Bega chairman Barry Irvin says ‘extensive evidence’ required for Coles and Woolworths price hikes

The chairman of one of Australia’s top food groups says he is surprised by the ACCC’s fake discount claims, telling investors Coles and Woolworths demand extensive evidence for price hikes.

Bega Cheese executive chairman Barry Irvin says large customers such as Coles and Woolworths demand extensive evidence before approving any price hike. Pictures: Robert Hayson

Extensive evidence is required for suppliers to negotiate price rises at Coles and Woolworths, according to Bega executive chairman Barry Irvin, who says he is surprised by the competition regulator’s revelations about fake supermarket discounts.

The Australian Competition & Consumer Commission alleges Woolworths and Coles fooled customers into buying everyday groceries by using misleading discounts as high as 39 per cent, new court documents reveal.

Several Bega products have been caught up in the claims made by the competition regulator, including an allegation that the price of Bega Easy Melt Colby Block 500g was raised from $8.50 to $10.50 before a 12 per cent discount price of $9.50.

Mr Irvin told shareholders at the Australian Securities Exchange-listed group’s annual meeting in Bega, NSW on Wednesday that it had to justify to its larger customers such as Coles and Woolworths why a price rise was needed, saying there had been significant cost increases, particularly post Covid.

“We do indeed go to our customers and after we’ve exhausted all the efficiency opportunities that we might have, all the productivity opportunities we might have, all the things around ensuring the good economic position of the company, we are on occasion required to go to the market to ask for price rises,” Mr Irvin said.

“When we go to our larger customers, we generally need to justify those rises. This entails demonstrating that we have in fact experienced those rises and providing documentation to demonstrate that. That’s been the process for as long as I’ve been around quite frankly.”

The ACCC has alleged that in many instances decisions to discount a product were taken before shelf prices were raised, for the express purpose of establishing a higher comparative price.

“We say it’s important that pricing claims are accurate,” ACCC chairwoman Gina Cass-Gottlieb said last month.

“(But) it’s more important when consumers are seeking to manage budgets closely and that consumers need to be able to trust in the accuracy of a discount claim.”

Bega has expanded its stable in recent years to include Vegemite, Dairy Farmers and Meander Valley Dairy.

Shares in Bega fell 1.5 per cent to $5.23 on Wednesday.

Originally published as Bega chairman Barry Irvin says ‘extensive evidence’ required for Coles and Woolworths price hikes