UK RETAILERS 'ABUSE POWER', PARIS CONFERENCE HEARS

Published: 23 July, 2008

By Christian Davis

A former senior vice-president of Southcorp and non-executive director of Evans & Tate has hit out at the UK's major multiple retailers, accusing them of arrogance and abuses of power. David Combe, who has also held a series of senior Australian diplomatic posts, was speaking at the Wine Evolution 2004 conference in Paris last week. Chairing the Wine Financial Forum, Combe said that the UK retailers' talk of partnerships' was a load of cobblers, as the Poms would say. And guess who were the greatest mugs to fall for it? The good old fawning, forelock-tugging cap doffers from down under. Such is the arrogance of UK retailers that today, with the exchange rate going against their major suppliers, they consistently commit abuses of retail power which, quite frankly, if committed in Australia would represent major breaches of the trade practices laws and almost certainly result in the offending corporation being fined and the offending individuals quite probably being invited to enjoy the hospitality of HM prisons,' said Combe. Combe detailed four instances of abuse of power by unnamed UK retailers. First, a bogof, on which the supplier was making a loss to clear his tanks, was unilaterally changed to a 2-off promotion, giving the retailer a 300,000 profit over and above the agreed price of A$22 per case. Second, a 2-off promotion to sell 40,000 12- bottle cases was switched to 1 off, making it less attractive and leaving 20,000 unsold cases to be collected by the supplier. Third, a 1.50-off promotion was changed to 1.25 off to take into account a worsening exchange rate. The supplier was told: Take it or leave it. The door is wide and the queue is long.' Finally, Combe said a supplier set aside large quantities of bulk wine at the request of a retailer who kept deferring the promotion. When the producer needed to empty tanks, he was told: We'll take delivery of it but only on consignment and if we do decide to use it, your listing fee will be 30,000.' Combe, who is now a consultant, said: The only "partnership" they are really interested in is one in which there is a "screwer" and a "screwee", with the supplier always being cast as the latter.' He concluded: My challenge is this - is there some way in which we as an industry, and across national borders, can act in concert to expose these abuses and press for a "code of conduct" and a fairer deal in the treatment of exchange rates between us as suppliers and the UK retailers?'

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