Woolworths executives tell ACCC inquiry into supermarkets it has not engaged in ‘land banking’

Woolworths boss Amanda Bardwell has been asked about internal documents showing the retailer’s strategy around buying and holding land.

Woolworth's executives including CEO Amanda Bardwell, left, and former CEO Brad Banducci, second from left, appearing before a ACCC public hearing as part of its ongoing supermarkets Inquiry.

Woolworths executives have been grilled by the competition regulator over the state of the market, pricing and allegations that the retailer engaged in “land banking” to stymie its rivals from opening new stores.

The hearings come amid a wave of regulatory criticism, oversight and investigation into the nation’s largest supermarket chains, Woolworths and Coles.

The pair dominate the $120bn supermarket sector and have been at the centre of a political and regulatory storm including a blistering Greens-led Senate inquiry this year, and a court case launched against both chains by the Australian Competition and Consumer Commission for allegedly using fake or illusory discounts on grocery items to lure in shoppers.

Woolworths chief executive Amanda Bardwell, former CEO Brad Banducci and a number of senior executives appeared before the ACCC public hearing into the supermarkets, as part of two days of testimony.

There were no “knock out” questions, compared to a heated exchange between Mr Banducci and Greens senator Nick McKim at the Senate inquiry where the Woolworths boss was threatened with contempt and possible jail for not answering a question to Senator McKim’s liking.

Still, the ACCC public hearing did lift the lid on the highly criticised and anti-competitive strategy of “land banking”.

On Monday counsel assisting the inquiry, Naomi Sharp SC, presented an internal Woolworths document which showed the chain’s strategy and internal thinking around buying land and sites to develop for new stores.

The redacted document showed Woolworths sat on land for “strategic reasons” other than developing for land and stated “properties held on balance sheet not planned for a future development or indefinite long-term hold”.

Ms Sharp asked Ms Bardwell and Woolworths property boss Ralph Kemmler if Woolworths had ever engaged in “land banking”. Both denied Woolworths had been involved in land banking. However, Ms Sharp then produced the redacted document and asked if it was in fact an example of land banking.

Mr Kemmler told the hearing there could be a number of strategic reasons for which these properties were held but not for development. He denied this was an example of land banking but the land was not held for “competitive reasons”.

Ms Sharp said she found the explanation “strange”.

She said the ACCC interim report into the supermarket sector found Woolworths had about 110 sites it was sitting on. Mr Kemmler said of those 110 sites only 65 were owned by Woolworths.

Woolworths chief executive Amanda Bardwell appearing before a ACCC public hearing as part of its ongoing Supermarkets Inquiry. She is sitting next to former Woolworths CEO Brad Banducci.

As the public hearing progressed, Ms Bardwell who has been the Woolworths boss for only 11 weeks, often responded that she wasn’t able to answer some specific operational questions, with Mr Banducci, who jokingly referred to himself as retired, sitting next to her and answering many questions on behalf of Woolworths.

Through the almost six hours of testimony it was left to Mr Banducci to respond to specific Woolworths operational issues and they were joined to give testimony as well by the former boss of its supermarkets arm Natalie Davis, who has since left the retailer to become the new chief executive of private hospitals operator Ramsay Health Care.

The public hearings have been running for a number of weeks, led by ACCC deputy chair Mick Keogh, however with Woolworths making its first appearance on Monday the chair of the ACCC, Gina Cass-Gottlieb, took a seat at the table for the first time to ask questions of witnesses.

Ms Cass-Gottlieb only last month launched a blockbuster court case against Woolworths and Coles alleging both misled shoppers by using fake discounts on hundreds of grocery items.

Meanwhile, in the morning session of the hearing, Ms Sharp asked Ms Bardwell if she agreed the Australian supermarket sector was “fiercely competitive” – despite it being “dominated” by Woolworths and Coles.

“It is fiercely competitive,” Ms Bardwell said. “We are a substantial part of the market overall, which is dramatically changing and we compete every single day for customers to choose to shop with us.”

Ms Sharp asked if Coles remained Woolworths’ closest competitor.

“Coles is certainly a major competitor among with many others we talked about this morning, including Aldi playing a very important role,” Ms Bardwell said. “Costco, Amazon, Chemist Warehouse, now Bunnings as well, all of those compete.”

Ms Cass-Gottlieb questioned Mr Banducci about pricing in the supermarket sector.

The ACCC public hearing will continue to question Woolworths executives on Tuesday, with executives from Coles to appear before the ACCC hearing on Thursday and Friday.

At this stage former Coles chief executive Steven Cain is not slated to appear beside current Coles boss Leah Weckert.

Coles executives to appear before the hearing this week will include Ms Weckert, chief commercial officer Anna Croft, chief customer officer Amanda McVay and general manager of property Fiona Mackenzie.

Originally published as Woolworths executives tell ACCC inquiry into supermarkets it has not engaged in ‘land banking’