Woolworths insists it has zero tolerance approach for retribution against suppliers who make complaints

Retail giant Woolworths has again rejected suggestions it treats suppliers poorly, saying it has a zero-tolerance policy for action against any partners who make complaints about it.

The big supermarkets’ dealings with suppliers, trade partners and other parties has come under the spotlight in recent months through government and regulator inquiries and a Senate probe into supermarket prices, at which the Woolworths boss Brad Banducci and Coles chief Leah Weckert appeared last week.

Further answers to Senators’ questions to Mr Banducci were released late on Friday, including to the now-infamous exchange he had with Greens Senator Nick McKim about Woolworths’ return on equity.

Mr Banducci and Senator McKim spent nearly an hour of Mr Banducci’s appearance discussing the figure, after the chief executive said it was not a figure Woolworths commonly used. The stand-off only ended after Senator McKim threatened to find Mr Banducci in contempt, which carries a six month jail term, and Mr Banducci said he would take the question on notice.

In Woolworths’ response on Friday, the retailer said its return on equity in the 2023 financial year was 27.8 per cent, and dug in that Woolworths preferred to look to return on funds employed, because it measured its operating performance on total capital invested by equity and debt providers and was not affected by capital structure.

Elsewhere, the company said it introduced a new complaints integrity policy last June to ensure trade partners “would not be subject to commercial detriment or adverse consequences as a result of raising any complaint with Woolworths”.

“We will not tolerate any reprisal against a trade partner for making a complaint under the grocery code,” the retailer said.

“We are committed to demonstrating fair treatment of all complainants, which is fundamentally important to our processes.”

Action would be taken against buying team staff who engaged in retribution or reprisal, including formal investigations and disciplinary action.

“If a reprisal is found by the (supermarkets) managing director to have occurred, a formal apology will be made and corrective and/or remedial action,” Woolworths told the Senate.

Amid claims of smaller producers feeling intimidated given the scale of the supermarkets, Woolworths also said nearly 25 per cent of its circa 3300 supermarket trade suppliers had an annual turnover of less than $5 million.

Ms Weckert, who did promptly tell the Senate that Coles’ return on equity was 31 per cent, also emphasised Coles did not use that metric to measure its success, particularly given it leased the majority of its stores. The number of properties on its balance sheet has decreased by about one-third in value and number compared to five years ago, it said.

Coles, in its written response to the Senate, said comparisons on the return on equity metric internationally were difficult given it was a “pure play food and drinks company” compared to peers globally that owned banks and other companies requiring a higher capital base.

“Coles pays out the vast majority of our profits in dividends which means we don’t accumulate significant equity over time,” the company said.

But Coles said requests for historic prices was commercial-in-confidence and was kept for between six months to two years.