Good morning, everyone. It is my pleasure to welcome you to Coles' 2026 Annual General Meeting. My name is Daniella Pereira, and I am the Group Company Secretary. On behalf of Coles, I would also like to acknowledge the Wurundjeri Woi Wurrung people of the Kulin Nation as the traditional custodians of the land. I pay my respects to elders past and present, and extend that respect to Aboriginal and Torres Strait Islander peoples joining us today. For those online, I also acknowledge the traditional custodians of the land from where you join us. A few housekeeping matters to begin with. As a courtesy, could you please ensure your mobile phones are silenced? In the event of an emergency, an evacuation will be announced over the PA system with further instructions to follow from the MCEC staff.
Before we move to formalities, we will play a short video outlining the procedures for asking questions and voting during today's hybrid meeting.
This video explains how to ask a question and vote at today's meeting. Shareholders, proxy holders, attorneys, and corporate representatives may ask a question and vote in person or using the online platform. The chairman will address questions relating to a particular item of business during discussion on that item. If you are attending online, we encourage you to submit written questions at any time from now. For those attending in person today, if you hold a handset or a yellow or red card, you may ask a question. If you hold a white card, you are a visitor, and you are welcome to attend, but you will not be able to speak or vote. During the discussion on a particular item of business, if you have a question relating to that item, please move to a microphone, give your name, and show your handset or yellow or red card.
If you are not attending in your personal capacity, please also state your affiliation. Your name will be announced to the meeting. If you are unable to make your way to a microphone, please raise your hand, and a microphone will be brought to you. For those joining the meeting online, to ask a written question, click on the Messaging tab, select the category of your question, type your question, and click Send to submit. You can view your questions under My Messages. To ask a live audio question, click on the Request to Speak button. This will pause the broadcast. Enter the topic of your question and click Submit Request. Please then click Join Queue and follow the instructions to test your microphone. Once you have tested your microphone, you will be able to hear but not see the meeting.
When it is your turn to speak, the moderator will introduce you, and you will hear a beep. Please then ask your question. All questions at the meeting must relate to an item of business and the company as a whole. If a question has already been asked, please don't ask it again. To give all shareholders a reasonable opportunity to be heard, please ask no more than two questions or make two comments initially. If we receive a number of similar online questions, we may need to answer them collectively. We may also need to summarize questions in the interest of time. If your question is of a personal nature relating to your shopping experience at any Coles Group business, please visit the booth in the foyer, where the attendants will be delighted to assist you.
Our executive leadership team will also be available in the foyer following the meeting to answer your questions. For questions relating to your personal shareholdings, please make your way to a Computershare attendant. If you are attending the meeting online, please contact our customer care number or the Computershare registry number shown on the screen. Moving on to voting. For those attending in person, if you hold a handset or a red voting card, you may vote. This handset should have a white plastic card inserted and should display your name, the resolutions, and voting options. To vote on the first resolution, press the green square button to vote for the resolution, press the red triangle button to vote against the resolution, or press the blue trackball to abstain. There is no Enter button. Once you have entered your vote, use the blue trackball to scroll to the next resolution.
You can change your vote up until the chairman closes the poll. Simply move the trackball to the relevant resolution and re-enter your vote. The final selection on your device at the close of polling will be counted as your vote. Please return the handset to an assistant when you leave the meeting. For those voting online, click the Voting tab to display the resolutions. To submit your vote on each resolution, select either For, Against, or Abstain. The selected option will change color. Your selection is automatically recorded, and there is no Submit or Send button. You can change your vote up until the chairman closes the poll. Detailed instructions on how to use the online platform are set out in the online meeting guide available on our Annual General Meeting webpage or under the Documents tab on the Lumi platform.
If you have any technical issues, please call Lumi using the phone number shown on the screen. You can also find the number on the homepage of the platform. Thank you.
I hope that video was useful. If you require assistance with your handset or have any questions on the procedures for the meeting, please raise your hand, and one of our attendants will assist you. As noted in the video, we encourage online attendees to please submit your written questions anytime from now. The Chairman will address questions relating to a particular item of business during discussion of that item. Please submit your written questions in good time to ensure they can be considered at the relevant item. It is now my pleasure to introduce our Chairman, Peter Allen.
Thank you, Daniella. Good morning, everyone, and welcome to our 2026 Annual General Meeting. Thank you for joining us here in the room as well as online, and for your continued investment in Coles. I would also like to acknowledge the traditional owners of the lands on which we meet today, the Wurundjeri Woi Wurrung people of the Kulin Nation, and pay my respects to elders past and present. As we have a quorum, I now declare the meeting open, and I would like to start by introducing my fellow board colleagues. Starting from my far left, Abi Cleland, Scott Price, Leah Weckert, our Managing Director and Chief Executive Officer, Daniella Pereira, our Company Secretary, who you have met already, Richard Freudenstein, our Chairman of the People and Culture Committee, Jacqueline Chow, Andy Penn, our Chairman of Audit and Risk Committee, and Wendy Stops.
