Franklins has urged Metcash to reveal the discounts that it hasn’t passed on to the supermarket chain, the total value of those discounts and to allow full inspection of its records.

This follows the decision on 16 December by the NSW Court of Appeal that Metcash does not have the right to withhold certain discounts and rebates it negotiated with suppliers on Franklins’ volumes.

Metcash has now acknowledged that it owes Franklins money. Why has it taken them so long to come clean? asked managing director of Franklins, Aubrey Zelinsky. Metcash must have known that it negotiated discounts with suppliers that it unlawfully withheld from Franklins. Unfortunately, it has taken a unanimous Court decision to spur Metcash into action.

In an affidavit filed with the Court, an independent forensic accountant from Deloitte concluded that there is a strong possibility that in respect to at least some of the suppliers, there is an inconsistency between the description or classification of the discount on the face of the trading terms … and the actual benefit or service provided and there would appear to be no uniform practice in relation to the description or recording of the types of discounts negotiated between Metcash and particular suppliers.

Zelinsky said that, the value of the discounts that Metcash has retained, and to which Franklins is entitled, is significant because the supermarket chain had ordered close to $2 billion of goods from them.