NZ: MP accuses Countdown of extortion
Using Parliament privilege today, Jones said he had been in contact with Kiwi suppliers about meetings they were being summoned to with Countdown management, in which they were told that if they did not make cash payments, they faced permanent exclusion from the shelves. Likewise, if they revealed the meetings to anyone, they would be "blacklisted".
Jones said: "In this speech I'm fulfilling my duties as a Parliamentarian to alert us to a level of extortion that is going unchallenged in our food and grocery sector," Jones said in Parliament, describing events as "the Countdown shake down".
Jones said Kiwi suppliers seeking to do business with Countdown were being called into meetings with management, where they were taken into meeting rooms. "They're being told by the Australian-owned supermarket 'our profit margins did not meet the shareholders' expectations last year. We want more profit out of you'."
Jones said: "They are demanding of Kiwi businesses payments, backdated cheques, and recompense, sir, for the losses the supermarkets assert they suffered last year.
"Sir, and if they don't pay these cheques, they are being told, 'no shelf space into the future'. In any other country, sir, that's blackmail. That is extortion," Jones said.
"A number of firms have been told their products will not be placed on the shelves of our supermarkets unless they make backdated payments and make remuneration for loses sustained by the supermarkets," Jones said.
Australian managers were telling Kiwi suppliers: "You will hand over a cheque, for my historic losses... or you will never gain shelf space on the supermarket. And if you breath one word of this, we will blacklist you."
Countdown managing director Dave Chambers said the company rejected "categorically" Jones' claims. "We're very proud to have a long history of supporting New Zealand suppliers and we have strong relationships with more than 1200 local and multinational companies here," Chambers said in a statement. "If any MP or supplier has questions or concerns about our business they are welcome to contact us directly to discuss them. We will fully cooperate with any enquiries from the Commerce Commission."
Jones called on Countdown to end the tactics. "Stop threatening, stop your Mafioso tactics against Kiwi businesses, treat them with a decent shot. Give them a fair go and stop threatening them that they'll be bankrupted or blacklisted if they squeak, as to this extortionary behaviour. Sir, this verges on corruption," Jones said. "I'll go to Pak n' Save because the Aussies should pack up and go home."
Food and Grocery Council chief executive Katherine Rich issued a short statement this afternoon following Jones' comments. "We're aware of a number of incidents where our member companies have been asked for retrospective payments. We have raised our general concerns about this practice with the supermarket chain involved," Rich said. "This is a serious issue that is new to the New Zealand grocery sector and we view it as an unwelcome development. We have asked members to report further occurrences."
A social media campaign calling for a boycott of Australian-owned supermarkets in retaliation for Kiwi products being stripped from supermarket shelves across the Tasman is gathering momentum. A Boycott Countdown Facebook page set up last week had attracted more than 1000 "likes" by this morning and a chain letter-style email calling for a boycott of Countdown and hardware chain Bunnings has been circulating this week.
Countdown managing director Dave Chambers used the company's website to deny New Zealand goods were banned in Woolworths supermarkets in Australia. "The decisions made by Woolworths supermarkets to support local farmers apply to a small number of own-brand product lines and are not specific to New Zealand," he said in a statement posted yesterday.
Horticulture New Zealand believes the serious allegations made by MP Shane Jones regarding supermarket chain Countdown need to be investigated by the Commerce Commission. HortNZ has not been told by any of its 5500 commercial fruit and vegetable grower members of any instances of the practices Mr Jones described in Parliament yesterday.
HortNZ knows the relationship between the major food retailers and their grower suppliers can be challenging. “It is not always comfortable, but the allegations made by Mr Jones go way beyond a robust commercial relationship. These allegations need to be investigated by someone independent, like the Commerce Commission, and it needs to be done quickly. When you are a grower supplying a major customer you have to respond to their demands. But if their customers are engaging in practices that are illegal in this country, then that needs to be sorted out quickly,” Peter says.
For more information:
Peter Silcock
Horticulture New Zealand
Tel: +64 027 470 5665
Email: Leigh.Catley@hortnz.co.nz
www.hortnz.co.nz
Additional source: stuff.co.nz