Wendy is retiring as a Director of Coles at the end of today's meeting. I will make some further remarks about Wendy in my address. At the front of the meeting are members of the executive leadership team, together with David Shewring from the company's auditor, Ernst & Young. A notice of meeting has been distributed, and I take it as read. Voting on all resolutions will be by way of a poll, and I now declare the poll open. The poll will remain open until the end of the meeting. Michael Stratton of Computershare will act as the Returning Officer for the poll and will oversee the counting of the votes. The final results will be made available after the meeting to the ASX and on our website. I will now move to the formal part of the meeting.
Coles has been a part of Australian life for more than a century. Today, we serve millions of Australians each week through more than 1,800 supermarkets and liquor stores, and our online businesses. We employ more than 115,000 people and work with more than 8,000 suppliers, and we are owned by around 400,000 shareholders. The scale, our connection to communities across the country, is one of Coles' great strengths and stands us in good stead in a complex external environment. Households remain cautious after years of cost of living pressures, while geopolitical tensions are increasing costs and supply chain uncertainty. In this environment, delivering value for customers remains more important than ever. But value is not about shelf price.
It is also about availability, the quality and functionality of products, and the convenience of our offer, all of which depend on efficient operations, a resilient supply chain, effective use of technology, and disciplined investment. This is where Coles' scale can deliver enormous value to all Australians. It enables us to invest in the long term in our stores, supply chain, technology, and people, build enduring relationships with farmers, producers, and suppliers. When we find better ways to operate, we can apply them across our network, helping lower costs, improve availability, and deliver better value. Together, these strengths support a more productive and resilient Coles, with the capacity to keep investing for customers while generating sustainable returns for you, our shareholders. Against this backdrop, we delivered another solid year of financial performance.
Group sales grew to AUD 45.6 billion, and group net profit after tax, excluding significant items, grew 13.7% to AUD 1.26 billion. The board declared a fully franked dividend of AUD 0.78 per share for the year, an increase on FY 2025, with AUD 979 million paid back to shareholders this financial year. These results reflect the disciplined execution of our strategy and the commitment of our people. They also reflect investments made over many years to strengthen Coles. We have modernised our supply chain through our Automated Distribution Centres and Customer Fulfillment Centres. We have continued to invest in our store network and digital capabilities, and we are making greater use of technology, data, and artificial intelligence across the business. These investments are improving the way Coles operates today while building capabilities for the future. Retail is changing.
Customers expect better value, greater convenience, and more choice, while technology, global events, and an evolving competitive and regulatory environment continue to reshape our industry. Your board believes Coles is well-positioned. We have a strong balance sheet, significant investments in world-leading infrastructure and technology, an extensive store network, trusted supplier relationships, and a strong team serving our customers every day. Our focus is on making the most of these strengths by continuing to improve productivity and efficiency, investing where we see opportunities to create sustainable long-term value, and remaining disciplined in how we allocate your capital. The strength of our balance sheet gives us considerable flexibility. We have a clear investment framework and rigorous return hurdles, and we regularly assess our capital management options to ensure capital is deployed in the best interests of shareholders.
Ultimately, it is about striking the right balance between investing in the business to support sustainable growth and returning capital to shareholders where that is the best use of funds. Building a strong, long-term sustainable business extends to environmental impact of our operations. We maintained 100% renewable electricity for our operations. Our combined scope one and two greenhouse gas emissions were 82.6% below our FY 2020 baseline, ahead of our FY 2030 target. We also released our first Climate Transition Plan and mandatory climate-related financial disclosures. Across our operations, 88.2% of solid waste was diverted from landfill. Packaging is another important area of our sustainability agenda. It performs an important role. It protects products, supports food safety and quality, can extend shelf life, and helps reduce food waste. Our approach, set out in the sustainability strategy and R3 Packaging Framework, is aligned with the National Packaging Targets. We have made good progress.
In FY 2026, more than 87% of eligible packaging was recyclable, exceeding our FY 2030 target. Recycled content in eligible packaging reached 28.1%. Since 2021, our initiatives have also removed more than 700 million pieces of plastic packaging from our Coles Own Brand range alone. There is, however, more to do. Importantly, we look at the overall environmental outcome of the choices we make, rather than any one measure in isolation. Reducing plastic in packaging is important, but changes must also take account of food safety, product quality, food waste, affordability, and the availability and environmental impact of alternative materials. We also support stronger and nationally consistent packaging regulation, alongside the investment in collection and processing infrastructure needed to improve circularity across Australia. We will continue to review our disclosures so shareholders have meaningful information with which to assess our progress.
During the year, the Federal Court delivered judgments in two significant historical matters involving Coles. The first was the matter brought by the Fair Work Ombudsman concerning historical pay arrangements for award-covered salaried team members. This matter remains before the court, and we will keep shareholders informed. Coles has previously apologized to affected team members and undertaken remediation as per our previous disclosures. The second related to the ACCC proceedings concerning historical promotional pricing between 2022 and 2023 for the Down Down Specials program. The court found that the underlying price increases reflected supplier cost increases and were therefore commercially justified. However, it found that for most of the products considered, the higher price had not been in place for long enough before the product was promoted under Down Down.
