Coles chair James Graham accuses leaders of ‘politicising’ cost-of-living crisis

Coles chair James Graham has taken a swipe at the nation’s politicians, accusing them of ‘politicising’ the cost-of-living crisis to attack supermarkets.

Coles chairman James Graham has lashed out at Canberra for “politicising” the cost-of-living crisis to attack supermarkets when only a few years ago during the Covid-19 pandemic and lockdowns the industry was seen as a “hero” for keeping the nation fed.

He also defended Coles in the face of the Australian Competition & Consumer Commission court case against the supermarket and its rival Woolworths over claims it offered “illusory” or “fake” discounts. Coles said it was fully aware of its legal requirements and was offering “genuine” discounts at its stores.

Addressing shareholders at Coles’s annual general meeting on Tuesday, Mr Graham launch­ed a spirited defence of the supermarket sector in the face of heavy criticisms from governments, regulators and a string of inquiries into the sector. “(Coles) was well aware of the economic pressures on customers, and we continually seek to find ways to respond and build customer trust,” Mr Graham said.

“In this context, it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations. This is in sharp contrast to the level of engagement and support of supermarkets by governments and regulators during the Covid lockdown years.”

The political heat on the supermarket industry and corporate Australia has been ­especially high following the Albanese government’s agreement to allow a Greens-led Senate inquiry into the sector. It has also asked the ACCC to conduct its own inquiry and introduce new laws governing the large supermarket retail chains.

This year’s AGM season has seen several chairs and CEOs push back against the intrusion of government over regulation and high taxes. Wesfarmers chair ­Michael Chaney, at the conglomerate’s shareholders meeting last month, chided unnamed parties for turning profit into a “dirty word”.

Coles chairman James Graham. Picture: NewsWire / Gaye Gerard

Mr Graham in his chair address on Tuesday also defended the role of Coles in the community against the government and regulatory backlash. He said Coles had more than 1800 retail outlets serving more than 14 million customers a week, supported by the commitment of 115,000 team members.

“That experience and the results of working together in the face of floods, bushfires and other natural disasters have shown the benefits of constructive engagement between business and governments, which is hopefully the template for the future when it comes to addressing the impacts of complex issues like inflation,” Mr Graham said.

After the AGM, The Australian approached Mr Graham on his concerns about the “politicised” nature of the cost-of-living debate, but he declined to comment further.

“I made my comments carefully when I said them,” he said. “I’m happy with the way my comments were said.”

Coles CEO Leah Weckert told The Australian on the sidelines of the AGM she would not “expand on the chairman’s comments”, but said the cost of living was a significant issue for many people.

“And it is really not surprising that it has become such a national issue and certainly we have, as we have shared with our shareholders today, worked to engage constructively and in good faith in all of the inquiries there are under way at the moment,” Ms Weckert said.

In terms of the ACCC court case before the Federal Court, Mr Graham said in his address that Coles took compliance with consumer law seriously, and it was always its aim to ensure discounts and specials were genuine.

He explained to shareholders that the price discounts – which ACCC chair Gina Cass-Gottlieb labelled as “illusory” – came after a bout of high inflation and were cushioned by it and its suppliers investing in genuine discounts and promotions for shoppers.

“The matters raised by the ACCC relate to a period of significant inflation, leading to a sharply increasing level of supplier cost price increases,” he said. “The subsequent discounts offered to customers on these items were the result of promotional investment by the supplier and Coles which delivered a reduction in the shelf price at a time when households were under significant cost-of-living pressure. We are very conscious of the significance of these allegations, as they go to the heart of customer trust.

Coles CEO Leah Weckert. Picture: Rebecca Michael

“As previously advised, we are defending these allegations, and we will continue to keep shareholders informed.”

Later at the Coles AGM, the board was asked about a range of issues, from its possible reputational damage in light of the inquiries and ACCC action to the continued underperformance of its liquor arm, modern slavery, responsible sourcing, wages for staff and sustainability.

The final hour was dominated by environmental lobbyists discussing three resolutions put up by a small group of shareholders over the sourcing of its seafood and the impact of that seafood farming on the environment.

The Coles chair was peppered with questions in particular on the impact of salmon farming in Macquarie Harbour, Tasmania, on the endangered Maugean skate. The activists said the Coles board should hang its head in shame if the skate was finally made extinct and asked if the board would resign on masse if this happened.

One resolution put up by these shareholders, representing 0.0018 per cent of all shares on issue, called for Coles to cease procuring farmed salmon for its own brand products from Macquarie Harbour by April next year. The resolutions failed to pass at the AGM.