Coles denies suppliers pay price for evading promotions

Supermarket giant Coles has dismissed suggestions of "repercussions" for suppliers refusing to take part in the company's promotions at an inquiry probing claims of anti-competitive conduct in the grocery sector.

The Australian Competition and Consumer Commission inquiry, requested by the federal government in January, is looking into the pricing practices of supermarkets and the relationship between wholesale and retail prices.

Its final report is due in February, months out from an election due by May.

A key issue is the relationship between supermarket giants Coles and Woolworths and their thousands of suppliers of items such as fresh produce, meat and packaged goods.

Coles sought to compel some suppliers to pay to promote their products, but commercial officer Anna Croft told the inquiry on Friday there were no consequences for those that did not agree to the terms.

"It's entirely optional for a supplier," she said.

At an earlier hearing, the supermarket's chief executive Leah Weckert mentioned an option for suppliers - a "one-stop media solution".

Coles 360 helps the supermarket and the brands it stocks "connect with customers at every turn of their lives", using shopper data to maximise those connections, the company told suppliers in July.

Its growth was among significant contributors to additional margins improving the company's bottom line, Ms Weckert told the inquiry.

Other hearings involved executives from Woolworths rejecting using the grocery giant's power to get the upper hand in bargaining with fruit and vegetable suppliers, who had other options.

"We provide the opportunity for fruit and vegetable suppliers to be able to access 20 per cent of total release of supply, which (leaves) 80 per cent of opportunity across a number of other retailers and wholesale markets," chief executive Amanda Bardwell said.

She acknowledged Woolworths was a "substantial part of the market" but listed 44 competitors including newsagents, home-delivered meal kit providers and the Cheesecake Shop.

Coles and Woolworths represent two-thirds of the grocery market in Australia but have not been the only ones to face the inquiry.

Metcash, which supplies about 70 per cent of the groceries found at independent grocers under the IGA banner, said there was an expectation for stores to implement agreed-upon promotions.

Many of them are also expected to buy from Metcash as long as the price is competitive.

Aldi is another option for shoppers but it could be denied entry to markets in some parts of the nation.

Representatives told the inquiry the chain was focused on attracting more shoppers to existing stores over opening new locations, and expanding into Darwin or Tasmania had been rejected as commercially unviable.