Govt eyes Aussie supermarket moves

Countdown Supermarket.

The Government is watching Australian moves to promote fair play between supermarkets and their suppliers despite an independent investigation yesterday finding no evidence Countdown had bullied its suppliers into making retrospective payments.

Suppliers' lobby group the Food & Grocery Council was yesterday standing by its claims Countdown was "unfair" in dealings with its members even though the Commerce Commission found no evidence of illegal behaviour by the company.

The competition watchdog spent nine months investigating allegations first aired by former Labour MP Shane Jones that Countdown's Australian-owned parent, Progressive Enterprises, sought retrospective payments from suppliers.

The payments were purportedly to cover Countdown's losses on product lines which didn't generate expected sales and were said to be made under threat of suppliers' products being taken off shelves.

Mr Jones, who made allegations of "extortion" and "blackmail" under the protection of parliamentary privilege, was unwilling to comment but Food & Grocery Council chief executive Katherine Rich said: "We stand by our statements ... that Countdown did ask some suppliers for payments related to trading in previous periods".

That the commission found no breaches of the law, "doesn't mean business behaviour that New Zealanders would deem unfair has not occurred".

"The fact there were 90 complaints to the commission speaks volumes."

Progressive Enterprises managing director Dave Chambers was pleased the matter was finally over. His company "always negotiated in good faith and in a fair and transparent manner".

"We hope some lessons can be learned about the damage false allegations made under parliamentary privilege can cause," he said.

Labour's commerce spokesman Clayton Cosgrove said the law was not strong enough, noting the commission's Australian counterpart was prosecuting supermarket operator Coles for anti-competitive behaviour and that a voluntary code of practice for supermarkets' dealings with suppliers was being worked on.

Labour had prepared legislation to create a mandatory code of conduct for supermarkets here and would offer it to the Government next week.

Commerce Minister Paul Goldsmith said National would take a look at Labour's bill, "but we have no immediate plans to bring in a code of conduct".

Nevertheless he noted Australia's moves "and we're interested to see how that evolves".

Countdown countdown

February 12: Then Labour MP Shane Jones in Parliament accuses Countdown of a "shakedown", "blackmail", and "extortion" saying the supermarket operator demanded retrospective payments from suppliers to cover losses on the sale of their products. Mr Jones' claims are backed by the Food & Grocery Council.

February 13: Countdown's owner Progressive Enterprises confirms to the Herald it received $1 million to $2 million from a liquor company but denies the payment was one of those Mr Jones referred to.

February 19: Again in Parliament, Mr Jones claims Ralph Waters, the chairman of Progressive's Australian parent Woolworths leaned on New Zealand suppliers to discourage them from participating in a Commerce Commission investigation into his claims.

February 20: The commission investigates Mr Jones' claims.

November 20: The commission says it has found no evidence of behaviour by Countdown or Progressive that breaches the Fair Trading or Commerce Acts and will take no action.