21 Feb 2014

Suppliers have contacted minister too

6:03 pm on 21 February 2014

Commerce Minister Craig Foss says suppliers have contacted him in the wake of allegations against Countdown, and their reports could be passed to the Commerce Commission.

Craig Foss.

Craig Foss. Photo: RNZ

The commission has launched a formal investigation into Countdown, which Labour MP Shane Jones has accused of using extortionary tactics against suppliers.

Mr Foss told Morning Report he has had "some correspondence from various people" and they've been asked if their information can be passed to the commission, or advised how to contact the commission themselves.

The minister says he himself does not know where the truth lies in this matter. "You've got Mr Jones at one end making very, very serious allegations," he says, "and you've got a party at the other end absolutely denying all of those allegations. So I do not know. But I do know that the right place to address all those allegations is the Commerce Commission."

Countdown and its parent company, Woolworths Australia, have denied forcing suppliers to make retrospective payments or pressuring them not to cooperate with the commission.

Mr Foss says the commission's decision to investigate shows that the Commerce Act is working as it's supposed to.

For the past week, Mr Jones has been using parliamentary privilege to make accusations against Countdown; he now admits engaging in hyperbole to generate momentum on the issue and says he's going to take more of a back-seat role to ensure he doesn't undermine the inquiry.

"The ball is now in their court," he says. "I'm going to dial everything back and just watch where the ball bounces."

He adds: "I'm not telling any household where to go and buy their kai. I brought issues forward and now I want the Commerce Commission to take a vigorous approach that uncovers is there something seriously awry at the heart of our commerce policy in the supermarket sector.'

The commission is promising anonymity to anyone who comes forward, saying it will only disclose their identity by consent or if required by law. The investigation is expected to take several months.

'Whole sector' should be investigated

The Green Party says the commission should broaden its investigation to cover the whole supermarket sector.

"It's clearly a duopoly of the whole sector," says Greens co-leader Russel Norman. "There's pretty limited competition, and I actually think it would be quite useful to get a Commerce Commission view of the whole sector."

Dr Norman says an ombudsman should be appointed to oversee the sector and enforce a code of conduct.

Labour Party commerce spokesperson Clayton Cosgrove says the commission should be given greater powers, so that it can assess the impact of a business's actions, not just its intent.

Mr Cosgrove says he has proposed a law change along those lines.