6% annual growth achieving a profit of 1.78 billion dollars apparently fuelled in 2014/15 by lower food and grocery prices according to News Ltd reports from earlier this year.

“If we continue to see branded price increases home brand will take up a higher proportion of sales – consumers only have a limited budget to spend,” he said to the SMH.

​Mr Durkin has been complaining about multinationals uneven pricing for Australia for more than seven years, since he came to his role in 2008 and has sworn that Australians are being charged a significant amount more for their packaged and preserved groceries than consumers in other countries.  In fact he says Australian consumers are paying as much as 10 to 100 percent more than in the UK.

Mr Durkin is flagging his concerns after receiving notice from a number of suppliers of price rises including Arnotts who he has referred to a 10% rise on products like biscuits and stock.  He has also eluded to price rises from Coca Cola Amatil and Schweppes.  He has asked these companies to provide justification for the price rises.

The shot over the bow of international grocery companies comes as Coles, Woolies and Aldi have all confirmed that they will play within the new Food and Grocery Code of Conduct, a policy put in place to ensure that suppliers are fairly treated in the fight for the supermarket margins.

So the question of the day on this is whether you think Mr Durkin is acting in the interests of consumers or in the interests of his supermarket chain’s profitability?

Do you think we are treated like treasure island by large companies like Coca Cola and that Durkin is fighting the right fight, or do you think he is putting his self interest out there on display?  A big debate here I think.

  1. Be replaced with home brands. Is he serious? Finding branded products at Coles is becoming more and more elusive. I guess ‘blame the supplier’ is the latest story they expect customers to believe.

  2. well both, if ths has store has no customers, it won’t be in the best interest of the store

  3. With the exception of simple things like sugar and flour I avoid “Home Brand” products like the plague.

  4. Yes he is if he is targeting large multinational suppliers of packaged goods. I don’t think he’s referring to small family owned farms supplying fresh food like fruit and vegetables.

    • Products are continually disappearing off the shelves they have just come up with an excuse

  5. BUT it’s OK for Coles to put prices up…if domething costs mote yo make or for wages etv then your SUPPLIERS HAVE THE RIGHT TO INCREASE THEIR PRICE YOU IDIOTS…by the way COLES LIKE WOOLIES CAN KEEEP THEI HOME BRAND / PRIVATE LABELS GEAR AS I REFUSE TO BUY IT…YOU ARE ONLY TRYING YO PUT ALL OUR ASSIE MANUFACTURING CO’S OUT OF BIZ THEN LESS JOBS HERE WHILE YOU BRING HEAPS JUNK IN FROM O/SEAS AND TRY TO FORCE IT UPON US!

  6. What I want to know is how much does the primary producer get. How can these multinationals like Coles & Woolworths keep the prices down/low & expect the suppliers to keep going? How can some of these people live? When they MUST produce a product at the right price for these chains. It really gets up my nose because no-one thinks about the people who produce the things we buy. All most people look for is how much they will be out of pocket/ how much does it cost. It’s quality not quantity we should look at.
    Look at our clothes that we buy. Made in Chiba or Bangledash and the quality is poor. And then people has the audacity to complain when it falls apart. Save your money until you can afford something better maybe even Australian made!!!
    Rant over.

    • Wendy Reiser  

      This is a God-incidence if ever I saw one! I was just reading 2Timothy 2 and in verse 6 Paul says “The hardworking farmer should be the first to receive a share of the crops”!!! Not the minuscule token gesture that the big supermarkets dole out under tight fisted regimes!! The farmer (right from the cattle/sheep producers to the vital fruit and vegetable producers and all in between) do the hard yards, giving all they have to produce and provide the best, then the money hungry big boys come along and squeeze every last drop of their hard won fight out of them by offering the disrespect of a pittance to these hardworking farmers, then turn around and tell the consumers that they are looking after the customers!! What a load of poppy-cock!! It’s all about their share prices and their own collective greed and big business pleasing. We have the best primary producers in the world yet that means virtually nothing to the supermarket chains! Actually, ‘chains’ is an interesting word for them – they’re locked in the ‘chains’ of me, myself and I. Not the way God ever wanted to see His children treat their brothers and sisters. Wake up Australia before its too late.

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