Coles extends hold on suppliers

Coles radical supply chain restructure could be extended to its about 1450 Coles Express convenience and liquor stores.

Coles is mulling the extension of a supermarket supply chain overhaul to its about 1450 Coles Express convenience and liquor stores, according to Fairfax Media

Under the planned restructure, Coles will create a panel of "approved" field agents, also knows as "reps", who will use fees negotiated with Coles instead of suppliers to tender for food suppliers' services, cutting hundreds of million in costs from Coles' supply chain. 

Until now, the changes – which could threaten the viablity of the country's 20,000-strong workforce of independent grocery agents – were limited to Coles supermarkets but a confidential tender document shows they could be extended to the 630 Coles Express service stations and Coles' roughly 800 branded liquor stores, Fairfax Media said.

Coles liquor arms include Liquorland, First Choice and Vintage Cellars.

Coles would use its market power to reduce grocery agents fees – typically about 5% of sales – and reclaiming much of those fees for itself through agent rebates while tightening its grip over its own supply chain, Fairfax Media said. 

The overhaul is set to kick in at the end of the year and will start with five suppliers in its first two months, with an aim of being offered to all Coles grocery suppliers by late 2015.

Coles is a division of Wesfarmers, an ASX-listed company.

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