The Countdown allegations

Stuff reports:

Countdown faces a mounting consumer backlash after Labour MP Shane Jones accused the supermarket company of using ‘‘Mafioso’’ tactics demanding cash payments from Kiwi suppliers.

For the second time in as many days the Australian-owned company issued a statement defending its actions, yesterday ‘‘categorically’’ rejecting Jones’ claims.

Using parliamentary privilege, Jones said Countdown management was demanding cash payments from Kiwi businesses on the grounds that its Australian shareholders were not happy with prior profitability.

‘‘They are demanding of Kiwi businesses payments, backdated cheques, and recompense, sir, for the losses the supermarkets assert they suffered last year,’’ Jones told Speaker David Carter in Parliament.

‘‘If they don’t pay these cheques, they are being told, ‘no shelf space into the future’. In any other country, sir, that’s blackmail. That is extortion.’’

Jones said suppliers had sworn him to secrecy and were living in fear, having been told by Countdown ‘‘if you breathe one word of this, we will blacklist you’’.

Describing the tactics as ‘‘Mafioso’’, Jones said they were the type of behaviour that fictional gangster Tony Soprano would be ‘‘very proud of’’’.

Following the claims Jones delivered a letter to the Commerce Commission asking for an investigation into New Zealand’s supermarkets, something Labour has promised if it wins the election.

When this was first reported I was sceptical of the claims. However:

Minutes after Jones made the statement, Katherine Rich, chief executive of the Food and Grocery Council, issued a release saying that the organisation was aware of ‘‘a number of incidents’’ where members had been asked for retrospective payments.

‘‘We have raised our general concerns about this practice with the supermarket chain involved. This is a serious issue that is new to the New Zealand grocery sector and we view it as an unwelcome development.’’

This suggests to me there is a very real issue here, and Shane Jones *may* have done a public service by highlighting it.

While I guess you can argue any company can ask any other company for more money, having a customer demand suppliers hand over money based on some sort of retrospective discount is very dubious. Now Countdown have denied the allegations and the manner in which they have asked may not be as Jones says, But the statement by Rich lends credence to the allegations that what is happening is undesirable – it may or may not be legal – but it stinks.