Bunnings grilled at supermarket inquiry for squeezing suppliers and shelving boss
By Jessica Yun
Hardware giant Bunnings has been taken to task at the Senate inquiry into supermarket prices for its alleged mistreatment of its plant and flower suppliers and failing to send managing director Michael Schneider to face questioning over company practices.
Bunnings, owned by ASX-listed conglomerate Wesfarmers, has been accused by the industry association for plant growers of abusing its market power by pressuring suppliers to agree to unfair terms.
Senator Ross Cadell during a hearing for the supermarket inquiry last week.Credit: Alex Ellinghausen
Bunnings on Monday sent its manager for ethical sourcing, Laura Gaspert, and Belinda Rakers, the company’s category manager for green life products, to face the inquiry. Both executives defended the hardware chain’s practice of creating supply agreements that don’t contain purchasing commitments, and argued the company provides suppliers with weekly data on sales of their products instead.
However, NSW Nationals senator Ross Cadell was scathing of Bunnings’ persistent claim that it was committed to working with its suppliers to build strong relationships.
“This is the eighth time I’ve heard [this response],” said Cadell, who added that even Coles and Woolworths had had some suppliers say positive things about the supermarkets.
“No one is saying anything good about Bunnings in the green life supply. All the people who have come to you, that’s great because we’re told to ‘smile to survive’.
Bunnings managing director Michael Schneider did not appear at the Senate inquiry.Credit: Eddie Jim
Cadell asked the Bunnings executives: “People have said that they’ll say nice things to you because they want to keep contracts. Why is no one coming to us and saying you are good corporate citizens?”
“That hasn’t been our experience,” Gaspert said in response.
Bunnings posted a full-year revenue of $18.5 billion in fiscal 2023, which supported its parent Wesfarmers’ 18.2 per cent lift in group revenue for the period to $43.6 billion and a net profit of $2.5 billion.
Tasmanian senator Tammy Tyrrell noted the absence of Bunnings’ boss at the inquiry, and said both Woolworths chief executive Brad Banducci and Coles boss Leah Weckert had made themselves available to the inquiry. They are due to appear on Tuesday.
“We actually think that we’re best placed to support this committee,” Gaspert said. “We work with our suppliers daily. We have interactions with them all the time and can provide further clarity around how Bunnings actually does business with our suppliers.”
Tyrrell replied: “OK, I don’t agree, but thank you, appreciate it.”
Earlier, former Australian Competition and Consumer Commission chair Allan Fels expressed his concerns to the committee about Dr Craig Emerson’s interim report on the supermarket sector failing to back divestiture powers, which would result in supermarkets being forced to sell stores if they became too big.
“I don’t know if he did any study of it whatsoever,” Fels said. “He’s just picked up line one of the standard big retailer response, without really going into it.”
Fels has previously argued that divestiture powers would act as a “big stick” against anticompetitive behaviour.
The Senate inquiry into supermarket prices is one among several inquiries being held into the sector as government bodies examine the various factors behind heightened food and grocery prices.
In Emerson’s review into the food and grocery code of conduct, Woolworths and Coles called for other retailers to also be included in the code if it was made mandatory, with Woolworths naming Bunnings, Amazon, Costco and Chemist Warehouse. Gaspert and Rakers on Monday reiterated Bunnings’ rejection of the notion that the hardware company should be subjected to the code.
Woolworths and the Australian Retailers Association have also called for global food manufacturing giants such as Coca-Cola and Nestlé to front the inquiry. The role of multinational giants is set out in the Senate inquiry’s terms of reference, but none have been called to appear.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.