Monday, February 1, 2016

ACCC pursuit of Woolworths to be long and complicated

View from Level 18, Federal Court in Sydney. Justice Yates is taking the "long view: on ACCC case against Woolies

The Federal Court has laid out a what could be a long and complicated timeline as the competition watchdog pursues Woolworths over its tactics against supermarket suppliers.

Justice Yates has issued deadlines on when both Woolworths and the Australian Competition & Consumer Commission (ACCC) must file their respective cases and produce documents.

Highlighting the complex legal issues, Justice Yates said in the order issued on Friday that a hearing date for the case would not be set until after 4 August this year.

The ACCC instituted proceedings against Woolworths last December alleging it had engaged in unconscionable conduct when dealing with a large number of its supermarket suppliers.

The regulator is alleging that in December 2014, Woolworths senior management approved a scheme known as "Mind The Gap" as part of an urgent drive to reduce an expected shortfall in gross profit.

The ACCC alleges Woolworths sought $60.2 million in payments and that while some suppliers were expected to refuse, it knew some suppliers would ultimately agree.

It is alleged that the requests were made when Woolworths was "in a substantially stronger bargaining position than the suppliers" and that not agreeing to a payment would be seen as "not supporting" Woolworths.

Back in December, ACCC chairman Rod Sims said Woolworth's conduct was unconscionable and in breach of Australian Consumer Law.

The first deadline is on 15 February when Woolworths is expected to file its defence with the court.

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