While there are no prior price establishment guidelines and no deliberate intention to mislead customers, the judge determined that 12 weeks price establishment was appropriate for this type of campaign, and therefore found against Coles. This matter remains before the courts. Your board and management take these matters seriously. We considered both proceedings when determining FY 2026 executive remuneration. Adjustments were made to reflect the executive's accountability for the areas that they oversee, not for any finding of individual misconduct. More broadly, there have been significant changes to the regulatory framework applying to the grocery sector. These include Australia's mandatory merger control regime and the excessive pricing prohibition for large supermarket retailers, which was introduced as an election promise, not because there is any evidence of excessive pricing. Coles supports regulation that protects consumers, promotes effective competition, and supports investment and productivity.
We also recognise the responsibilities that come with our scale and position in the Australian grocery market. At the same time, regulation needs to be clear, proportionate, and practical. Poorly designed or unnecessary complex regulation can add costs, discourage investment, and reduce productivity, outcomes that can ultimately put upward pressure on grocery prices for customers. Now turning to the board. As I mentioned earlier, at the conclusion of today's AGM, Wendy Stops will retire as a non-executive director of Coles. On behalf of the board, I would like to acknowledge and thank Wendy for her significant contribution to Coles. Wendy joined the board in November 2018 and has served as a member of both the Audit and Risk Committee and the Nomination Committee. Wendy, your thoughtful judgment, valuable insights, and strong commitment to governance have been greatly valued by your fellow directors and by Coles more broadly.
We thank you for your dedicated service and contribution over the past eight years, and we wish you every success and all the very best for the future. Thank you. The board remains focused on maintaining a balanced mix of skills, experience, and perspectives, and we continue to explore opportunities to bring additional skills and experience to the board. I thank my fellow directors for their contribution and commitment throughout the year. As we look ahead, our priorities remain clear. We remain focused on delivering value, quality, and convenience for our customers, investing in our people, stores, supply chain, and technology, and maintaining disciplined capital allocation to support long-term growth. Coles has served Australians for more than a century. Our responsibility is to build on that legacy and ensure that business remains strong for generations to come.
Before I finish, I want to acknowledge the more than 115,000 members of the Coles team. Across our stores, distribution centres, online operations, and support functions, their contribution enables us to serve millions of Australians each week. On behalf of the board, thank you. I also like to thank our farmers, suppliers, and our other partners for their contribution and continued support. To you, our shareholders, thank you for your investment in Coles and for the trust that you place in the board. I'd now like to invite our CEO, Leah Weckert, to address the meeting. Thank you.
Thank you, Peter Allen. It is my pleasure to welcome you all to our 2026 Annual General Meeting, including a number of the Coles family that we have with us today. FY 2026 has been another strong year for Coles. We gained market share in supermarkets, improved the experience for our customers, grew our digital business, and delivered earnings growth. For our customers, cost of living remains front of mind. We know Australians continue to make careful choices about where their household budgets go. Our research tells us that customers are shopping around at multiple retailers, trading into more affordable products, and seeking out specials and discounts. Our focus, therefore, has remained on helping customers get better value from their weekly shop. Across FY 2026, Coles Supermarket inflation, excluding tobacco, remained at 1.2%, unchanged from the previous year. We have strengthened our everyday value offer while continuing to provide thousands of weekly specials.
Today, customers can find more than 4,200 everyday value products across our stores. At the same time, we are increasingly using Flybuys and digital technology to provide customers with relevant, value-driven offers. Our Exclusive to Coles range also continues to resonate strongly with customers, offering distinctive products, quality, and choice across a range of price points. Sales grew 6.1% in FY 2026, with Coles Finest growing 9.2%. During the year, we invested in Coles Simply, our value range, by refining the range and investing in prices. We also received 40 awards for our Exclusive to Coles products, including 17 Product of the Year awards, and we introduced exciting new partnerships, including M&S, Grill'd, and Gami. With value being front of mind for customers, collectible campaigns continue to resonate strongly.
We have delighted customers over the last 12 months with a range of high-quality kitchen and dining essentials, including the current Curtis Stone cookware. It is clear that children's collectibles are also very popular. There have been improvements in recyclability and plastic content since we last ran a campaign, and as customer perceptions change around these issues, we are looking forward to opportunities to surprise and delight in this space. One of the highlights of FY 2026 was improvements in customer satisfaction across all of our key measures, from quality, range, and price, to availability and the look and feel of our stores. Australians are also becoming more and more digitally engaged, and we continue to meet customers where and how they choose to shop. In FY 2026, Supermarkets eCommerce sales increased by 26.4% to AUD 5.6 billion, and it now represents 13.6% of our supermarket sales.
