Recently I was talking to the rep of a grocery maker about her experience selling products to Coles (I won’t name her for obvious reasons). Anyway she was telling me that if Coles decided they’d stop selling one of her products she’d be charged about $15,000 to delete the line. “You get charged to stop selling an item?” I asked, gobsmacked. “Yep,” she said matter of factly, like this was as normal as getting dressed in the morning. Still taken aback by the concept of it all I went home that night and found an article in the Australian Business Review with excerpt of a Coles email
outlining the policy and more mind boggling charges and conditions Coles imposes on its suppliers.If you’ve been watching the news lately there has been lots of similar examples about Coles and Woolworths – none more insidious than “Perfect Profits Day
,” where it’s been alleged Coles asks its suppliers for payments to make up gaps in its profit forecasts. Imagine getting a bill from a business you sell products to because they haven’t made as much money on them as they thought they would? I marvel at the sheer creativity Coles executives display when it comes to getting money out of its suppliers and the more I read the more it sounds like something out of Terry Gilliam’s “Brazil”.
When people know these things I wonder why they aren’t leaving the big two supermarkets in droves. Instead the opposite seems to be true. But why? When you do find yourself in their fluoro lit aisles it’s obvious, the big two supermarkets are convenient, cheap, have a big range and are everywhere. I know there are many people who do want an alternative place to shop – currently we see 300 of them try us out each month and then drift away because shopping our way is too hard. And this is why we are crowdfunding for new webshop software. We need tol remove the hard parts of buying ethically at Fair Food and we need to lower our prices with better logistics systems. So when somebody can’t stomach the way the big supermarkets do business, leaving or staying is the only consideration to make.