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ACCC, ASIC demand documents and books from Retail Food Group amid multiple investigations

Besieged Southport franchisor Retail Food Group has revealed two federal Government watchdogs have demanded it produce records and documents as investigations into possible illegal activities continue.

The ACCC and ASIC have demanded RFG hand over company records.
The ACCC and ASIC have demanded RFG hand over company records.

BESIEGED Southport franchisor Retail Food Group has revealed two federal Government watchdogs have demanded it produce records and documents as investigations into possible illegal activity.

It has flagged a risk for the company if compensation is sought by the agencies on behalf of franchisees and former franchisees, or if the company and its directors were slapped with “potentially significant civil penalties”.

In its devastating full-year results report, revealed after the ASX closed today, RFG said the Australian Competition and Consumer Commission had demanded it “provide documents and information in connection with the ACCC’s investigation of conduct it considers may possibly contravene the Australian Consumer Law in relation to RFG’s franchise businesses and operations”.

The offices of RFG at Olympic Circuit in Southport. Picture Glenn Hampson
The offices of RFG at Olympic Circuit in Southport. Picture Glenn Hampson

FRANCHISORS CAUGHT IN ACCC CRACKDOWN

RFG reported a $149.26 million net loss for 2018-19; revenue of $349.77 million, down 6.5 per cent from the $374.03 million logged last year; and underlying earnings down 28.9 per cent to $50.73 million from $71.36 million.

The company said the Australian Securities and Investments Commission had also issued demands, requesting it produce books, records and documentation in connection with their investigation of possible contraventions of the Corporations Act prior to September 25 last year.

RFG operates Brumby’s Bakeries.
RFG operates Brumby’s Bakeries.

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RFG said it had fully co-operated with the agencies, but would “defend its position” if legal action was taken.

“It is currently not possible to determine whether the investigations by the ACCC will result in legal proceedings being brought against the group or its directors and officers, and what the financial impact of such proceedings, if any, may be for the group in the future,” RFG said in its directors report.

“However, if the ACCC bring proceedings against the group or its directors and officers in regard to the possible contraventions raised in the notices, this could result in the imposition of potentially significant civil penalties if the ACCC is successful.

“Additionally, the ACCC could seek compensatory orders on behalf of franchisees or former franchisees.

“In the event legal proceedings are initiated, the Group intends to defend its position.”

RFG said it had provided for all legal costs incurred last financial year related to responding to and dealing with the matters.

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Original URL: https://www.goldcoastbulletin.com.au/business/accc-asic-demand-documents-and-books-from-retail-food-group-amid-multiple-investigations/news-story/f240420dff478ae7a49801c3e4acbe0d