Our Customer Fulfilment Centres performed particularly well in their second year of operation. We expanded catchment areas, began same-day delivery, and introduced new automation. Pleasingly, our CFCs were EBITDA positive for the past financial year, and customer satisfaction was the highest of all of our channels. Our partnership with Uber Eats is also providing customers with access to around 17,000 products on demand, while improvements to click and collect, our app, and personalised offers are making shopping with Coles simpler and more convenient. While digital is growing rapidly, our stores remain at the heart of how we serve Australians. We opened 13 new supermarkets and completed 71 renewals in FY 2026, and we are now accelerating that investment.
Over FY 2027 and FY 2028, we expect to open approximately 45 new supermarkets in established communities and high-growth corridors around Australia, and we will also renew approximately 150 existing stores and invest in priority technology. This will bring Coles closer to more customers, improve the shopping experience in our existing stores, and provide greater capacity for our growing online business. Of course, stores, technology, and automation only deliver their potential because of our people. Coles is one of the largest private sector employers in Australia, and our more than 115,000 team members bring an extraordinary diversity of backgrounds, experiences, and skills to our business. Many are also the face of Coles in their local community. Whether they are serving customers in a supermarket in regional Australia, moving products through our supply chain, working in a Liquorland, or supporting stores behind the scenes, their contribution matters.
Pleasingly, we made encouraging progress on safety, with an 8.8% improvement on our final FY 2025 total recordable injury frequency rate. The safety of our frontline team members remains an absolute priority. We will continue investing in technology, training, store initiatives, and support, while working with industry and governments to help reduce violence and aggression towards retail workers. We have also seen considerable progress from governments, with some states and territories legislating and enacting workplace protection orders. We have also continued to strengthen diversity and inclusion across Coles. Women held 42.4% of leadership positions. We remain one of Australia's largest private sector employers of First Nations people, and for the second consecutive year, we achieved platinum status in the Australian Workplace Equality Index. We have also achieved our highest-ever mysay team member engagement score, maintaining our position in the top quartile relative to the Australian benchmark.
For our team, technology will play an increasingly important role in modern retail. During the year, we expanded the use of AI across Coles, including providing store support team members with access to ChatGPT Enterprise. Our ambition is for Coles to be a place where people feel safe, supported, and proud to come to work, and where they have the opportunity to build fulfilling careers. Our connection to the communities we serve is an important part of who we are at Coles. With the support of our team members, customers, and supplier partners, Coles contributed AUD 150 million in community support during FY 2026, and this included our partnerships with SecondBite and Foodbank. Similarly, in times of crisis, which this year has included natural disasters in Queensland and Victoria, Coles is proud to offer relief and support.
Strong relationships with our suppliers and Australian farmers also underpin the quality, range, and availability we offer customers every day. More than 97.5% of the fresh produce we source is grown in Australia, and 100% of our fresh beef, lamb, pork, chicken, and eggs. Many of our suppliers have partnered with us for decades, and we continue to work to ensure that those partnerships are sustainable longer term. In FY 2026, we awarded more than AUD 3.5 million in grants to Australian producers through the Coles Nurture Fund. That takes our support through the fund since 2015 to more than AUD 43 million across 127 Australian businesses, helping farmers and producers invest in innovation and sustainability. Our focus on the future extends right across the business. Over the past three years, we have completed a transformative investment program that has modernised our supply chain and significantly expanded our digital capabilities.
Two Automated Distribution Centres and two Customer Fulfillment Centres are now fully operational and delivering positive results. The construction of the external structure of our third automated distribution centre here in Victoria is now complete, with automation equipment now in the process of being installed. Once operational, it will have a capacity to process 4.6 million cartons each week, around 15% more than our New South Wales and Queensland facilities, and will integrate into our existing supply chain in South Australia and Western Australia, enabling improved availability for customers in those states. In liquor, the operating environment is challenging, but we saw encouraging progress in our convenience portfolio and a significant improvement in customer satisfaction following the completion of our Simply Liquorland program, which brought all of our liquor stores under the Liquorland banner.
We have commenced a multi-year program to strengthen the liquor business by creating a more integrated food and drink experience, increasing our focus on supermarket co-locations, and simplifying the operating model. We opened 16 new co-located liquor stores during FY 2026, and we expect to open another 20 in FY 2027. I will now comment briefly on our financial results. In FY 2026, we delivered another strong year, achieving above-market sales growth and robust earnings growth despite a challenging operating environment. Supermarkets delivered solid growth, with sales revenue increasing 5.1% on the prior year, excluding tobacco, and was bolstered by a standout year for e-commerce, as I mentioned earlier. Supermarkets' EBIT grew 12.2%, and we demonstrated cost discipline by delivering AUD 311 million of savings through our Simplify and Save to Invest program. Turning to FY 2027, last week, we reported growth in our first quarter of 2.2% in group sales revenue to AUD 11.2 billion.
In a competitive market, we achieved supermarket sales growth of 3.6%. This was bolstered by strong growth in Coles Supermarkets' eCommerce of 22.9% and online sales penetration reaching 15.7% of our sales. In liquor, our convenience portfolio remained in positive growth, and we saw a moderation in overall sales decline to 1.3%. Our strategy, launched in 2023, has served us well over the last three years, and we are very different and a stronger business as a result. Looking ahead, we continue to focus on creating a destination for food, drink, and everyday essentials, accelerating the business through our digital capabilities, and delivering consistently for the future by focusing on the quality of our network and leadership in our cost base. Before concluding, I want to acknowledge the extraordinary efforts of our team over the past 12 months.
