The Commerce Commission has said it will not pursue an investigation into Sanitarium following a complaint about the company's decision to withdraw supply of Weet-Bix from The Warehouse last year.
Sanitarium backtracked after it withdrew supply of the breakfast staple from The Warehouse shelves last October, prompting public outcry.
The product was being sold for $6 — a substantially cheaper price than any other supermarket.
In a statement to 1News, the Commerce Commission said it was "not clear that Sanitarium's conduct amounted to a breach of the Commerce Act" and that it would not "prioritise the matter for further investigation".
"We have no evidence to suggest that the conduct was undertaken for the purpose of substantially lessening competition," it said.
"We consider that it is unlikely that the conduct had or is likely to have the effect or likely effect of substantially lessening competition. In particular, the conduct was short in duration, with Sanitarium confirming that it would recommence supply within two working days of supply ceasing," it said.
The Warehouse Group chief executive Nick Grayston told 1News he was "very disappointed" not to see stronger action from the Commerce Commission.
"As you'll have seen from what happened with Weet-Bix, when we've tried to keep prices low we've been put under pressure from suppliers and God knows what's behind that but…[we're] very disappointed not to see stronger action on that from the Commerce Commission".
Grayston said the voluntary wholesale regime was "not making any difference" and that there didn't seem to be much political will from the Grocery Commissioner or the Government.
"They recognise that there's abnormal profits going on in that sector, there's the same scandal going on in Australia, but we want to be able to buy goods at the same price that our competitors can so that we can retail them at a lesser margin and give people good value," he said.
When asked what his relationship was like with Sanitarium now, Grayston said: "Well, it's functional."
"I would say they are supplying us and we are paying for the goods that we supply... I'm sure they're not happy that we've called them out."
'Public anger forced the supplier to backtrack'
Grocery Action Group — a group set up to improve supermarket competition — described the Commerce Commission's decision not to investigate Sanitarium as "astonishing".
"Even if it could not identify a specific offence, this was a perfect opportunity for the Commission to highlight the fact that resale price maintenance, and commercial bullying to force selling prices upward, are unacceptable and illegal," said interim secretary Ernie Newman.
"It's explanation that 'the conduct was short in duration' is absurd. It was public anger that forced the supplier to backtrack — that outcome is no credit to the Commission," he said.
He said this incident is a "major disappointment" and questioned what it would take for the well-resourced Grocery Commissioner to get involved.
"We call on the Commerce Commission to revisit its decision and if not, issue a public explanation as to why such an apparently blatant case of unfair practice has been allowed to go unpunished."
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