Woolies sticks by kickback butcher
Rebecca Urban
January 15, 2007
AUSTRALIA'S largest supermarket chain, Woolworths, has defended its
relationship with a controversial meat supplier at the centre of a kickback
scandal that has severely embarrassed rival Coles.
Woolworths, which trades under the name Safeway in Victoria, plans to stand
by meat processor Tasman Group, despite its link to an inappropriate property
deal that led to the sacking of a senior Coles executive.
Coles's head of supermarket merchandising, Peter Scott, was fired late last
year after the board learned that he had acquired a million-dollar bayside
apartment from Tasman chairman Giuseppe Catalfamo.
The deal - and Mr Scott's relationship with Mr Catalfamo - was considered a
breach of the retailer's code of conduct given Tasman is Coles's main supplier
of beef in Victoria and Tasmania.
And while Coles is now reviewing arrangements with Tasman, which has
reported annual sales of $358 million, a spokeswoman for Woolworths said the
company had "no issues" with the supplier.
"We're very comfortable with our relationship and the contract with
them," said Woolworths's media manager, Clare Buchanan.
Tasman, through its Devonport abattoir, provides Woolworths with fresh
sausages for 29 Tasmanian stores. It is in the middle of a $20 million upgrade
of its Longford meatworks, which will house a new sausage processing room
specifically to service Woolworths.
The supermarket giant's commitment to the company comes as industry sources
claim that the Tasman meat business is on the market, with Mr Catalfamo and
his partners looking to attract a buyer or new investor.
According to the Tasman Group's latest financial report, sales jumped 30
per cent in 2005. Profit, however, almost halved to $6.3 million. The
company's borrowings total nearly $62 million, with National Australia Bank,
ANZ and the Japanese meat company Hannan Corporation among the creditors.
Mr Catalfamo, a meat industry veteran, has admitted to paying bribes in the
past.
He received a 12-month good behaviour bond, was fined and banned from
exporting to the United States for 10 years over his role in the horse-meat
substitution scandal that threatened Australia's export industry more than 20
years ago.
Ms Buchanan declined to comment on whether Woolworths had carried out an
internal investigation to ensure staff were not involved in any inappropriate
dealings with Tasman, or other suppliers.
"That's not something I would want to go into, regarding what we have
or haven't done and at what level," she said.
"All I can say is that staff work within a strict code of
conduct."
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