Jump to navigation
Jump to search
WOOLWORTHS, Australia’s largest retailer, quietly sacked two senior managers over their roles in the disappearance of millions of dollars worth of meat from its Safeway stores in Victoria.
A former manager at a Woolworths-owned meat processing plant, Kenneth Gibbins, was dismissed when his secret financial interest in a company implicated in the scam was exposed.
And senior Victorian livestock buyer William Fairfull was sacked over his failure to account properly for and report the disappearance of thousands of kilograms of meat trims.
He was later sued for negligence and misleading and deceptive conduct by Woolworths, owner of Safeway, in a civil court action in the Federal Court of Australia in 2001.
The extent of Woolworths’ problems in its meat division comes to light as the board of rival supermarket operator Coles Group considers referring a senior executive sacked over an inappropriate relationship with a supplier to police for further investigation.
Peter Scott, who had worked for the retailer for 30 years, acquired a million-dollar penthouse — mortgage-free — from the owner of one of Coles’ main beef suppliers, the Tasman Group.
Coles and Woolworths have strict codes of conduct governing employees’ conduct with suppliers.
The receipt of gifts or cash from suppliers is, in most cases, banned.
Woolworths’ concerns date back at least to 2000, when a Victorian and Queensland police investigation cracked a five-year scam that involved the illegal removal of tonnes of Safeway meat from Scoresby Transport, a company Woolworths contracted to store and on-sell the products.
While three people were charged — Scoresby Transport general manager Douglas Sutton, and East Coast Meats International directors Alan Blair and Andrew Delroy — the case was dismissed two years ago due to lack of evidence.
Instead, Safeway launched civil proceedings against the three men, East Coast Meats, a related company called JBD Enterprises and several others believed to be responsible for the missing meat.
The retailer alleged their actions lost the company $1.4 million.
A statement of claim lodged with the Federal Court in NSW alleged that Scoresby Transport failed to record its receipt of 750,000 kilograms of Safeway meat — typically off-cuts used to make sausages and meat pies — from the abattoirs.
The supermarket claimed Mr Sutton destroyed any records pointing to the meat’s existence and then sold it to East Coast Meats and other wholesalers at below-market rates between 1996 and 2000.
Mr Fairfull, who had been Safeway’s category manager of livestock since 1995, was brought into the court action in 2003.
An amended statement of claim alleges he failed to keep track of documents recording the movement of Safeway’s meat between the abattoirs and Scoresby facilities, and failed to investigate discrepancies or irregularities.
However, a court order dated March 11, 2005, records a judgement in Safeway’s favour against Mr Fairfull for $1.2 million plus $710,000 interest.
The case was eventually settled out of court for an undisclosed sum early last year.
Woolworths communications manager Clare Buchanan said neither Mr Fairfull nor Mr Gibbins, who were both sacked around 2000, were considered by police to have acted illegally.
Australian Securities and Investments Commission records show Mr Gibbins was a director and shareholder of Brisbane-based JBD, the company alleged to have received the missing Safeway meat. Mr Gibbins is believed to have had a minor interest in that company while he was in a management role with Woolworths’ meat-processing division, Chisholm Manufacturing.
“Disclosure of any potential conflict of interest is mandatory within our code of conduct and he was immediately dismissed for this breach,” Ms Buchanan said.
Woolworths chief executive Michael Luscombe told The Age last week he was unaware of any current issues in the company’s meat department.
However, Woolworths has committed to continuing its business relationship with the Tasman Group, which provides sausages, despite its link to the Coles scandal.
Coles chief executive John Fletcher is yet to comment publicly on the investigation into Mr Scott and a continuing probe into wider practices within its troubled meat department.
The Australian Shareholders Association has urged both retailers to hold detailed investigations into the buying practices in all their perishable food divisions in light of the Coles scandal.
Rebecca Urban
The Age
February 8, 2007