THE competition watchdog claims it was acting in the best interests of suppliers and the "new spirit" of the Food and Grocery Code of Conduct when it named and shamed Woolworths and Aldi over their latest supply agreements.
The ACCC and Woolworths are embroiled in a war of words over the supermarket chain's new supply contracts, which the competition regulator claims could be interpreted as "take it-or-leave-it documents".
But Woolworths hit back, saying the ACCC put out a press release only hours after contacting it with fresh concerns on Wednesday.
ACCC chairman Rod Sims said the code was developed to establish good-faith negotiations between retailers and suppliers, and to ensure suppliers weren't subject to random requests for money.
"We are concerned that the way these agreements are structured there still could be these extra requests for payments.
"We have a new code and it's supposed to be a new way of working and these agreements that went out didn't reflect this new way of working."
He said at a minimum the agreements did not fit with the spirit of the new code and at the urging of suppliers he had made the issue public.
"We could have kept just engaging in the background, but the view of the suppliers was we should make this public so other suppliers knew they didn't have to sign these agreements," Mr Sims said. "And that they had the protection of the code any way."
Mr Sims acknowledged Woolworths had made changes to its supply agreements after the commission took issue with aspects of them, but he said there were still concerns.
"We would argue they weren't very good agreements in the first place," he said.
Woolworths said it was "surprised and disappointed" with the ACCC and its failure to recognise its prompt response to criticism of the wording of a letter that it send to a number of suppliers.
Woolworths said the ACCC only raised additional concerns with it late on Wednesday, "just hours before contacting the media".
"A minor working issue was raised with us in relation to a letter sent to a number of our suppliers offering to amend agreements to among other things comply with the Grocery Code," Woolworths said.
"The wording in question has been used in letters to our suppliers for many years and was designed to avoid changes to agreements being missed or misunderstood."
Woolworths said it changed the paragraph in the letter and resent it to suppliers and at the behest of the ACCC it agreed to contact any supplier that had already signed up to the agreement.
Aldi was more measured in its response, saying it would respond to the specific issues raised by the commission.
"Aldi's commitment to sign and implement the Food and Grocery Conduct Code before any other major supermarket is testament to our business values and dedication to quality supplier relationships," the German discounter said. "The spirit of the code reflects Aldi's current practice with suppliers, forging long-term sustainable relationships."
The Food and Grocery Code of Conduct is a voluntary code, enforced by the ACCC, which only came into effect in June this year.
All the major supermarket chains except Metcash signed up to the code, which sets minimum standards for retailers and wholesalers in relation to supply contracts, and prohibits retailers from threatening suppliers with termination without "reasonable grounds".
