Woolies slams SPC Ardmona’s leaks

Woolworths insists its relationship with SPC remains strong, despite disappointment the cannery made talks public.

Woolworths chairman Gordon Cairns said the retailer had been surprised SPC dragged negotiations out into the media. Picture: AAP.

Woolworths has hit out at the leaking of confidential negotiations with cannery SPC Ardmona that left it briefly confronting a PR nightmare earlier this month.

The issue related to the potential reneging on a highly-spruiked $70 million supply deal for certain home-brand products to be sourced from SPC in Victoria.

The tentative initial agreement had come in 2014 at a time when the Coca-Cola Amatil-owned SPC was at risk of closure, with the leaking of challenging talks on November 7 this year quickly followed by a formal three-year canned fruit deal a couple of days later.

Woolworths chairman Gordon Cairns told a willing audience at the retailer’s AGM in Sydney this afternoon the retailer had been surprised by SPC dragging the negotiations out into the media.

“We were disappointed when the discussions were reported in the press,” he said.

“Quite frankly, there would have been a better way of handling it. We have (since) reached a very, very amicable settlement with SPC.”

Despite the clear tension around the SPC deal, Mr Cairns insisted the group’s relationship with its largest supplier, Coca-Cola Amatil, remained strong.

“We have a great relationship,” he said.

The commentary came alongside questioning from shareholders over its broader relationship with suppliers, as the group faced court this year over allegations it requested cash payments from suppliers in late-2014.

The Australian Competition and Consumer Commission contends the actions amounted to unconscionable conduct as the requested payments were claimed to be a way to offset a profit shortfall in the 2015 fiscal year.

Mr Cairns today reasserted the retailer’s confidence it did not breach the law in comments made in front of an audience that included ACCC chairman Rod Sims.

“We have very strong legal advice that our behaviour is not unconscionable,” he said, explaining why the group had not taken a settlement.

“Rather than admit to something we didn’t believe to be the case, we have challenged it.”

Despite the confidence in winning the case, Mr Cairns conceded Woolworths’ actions were not in line with how it wants to treat its suppliers.

“It was normal negotiating practice at that time,” he said.

“(But) we’ve set a higher standard that believes in mutuality of benefit.”