January 11, 2007

Australia's Coles calls for tenders
 

Australia's Coles Group continues to distance itself from a controversial meat supplier embroiled in a damaging kickback scandal, inviting beef producers from across the country to tender for contracts.

Two months after Coles fired senior executive Peter Scott over his relationship with suppliers as well as several lucrative cost-plus contracts he established with meat-processing companies while he was in charge of the supermarket's perishable foods division, the supermarket chain has introduced a new tender process for purchasing beef.

Under the new system, some 50 beef producers, many of which had previously been shut down by Australia's second largest retailer, would be invited to submit weekly offers for the provision of boxed beef.

It follows Coles's recent decision to stop buying extra lambs through Tasman abattoirs, a controversial arrangement established by Scott. And while Tasman, which kills and processes about 4,000 cattle a week for Coles, remains the supermarkets' main supplier in Victoria, its contract is under review.

Coles has hired Pinkerton, the world's largest investigation and risk management company, to investigate allegations of misconduct and kickbacks within the division.

Contracts with the Tasman Group, as well as Queensland beef provider Australian Country Choice and Primo Smallgoods, are being reviewed as part of the investigation

Apparently, a beef producer claimed to have been told by a Coles manager that he would have to consider a joint venture with the Tasman Group if he were to have any hope of supplying his product to the supermarket.