Coles to refund suppliers $12m

COLES has engaged in ‘unconscionable conduct’, and as a result it’s now being forced to refund more than $12 million. Oops.

COLES will refund more than $12 million to suppliers and allow them to exit the supermarket giant's retail program without penalty or having rebates reviewed, independent arbiter and former Victorian Premier Jeff Kennett has ordered.

The moves will result in further substantial ongoing savings for Coles’ suppliers, the Australian Competition and Consumer Commission said today.

"The arbitration process conducted by Mr Kennett has proven both extremely timely and effective with significant benefits to suppliers,” ACCC chairman Rod Sims said.

Mr Kennett said Coles had begun to implement changes that will affect the way it deals with suppliers, after the Federal Court made declarations in December that Coles had engaged in unconscionable conduct in 2011 in its dealings with certain suppliers.

As part of the resolution, the consumer watchdog established a process to provide redress for more than 200 suppliers.

The $12 million refund comes in addition to the $10 million penalty ordered by the Court.

“The high level feedback from suppliers is that they are largely satisfied with access to redress from Coles and the timely, efficient and low cost approach," Mr Sims said.

“A very large number [of suppliers] accepted the relief offered by Coles,” he said.