Gourmet Food's Receiver Blames PL Deals For Collapse

The receiver of the Gourmet Food Group has claimed that agreements with Woolworths and Coles superma…

The receiver of the Gourmet Food Group has claimed that agreements with Woolworths and Coles supermarkets played key role in the Australian company's collapse. The Gourmet Food Group is the maker of Rosella Tomato Sauce and Waterwheel Biscuits; they fell into receivership in 2012, before parts of the business were sold off in 2013.

The implosion of the company came less than a year after a competition watchdog alleged that Coles began a campaign to boost its pre-tax earnings by as much as A$30 million by demanding payments from 200 suppliers - including Waterwheel.

The campaign is now part of Federal Court proceedings which are being carried out by the Australian Competition and Consumer Commission against the supermarket chain over alleged "unconscionable behaviour."

Jim Sarantinos, a partner at Ferrier Hodgson, opined that the demands of both supermarket chains through rebates contributed greatly to Gourmet's unhealthy financial state. He said any further rebate would impact the business hard:

"Coles and Woolworths had a target they wanted to reach in regards to private label products, which are obviously sold at a significant discount to branded products like Rosella.

"The problem that Rosella had was that it didn't necessarily have the financial resources to make the changes that were required to counter that move."