Suppliers squeezed in price wars

WOOLWORTHS is looking to squeeze price cuts from scores of suppliers to help fund its price war with Coles - and buyers from the supermarket giant have threatened to remove products from the shelves if the demands are not met.

In what one food manufacturer described as ''the most brutal negotiations that I have experienced in my three decades in the industry'', a number of suppliers have been given two weeks to find cost savings of between 5 and 10 per cent, or face being removed from the aisles.

The independent senator Nick Xenophon, an outspoken critic of the combined 80 per cent market share of Woolworths and rival Coles, said yesterday he would call for Woolworths to be pulled before a Senate inquiry to explain its actions.
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Just five months after the chairman of the Australian Competition and Consumer Commission, Rod Sims, called on suppliers to dob in supermarkets that abused their power, suppliers to Woolworths have been told to slash their ''trading terms'' - industry jargon for the net cost of supplying their product.

''We were told straight out to find a reduction in terms or we wouldn't be stocked any more,'' said a managing director of one Woolworths supplier.


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