They’re at it again! Supplier says Woolworths demanded funds again despite court action

Just yesterday we reported that Woolworths was being taken to court by the ACCC for allegedly demanding “Mind the Gap”

Just yesterday we reported that Woolworths was being taken to court by the ACCC for allegedly demanding “Mind the Gap” payments from more than 800 suppliers, in an attempt to make up for a profit shortfall at the end of the year.

Today, a supplier has spoken with Fairfax media, saying the supermarket giant had put its hand out once again – telling suppliers they must pay because they coughed up last year.

The supplier, who did not want to be named for fear of retribution, said “Even with the Australian Competition and Consumer Commission announcement a few days ago, we are getting [Woolworths] buyers saying ‘because this happened 12 months ago we need to cycle those payments’. And by cycle those payments they mean, we got that money last year, we need it again this year,” he said.

“They weren’t talking about Mind the Gap but they said we received this dollar amount off you last year, during December, we need to cycle that money again and repeat that money again.”

Fairfax reports that Woolworths senior management is keeping quiet as it reviews the ACCC claims, but that sources suggest Woolies will argue the practice of asking for “Mind the Gap” payments is industry practice here and around the world.

Yesterday, the ACCC announced it was pursuing legal action against Woolworth for what the chairman Rod Simms described as the worst case of bullying he’d ever seen.
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, and that part of this strategy was demanding payments from suppliers out of the blue. It’s alleged the supermarket acquired $18 million from 821 suppliers with these “Mind the Gap” payments.

Can you believe Woolworths has put its hand out again while this practice is under investigation? Does this make you think twice about shopping there?

  1. How much would it hurt suppliers in the short term who could tell Woolworth s to shove it? Their stores would look pretty empty with no stock on the shelves!

  2. Anonymous  

    Sounds like extortion to me. Brad.

    • Robb Gee  

      Bloody arrogant Woolworths. They don’t care who they burn in their grab for profits. We the customer have to put up with their arrogant crap by killing the best rewards program they had and replacing it with a system that gives money back only if you buy their substandard “local” and imported rubbish. Then they turn around and savage their suppliers like some slavering dog who thinks the catcher can’t run fast enough. Guess what woollies, the catcher is getting closer. We the customers are turning our backs on your substandard products and services and you suppliers are wising up and getting a new handle on how supply and demand works. If I was a shareholder right now I would be selling shares as quickly as possible. If I was government right now I would be telling them to fix their problem because they won’t be allowed to sell out to the Chinese.

  3. Unbelievable. I won’t shop at the big 2 I go to Foodland because I can get the brands I want and they Hi light Australia and South Australian products.

    • No Foodland stores are Independently owned. The 2 main owners are Drake and Romeno’s although there are quite a few other independent owners as well. They are a South Australia company but I think they are in NT as well.

    • Kathy Low lol, and these “independent ” owners purchase direct from the farmers? that is like believing choc milk comes from brown cows.

    • Think what you like and keep shopping at the big 2 if you want to. They are a South Australia company and if you have ever been to their stores you wil see that they promote Australia and South Australian products by putting tickets on them telling you where they come from.

    • My son and daughter-in-law in Adelaide always shop at Foodland; I have accompanied them when visiting and am so impressed with the quality and variety. I wish we had them here in Nth Qld.

  4. It’s getting that way with Woolworths that it’s almost impossible to shop there, their stores are like obstacle course’s. How often can anyone go in there without their staff blocking isles whilst refilling the shelves? This practice used to be done when their stores were closed, but with these greedy corporate slime cutting costs, the public has to suffer.

  5. Have almost not entered a Coles/Woolworths store for the last year, haven’t missed them.

  6. Corporate greed at its worse, their not happy having a monopoly and making a fair profit they want more, capitalist bullying it’s disgusting.

  7. Maybe we should boycott Woolworths, I have been very unhappy with them lately put a complaint to head office didn’t even get a reply, how much do they value their customers so it would be expected they couldn’t value their suppliers

  8. They supply you with goods, you pay THEM. You do not have a moral right to a particular level of profit. If you can’t run your business right, it’s your problem. Get real Woolworths.

  9. I am not shopping at Woolworths so much now my main shopping is now done at Aldi and its great I can get just about everything I want there, the only thing they don’t have yet is a deli to buy freshly sliced lunch meat instead of packaged lunch meat.

    • Do you imagine Aldi are paying Farmers top dollar so they can sell to you cheaply? Not to mention all profits go overseas?

    • Meg Solomon why don’t you phone Aldi and ask them, all I know is Aldi is one of the cheaper supermarkets to shop at, they have also said many times before that the profits stay in australia – again if you want to check that phone Aldi and ask them not me I just shop there.

    • Phil Spencer  

      Aldi shareholders are foreign and will be receiving dividends or equivalents. Aldi like most internationals will be fiddling intra-company payments to minimise taxes. The “profits” they’re telling you stay in Australia can be manipulated however they like.

    • It stands to reason the only reason Aldi can sell products more cheaply is that they pay less for them in the beginning! They’re not a charity!

    • Goodness me I say I shop at Aldi and the floodgates open. Next time I won’t say a darn thing. Plenty of others on this post have said they are not shopping at Woolworths or Coles anymore so where are now shopping? Aldi perhaps?

      • Aldi saves by having a highly efficient system of transport and packing shelves. If you watch carefully you will – for example – see the truck arrive with milk already stacked onto the shelves which are on wheels. They wheel the shelves out of the truck, into the store. The shelves on wheels which are already there are pulled out an taken back to the truck and the new ones wheeled in. There are lot of instances where Aldi has it all over the others with efficiency. They are able to run the story with about four people at any one time with this method. They get their goods at the same places that Woolworths do but have some of them packed under their own labels. If you want the specials at Woolworths you have to buy three of one item to get the cheaper prices. One item is just as expensive as it always was. It’s all a con to fool the unobservant.

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