They've tirelessly worked every day to look after our customers and one another, and I am immensely grateful for everything that they do. To our suppliers, farmers, producers, and community partners, thank you for your continued partnership. To our around 400,000 shareholders, thank you for your ongoing support. Finally, to our customers, thank you for your continued trust and for choosing Coles to serve you and your families every day. With the festive season fast approaching, our team members are once again preparing to help make Christmas special for millions of Australians. We have an incredible lineup of 370 Christmas products, with over 200 of them for AUD 10 or under. I hope you will all enjoy some this season, with my personal recommendations being our turkey crown and mince slice-inspired trifle. Thank you again for joining us today.
I hope you all have a wonderful Christmas and festive season. Before handing back to Peter, I would like to share our Christmas television advert, which showcases the beautiful produce and products that we're offering at Coles this festive season. Thank you.
Need a hand with the ham?
Nah, almost done.
A gift I am preparing for some Christmas sharing. But I pause because hanging my stocking, I can hear him knocking.
Hi.
You made your famous mince pies?
Are you bringing a present for me? Something pleasantly pleasant for me. That is just what I have been waiting for.
Samuel, that is lovely.
Thank you very much.
Yeah, very impressive.
Thank you.
You can cook now?
Yeah.
Hmm. Cheater.
I said, who's there? Who is it? Are you stopping, boy? Is that you, Santa Claus? That's him, all right.
I do not know about you, that makes me hungry. I am certainly looking forward to the festive season. Thank you, Leah, for your address. I now turn to the formal agenda items of the business at today's meeting. The Notice of Meeting sets out information regarding the items for consideration. I will introduce each item separately and then invite questions and comments for that item. Please ensure that your questions or comments are relevant to the resolution being considered and to all shareholders. For each item, I will first ask for questions from the room, and then we will turn to questions received via online platform, addressing written questions first and then audio questions. Jessica Tancred from our corporate affairs team will introduce the online questions. As set out in the Notice of Meeting, items two to five require a shareholder vote.
The board supports items two to five and recommends that shareholders vote in favour of these resolutions. Following discussions on each item, details of the proxies and direct votes received will be shown on the screen. I will then ask shareholders and proxy holders to vote on the item, noting that they have already voted already. As set out in the Notice of Meeting, I intend to vote all available undirected proxies held by me as the Chairman of the meeting in favour of items two to five. I now turn to the first item of business, which is to receive and consider the statutory reports of the company and its controlled entities and the reports of the Directors and auditor for the year ended 28th of June 2026. These reports are in the 2026 annual report available on our website.
While there is no requirement to put this item to a vote, this is an opportunity for shareholders to ask questions relating to these reports. Mr. David Shewring from EY is also available to answer questions regarding the audit. The text of this first item of business is now shown on the screen. I now invite any questions or comments from the room regarding the statutory reports.
What is your name, sorry?
We are just waiting for some names to be given. Okay, we will take microphone two. Thank you.
Mr. Chairman, I would like to introduce shareholder Mr. Michael Muntisov from the Australian Shareholders Association.
Thank you. Good morning, Michael.
Good morning. My name's Mike Muntisov . I am from the Australian Shareholders Association. The ASA advocates for increased transparency and fairness for ordinary shareholders. As you've both mentioned in your speeches, Coles has nearly 400,000 shareholders. I would like to thank you for making the time available to meet with us a couple of times during the year and also for continuing to adopt hybrid meetings for the AGM. I had a couple of questions, if I could. One relates to some recent news that a lot of people in the audience, I think, might have seen, that is the hacking of freezers in European supermarkets causing food spoilage. Interested to know what is Coles' exposure to this sort of hacking, and more broadly, has Coles updated its assessment of the risks to all of its systems that are connected to the cloud?
Yeah, thank you, Michael, that is a very apt question for today. Cybersecurity is one of those areas which is very important for Coles, not just from the protection of our equipment and food, et cetera, but also with regards to privacy of customer information. We have really a strong interest in focusing on not just the risk that we have as far as cybersecurity, but also the risk that our third-party suppliers have to cybersecurity. We make sure that we've got an incident preparedness. We work with our suppliers to ensure that they've got the right critical infrastructure and the right cybersecurity, I suppose, programs in place to be able to meet that demand and that risk. We continue to assess that risk at all times. Thank you.
Just on the freezers, are your freezers connected to the cloud?
Well, one of the beauties about technology is if you've got new technology, then everything's connected to the cloud. We're fortunate that at Coles, we don't have those freezers connected to the cloud. Thank you, Mike.
