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Coles has hit out at Canberra for “politicising” cost-of-living issues to attack supermarkets and deflect difficult questions about inflation.
The grocery giant’s chairman, James Graham, told shareholders Coles was well aware of economic pressures faced by customers and was continually seeking ways to respond and build customer trust.
“In this context it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations,” he told the company’s annual general meeting on Tuesday.
Coles and rival Woolworths have been in the sights of politicians and the consumer watchdog after a damaging year for the sector’s reputation.
Coles chief executive Leah Weckert and chairman James Graham at the Coles Group AGM.Credit: Elke Meitzel
The Australian Competition and Consumer Commission launched legal action against the pair in September, alleging they misled shoppers by substantially raising prices on hundreds of popular products before marginally lowering them and passing the reduction off as a discount.
But Graham said the fluctuations were the result of price rises from suppliers and not a deliberate attempt to fleece consumers.
“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.”
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Coles and Woolworths together control about two-thirds of the grocery sector. A separate Senate inquiry has accused them of abusing their market power to the detriment of shoppers and suppliers. The Coalition has threatened to introduce laws that would allow the major chains to be forcibly broken up.
In response to a question from a shareholder about how Coles was working to minimise regulatory risks, Graham said the company was committed to ensuring all parts of the business do the right thing.
“We are fully co-operating with all of the inquiries that are being undertaken,” he said.
“But I do think there has been a wider ambition of some behind those inquiries to seek to perhaps provide answers to more difficult issues which have been arising from, as I mentioned, inflation, which has been seen at earlier times.”
Coles executives will front the ACCC’s supermarkets inquiry later in November.
AAP