Called Speak Up, the externally‐hosted hotline is meant for trade partners of any Woolies division to report matters of a serious nature where the standard escalation procedures have either been exhausted or are not an option.
“Woolworths has clear, long‐standing and accepted procedures for trade partners to report any issues. However we recognise there is always opportunity to strengthen our systems,” Woolworths CEO Grant O’Brien said.
“This is why we have introduced the Speak Up service for trade partners to use when normal escalation methods have been exhausted or are inappropriate,” O'Brien added.
The Speak Up service is for breaches of the law or instances where trade partners believe that dealings with a Woolies division or employee have created issues, Woolies said.
These issues include fraud, corruption or behaviour that threatens others, people or product safety risk, restrictive or unconscionable trade practices, conflict of interest and bullying.
Market power concerns could have prompted move
It was bullying that prompted the hotline. There have been long-standing concerns that retailers wield too much power and are bullying suppliers during price negotiations.
Recently, aware that food and grocery suppliers maybe too scared to report abuse of power tactics by supermarkets, the Australian trade watchdog said that it would offer protection for reporting parties.
Talking to The Australian, the Australian Competition & Consumer Commission chairman (ACCC) Rod Sims said the regulator was unable to take action against big retailers because suppliers were too scared to give evidence.
Sims said the regulator was ready to provide a shield of secrecy for suppliers who blow the whistle on retailers that have been conducting a long-running price war that has created a hostile environment for suppliers.
AFGC welcomes move, calls for Ombudsman
The Australian Food and Grocery Council (AFGC), which has been calling for a retail Ombudsman to rein in the retailers, called the launch of the Woolies hotline a welcome interim measure.
“It’s encouraging that Woolworths has taken up the concerns of food and grocery manufacturers by acknowledging there are real problems facing suppliers,” AFGC chief executive Kate Carnell said.
Carnell pointed out that Australia and New Zealand have the highest levels of supermarket concentration in the world, creating a huge power imbalance between the major retailers and suppliers.
By establishing this new mechanism, Woolies has acknowledged many suppliers are not comfortable in bringing their concerns directly to the company for fear it may impact on their ongoing trading relationship.
“As the two major supermarkets have nearly 80% of the market, suppliers can’t afford to do anything that may jeopardise sales to these retail giants,” she remarked.
“Pending the establishment of a Supermarket Ombudsman, we urge Coles to follow Woolworths’ example and set up a similar system.”