Okay, thank you. In financial year 2026, which we've heard about this morning, you grew revenue by about 2.8%, and earnings were up by about 10%, largely because of the Simplify and Save program. At the recent quarterly sales announcement, you showed a similar revenue increase, but you have guided to a flat earnings result for the half. Does that mean that the savings from the Simplify and Save program have now been fully realized, or are there other factors?
Michael, yeah, I think as was mentioned on the call for the first quarter operational results, the fact is that we are seeing additional pricing pressure, not just to ourselves, but also our suppliers, particularly with what's going on in the Middle East at present with regards to fuel, et cetera. With regards to our Simplify and Save to Invest, that program is continuing, and we're reaping the rewards out of that. That program's delivered over AUD 1 billion of savings over the last three years. What we'll be looking at doing when we look forward to the following three years is thinking about how do we think about that as a program going forward.
Because it is really important for us to ensure that our focus on delivering value to the customers, we are able to ensure that we are able to reinvest any of those savings into price for our customers.
Thank you.
Thank you, Michael. Microphone one, sorry.
Mr. Chairman, I would like to introduce shareholder, Ms. Adele Chasson.
Good morning.
Good morning, Chair. Good morning, everyone. My name is Adele. I have been a Coles customer for years, as long as I have lived in Australia. This year was special for both me and Coles. This year, I became an Australian citizen, and like many Australians, one of the things I love most about this country is its magnificent nature and unique wildlife. I am really worried about the deforestation crisis happening in Australia that is pushing iconic native animals towards extinction. It breaks my heart to know that if we do not act to end it now, many of the native animals we love most will go extinct within our lifetime. This year was also special because Coles made a commitment that from the start of 2026, the beef on the shelves would no longer be sourced from deforestation.
I was really excited to see Coles play their part to protect the unique nature that so many Australians like me care deeply about. Now it is almost 2027, and koalas are still losing their homes to bulldozers for beef pastures. Meanwhile, Coles has not cut ties with deforestation, making its commitment optional for its suppliers instead of taking proper action. It is almost 2027, and koalas cannot wait any longer. I really want to be able to shop at Coles knowing that the company is not bulldozing what I love most about Australia, its nature, but I cannot. My question is this: By what date will beef linked to deforestation be taken off the shelves at my local Coles? Thank you.
Adele, thank you very much for your statement as well as your question. Like you, we all share concerns about Australia's natural environment, and want to see that continue. When we look at what we set out in terms of our objectives a number of years ago, in terms of having no deforestation, we had five key resources that we were looking at. We had beef, we had palm oil, we had soy, we had timber, paper, and we had cocoa. We have made really great progress on three of those five, and with regards to soy, palm oil, and timber. I must say that what we have found is it has been a lot more complex than we anticipated with regards to beef as well as cocoa.
Now, cocoa is probably one where we anticipate things to probably be able to be achieved a little bit quicker, given the fact that the EU was setting out a standard, which was supposed to be in place at the end of last year, and now they have delayed that until the end of this year. Hopefully that continues, and that will give us a level of certainty in terms of how we source cocoa to be from no deforestation areas. As I mentioned, beef is very difficult. What we have with beef is we have quite a number of suppliers, with regards to our farmers, et cetera, as well as our abattoirs. What we have also seen is that complexity, we are able to go through to where we first get, where we get that initial consignment for, in terms of having that traceability.
But we cannot go further in tracing back in terms of where that livestock has come from previous months or years. That is the difficulty for us in terms of doing that. Now, we are working with the industry, we are working with the government, we are working with stakeholders to try and understand and get much better beef traceability. As a farmer, I know that every time I sell cattle or I sell a lamb, I have to sign an NVD, basically a declaration as a vendor in terms of where that product has come from and where I receive that product from. That is there for biosecurity. It is there for nothing else. I think hopefully we will be able to see an opportunity where this beef traceability will be able to get further down the track, and therefore be able to prove that.
But unfortunately, because of the complexity and also there are so many parties involved, it is very difficult for us to be able to give you a set date. My apologies for that. But we are working towards that.
So you are confirming that you are committed to achieving full traceability and making your commitment mandatory?
We're working with the industry to try and find out what the best way is in terms of giving you the commitment in terms of having for us to supply beef with no deforestation.
Thank you.
Thank you. Microphone number two.
Mr. Chairman, I would like to introduce shareholder Ms. Jess Coughlan from SIX.
I have traveled here from Tasmania, Lutruwita, and I am representing the SIX Coalition as well as Environment Tasmania, a coalition partner. I would like to just respond to one of the statements that you just made about how difficult it is to divert supply chains. I would like you to acknowledge the power that you have as a massive part of the duopoly in Australia. You can actually leverage your purchasing power to create the change. It does not have to be difficult. You actually have power to do that. in your sustainability report supplement, you acknowledge the environmental risks associated with salmon farming in Macquarie Harbour, including concerns about dissolved oxygen levels and the critically endangered Maugean skate. For anyone who is not aware of the Maugean skate, it is a 60 million-year-old animal that lives in only one place on Earth, in Macquarie Harbour on remote Tasmania's west coast.
