Woolies accused of squeezing price cuts from suppliers
06/07/2012 - Supermarket giant Woolworths has been accused of using "brutal negotiations" to squeeze price cuts from suppliers to help fund a price war with rival Coles.
Some suppliers have been given two weeks to find cost savings of between five and ten per cent, or face the prospect of their products being removed from Woolworths' shelves, Fairfax reports.
One supplier told Fairfax the supermarket giant was using its "dominant size" as a "blunt negotiating instrument" in the hopes of improving its standing against Coles.
"This is only about boosting Woolworths' margins ... there has never been any discussion about passing the cost reductions on to consumers," the unnamed source said.
Fairfax reports 50 suppliers have contacted the Australian Consumer and Corruption Commission (ACCC) with complaints about the big supermarkets.
The ACCC said its confidential talks were progressing well and it expects to report its finding by the end of the year.
Woolworths spokeswoman Claire Kimball said there was "nothing unusual happening at the moment".
"When we put our position to vendors we often ask them to come back to us in two weeks with their response," Kimball said.
She added: "Negotiating terms of trade is something we do day in and day out. Any conclusions reached in negotiations have to be mutually agreed."
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