ACCC slams Woolworths for “worst case” of bullying ever seen

The Australian Competition and Consumer Commission is taking Woolworths to court for attempting to squeeze an extra $60 million out of

The Australian Competition and Consumer Commission is taking Woolworths to court for attempting to squeeze an extra $60 million out of its 800 suppliers, in what ACCC boss Rod Simms says is the worst case of unconscionable conduct he has ever seen.

To make matters worse, Woolworths was allegedly applying this pressure while rival Coles was facing charges of bullying.

The ACCC alleges that in December last year, Woolworths developed a strategy, which was approved by senior management, to urgently reduce Woolworths’ expected significant half year gross profit shortfall by 31 December 2014.

It is alleged that one of the ways Woolworths sought to reduce its expected profit shortfall was to design a scheme, referred to as “Mind the Gap”.

The ACCC alleges that, in accordance with the  scheme, Woolworths’ category managers and buyers contacted 821 suppliers and asked for “Mind the Gap” payments from those suppliers for amounts which included payments that ranged from $4,291 to $1.4 million, to “support” Woolworths. Not agreeing to a payment would be seen as not “supporting” Woolworths.

The ACCC also alleges that these requests were made in circumstances where Woolworths was in a substantially stronger bargaining position than the suppliers, did not have a pre-existing contractual entitlement to seek the payments, and either knew it did not have or was indifferent to whether it had a legitimate basis for requesting a Mind the Gap payment from every targeted supplier.

The ACCC alleges that Woolworths sought approximately $60.2 million in Mind the Gap payments from the Tier B suppliers, expecting that while many suppliers would refuse to make a payment, some suppliers would agree.

It is alleged that Woolworths ultimately earned $18.1 million from those suppliers that did cough up.

Mr Simms told The Australian he was surprised and extremely disappointed at Woolworths behaviour, particularly when Coles was facing similar allegations.

“I think this is at the high end of egregious behaviour,” he said.

“In term of unconscionable conduct this is when you look at the amount of money involved, which is $18 million, by that standard it is clearly one of the worst we have ever seen.’’

The ACCC has taken a recent interest in the conduct of the two big supermarkets after claims that suppliers were too afraid to speak out about their bullying tactics.

“A common concern raised by suppliers relates to arbitrary claims for payments outside of trading terms by major supermarket retailers. It is difficult for suppliers to plan and budget for the operation of their businesses if they are subject to such ad hoc requests.”

The case will be heard in February, and the ACCC will seek compensation for those suppliers affected.

Does it surprise you to learn that Woolworths has been engaging this this kind of behaviour? Do you think the large supermarkets will ever change their ways?


  1. Bullying has no place in Australia and Woolworths should be fined, it is a case of the big guy muscling in on the little guy

  2. I thought that market domination was illegal in Australia. If that is true then how come they own the petrol franchises, the hardware stores and most other businesses that people use from day to day. What about the small businesses that have gone broke and if in business still do it hard just to stay afloat.!

    • They make their prices so cheap, that no one goes to the competition and they drive the little guy out of business, it has happened in every town in Australia, look at local shopping strips, in the 50’s and 60’s they were thriving but now all you will see are empty shops. It is legal but I am not sure it is very moral

    • We all know it is amoral. Unfortunately, we are all part of the problem as a result of our search for cheaper prices in order to make ends meet!
      Get rid of the overpaid CEO’s for a start.

    • Another thing I find very annoying is when you can’t find a particular brand but the shelf is full of Wollies brand, I prefer to go without than fall for this tactic.

      • gnasher  

        me, too. IGA is getting more of my business these days

    • Farmers make nothing. Woolworths, Coles etc are just middle men. Rent a shed, stock it with food and away you go.

    • I think the food quality and the presentation is far better in coles than woolworths.!

  3. Sounds a lot like extortion to me. It’s crazy that 2 companies can control 3/4 of the Australian market for an essential like food.

  4. Brian Lee  

    This needs the maximum possible publicity – I hope it gets it!

  5. Trouble is Woolworths has most people by the short and curlies with their so called specials and petrol discounts and rewards etc., I have seen people spend an extra $10.00 in Woolworths to make up their bill to $30.00 so they can get 4 cents a litre off their petrol which is on average less that $1.00. They also spend on things they don’t need to get reward points , doesn’t make sense to me but Woolworths are laughing all the way to the bank, yes, they are bullying you as well.

    • I agree Owen, there are obviously many people who are hopeless with basic Maths, sad really.

    • I never shop there, get f&v from f&v shop, meat from butcher and go to aldi’s for surprise

    • I also agree Owen. We have elderly friends who do this. I have tried to explain the maths to them but to no avail. They are convinced that they are saving money when they are actually spending more.

    • Yes , we also shop at local greengrocer and Aldi, yesterday I posted a comparison between Woolworths and local Greengrocer, for the same 4 items at Greengrocer $5.47, at Woolworths $21.91

  6. It is time the executives that make these types of decisions became personally liable for their actions. There was an interesting show on TV showing that showed how most corporations act like psychopaths. No morality, social consciousness often criminal in behaviour. It is no good prosecuting the company it’s time to prosecute the people who make the decisions.

  7. It’s Like the ‘mafia’ disgusting behavior to our farmers. Once exporting overseas becomes stronger they will dump Coles & Woolworths & the public will lose out from our beautiful clean quality produce. They will import poor quality ‘unclean’ food from overseas. They are already doing so, hence the last episode of bad frozen berries.
    Famers & producers need to be respected & paid their dues.

  8. Absolutely disgusting behaviour, how much more money do these greedy corporations want, it’s all about profit people apparently don’t matter. I will do my shopping at Aldi or IGA and bugger the big two.

    • Me too. And that’s a big effort on my part as the nearest Aldi to my little country town is a 3 hour round trip

    • I don’t shop much because I only holiday. But I travel to go to Aldi iga is no where close yet it was on the Gold Coast. I purchase from markets stalks farmers markets etc I prefer to put $ in the small mans pocket.

Leave a Reply

Your email address will not be published. Required fields are marked *