It is a listed natural value of the Tasmanian Wilderness World Heritage Area of global significance. The animal is on the population cliff's edge, with only a limited number of skate left in the wild and only one successful juvenile cohort in the last 10 years. Of those juveniles, only one female was located, and the average age of the animals at the moment in the rest of the population is eight years old. The animal only lives for between eight and 12 years old. We are heading into a super El Niño event this summer, and conditions are likely to worsen in the harbour. It is a critical time for action on this issue. The causation of dissolved oxygen levels being so low in the harbour is the polluting Tasmanian salmon farming industry.
You also note in your report that 94% of Coles Atlantic salmon was sourced from Tasmania in financial year 2025. Despite acknowledging the risks in your report, Coles appears to rely on ongoing monitoring, certifications, and future reviews rather than committing to a measurable change from sourcing in Macquarie Harbour. Last year, a number of scientists were at the AGM, and they raised, independent scientists, and they raised their concerns about what is happening to the skate and the implication and the risk that you carry and pass on to your shareholders and consumers over this impending extinction event. You responded by saying if conditions worsened, you would take action. I am here to tell you today that conditions have worsened. You recognise that supply chain deforestation can create biodiversity risks, including threats to endangered species, and this recognition has led to risk mapping and sourcing rearrangements.
When it comes to palm oil, as you just stated, you have made concrete sourcing changes, citing environmental concerns in your palm oil supply chain following supply chain mapping and risk assessment in your 2026 report. We have not seen any evidence of that with regards to salmon sourced from Macquarie Harbour in Tasmania. So concerning is this issue that the EPA in Tasmania, the environmental regulator, has not renewed salmon farming licences that expired on the 30th of November last year. They have been in an expired condition for almost 12 months now, and that is because the decision is so difficult to make to justify continued salmon farming in that harbour that our very own regulator cannot be confident to make it. Yet you are confident selling it in your stores and pushing that risk onto your shareholders and consumers. What meaningful actions?
I'd like to acknowledge also that I do hear all the groans that you make every time an environmentalist stands up. If you are bored about it, then you should also challenge for action. What I am asking for is evidence of any meaningful action that you have taken in the last 12 months since we were last here.
Jess, thank you very much for your statement as well as your question. We want to make sure that we have got a great AGM meeting, so we have to show respect to everyone, and people are allowed to ask questions. I think in the instance of time, it would be good to try and shorten up some of those statements and questions into the future. We do take those concerns really seriously, and as you said, we improved our due diligence. I mentioned this at the last AGM. We improved the amount of due diligence which we do with regards to salmon farming in Macquarie Harbour and how we are sourcing our salmon. It is, as you said, independently certified, and it is EPA regulated, and that is not our responsibility in terms of the regulations. We have strengthened our due diligence.
We have met with the scientists, and we engaged with them. We have engaged with the regulators. We have engaged with SIX and the other environmental groups, and we have engaged with the suppliers to make sure that we have a full understanding in terms of any changes. At this point in time, the information which we are seeing and which I have received personally is that there is no change in terms of the deterioration, in terms of, number one, the number of escape. In fact, there is an improvement in terms of the re-oxygenation, in terms of what is being done by the salmon farmers in terms of putting oxygen around their salmon farms in Macquarie Harbour. We are going to continue to review the science. We are going to continue to make sure that we are doing the right thing.
As I mentioned last time, we see this as a responsibility that we have in terms of where we source our product. We want to have a sustainable product, and we want to make sure that we look after the environment. At this stage, we cannot do anything alone in terms of what you say. There is a need and a demand when we are trying to do that balance in terms of the demand of what our customers want in terms of fresh salmon, the availability of that fresh salmon. It will be very interesting to see what the independent review, which is being carried out presently on Tasmanian salmon, what that comes up with at the end of next year, I think.
The recent oxygenation data that was released just two months ago that covered the last 12 months showed a significant decline in oxygen right throughout the harbour, with average values falling below the default guidelines that had been set by scientists. This is published on the EPA website. This is the most recent and up-to-date science on that, and it is showing deterioration.
Well, then what I would suggest that you continue to have engagement with the EPA because they are the regulator with regards to salmon in the Macquarie Harbour.
Thank you.
Thank you.
Thanks, Jess. Microphone number one.
Mr. Chairman, I would like to introduce shareholder Mr. Adam Bandt from the Australian Conservation Foundation.
Morning, Adam.
Thank you. Thank you, Chair. Look, when they go to the supermarket, Australians want to know that the mince they are buying does not come from killing koalas. You referenced orangutan, you referenced palm oil before. I mean, people are generally aware of the situation with the destruction of orangutan forest in Indonesia. In Queensland, in one year, more habitat and forest was destroyed than the entire of Indonesia lost for palm oil. It is why we are facing a deforestation crisis here in Australia. I want to acknowledge and give credit where it is due for Coles’ forthrightness in acknowledging the barriers that you are facing to implement the commitments around only stocking deforestation-free beef, and it does stand in contrast to the confusing public messages that have been coming from Woolworths, and I want to acknowledge that.
I want to ask if today you can give the commitment that you will still be stocking deforestation-free beef in the future and that you will overcome the barriers that you have outlined. Can you give us a bit more information about the steps that you have taken? You referred to it before, but has Coles met the minister? Has Coles met suppliers? What, in fact, have you been pressing on them, and what are the next steps concretely to overcoming the barriers that you have outlined?
Yeah. Thanks for the statement. As I mentioned to the previous question, we have been working and found it a lot more complex than what we initially thought, to be quite honest. What we have done is we have been trying to focus much further down the supply chain than the place of last consignment, because it is really important to look back along the supply chain. So yes, we have spoken to the ministers, we have spoken to the industry, we have spoken to a number of NGOs, and we are really focusing on trying to identify at this point in time where those key risks are to really understand and make sure that our due diligence is on those areas where those key risks are. So we are working towards that with the industry, with the government, to try and get more detailed traceability.
Because yes, like you, we want to be in a position where we are able to supply beef where there has been no deforestation.
Can I just ask, just a follow-up, just on that point about going further down the supply chain.
Yes.
The overwhelming majority of farmers in Australia are doing the right thing, and there are some who are actively now trying to grow food in a way that restores nature and address the deforestation crisis and also produce great quality food. Can you give a commitment that you will use your power and your purchasing power to go and not just impose requirements, but to actively assist those farmers that are now actively trying to do the right thing and are perhaps facing barriers of their own?
We continue to do that, Adam, and I think that one of the things, and Leah mentioned in terms of the Coles Nurture Fund, in terms of the amount of money which we are also investing to be able to help support farmers and suppliers. It is difficult, and yes, we do have an ability to make sure that we try and source, and we can use our power to be able to do that in terms of meeting that demand. The key is also making sure that we meet the demand for beef as far as our customers are concerned. Yes, we are doing everything we can in terms of trying to achieve that.
Thank you.
Thank you, Adam. Microphone number two.
Mr. Chairman, I would like to introduce shareholder Ms. Jasmine Lapelle Irudussi from SIX.
Good morning, Chair. My name is Jasmine. I am here representing Neighbours of Fish Farming, a community-based organisation founded in Tasmania. Jess Coughlan just outlined the stakes in Macquarie Harbour, the last home of the endangered Maugean skate. But the impacts of industrial salmon farming do not stop at the harbour mouth. Coles took responsibly sourced off its farmed salmon packaging. The words came off the pack, the salmon stayed on the shelf. So did Tasmania's name. Think about what the name brings to mind. Wild coastlines, clear waters, and wildlife people travel there to see. Tasmania promotes those places to the world, and Coles uses this reputation to sell their salmon. Now picture what is happening in those same waters. Since Coles' last AGM, more than 16,900 tons of dead farm fish have been reported to Tasmania's EPA. Government wildlife records show 18 marine mammals.
These are our seals and dolphins that have died in interactions with salmon farms over the last two financial years. In 2025, Tasmania's salmon industry used 3,948 kg of antibiotics, around 22x more than in 2024, all to treat the consequences of having cold water fish in their continuously warming waters. These are industry-wide figures. They tell part of the story of what happens in the waters where Tasmanians live, fish, and swim. In CSIRO's survey of 931 Tasmanians participants, the authors said, "Salmon farming stood out as the only local industry posing both a significant threat and major concern." Chair, what is Coles' own threshold for environmental and animal harm, and why do you accept the numbers shared with you today, knowing that they will keep increasing as the waters warm?
Thank you, Jasmine, for your statement and your question. As I mentioned to the previous question in terms of, yes, we do take these very seriously, and we do make sure that we are looking at it in terms of the way that the industry is operated, in terms of dealing with not just the regulators, but also the suppliers. We have strengthened our due diligence that we have done in terms of Tasmanian salmon. We have worked harder with our scientists as well as the environmental groups, and as I have mentioned, with our suppliers. I think the key for us is that we are trying to manage an issue with regards to the demand that we see for Tasmanian salmon from our customers, the benefits of employment, et cetera, that the Tasmanian fishery business has in Tasmania, which the government is supportive of, as well as then also the environmental concerns.
As I said before, what we are doing is we are engaging with the scientists, we are engaging with our suppliers, we are engaging with the regulators. I think what we will be able to see is at the end of next year, hopefully, when the new report in terms of the independent study on Tasmanian salmon comes out, as you mentioned, it is not just Macquarie Harbour, it is all of Tasmania, that will give us much better understanding in terms of not just for ourselves, but also the regulators in terms of where the Tasmanian salmon industry should go.
Do you have a specific threshold that you set in place or?
A specific threshold into what, sorry, Jasmine?
For the environmental and animal harm.
Yeah, no, so we do not have a specific threshold in terms of environmental and animal harm. However, when we see instances of that, it is something which we bring up with our suppliers to try and understand what the issues are and how they are addressing that. Because, yeah, as a farmer, I do not like seeing mortality in terms of on my farm and my property, and we certainly do not like seeing mass mortality and also the impact in terms of other species, not just the salmon. So yes, we raise that with our suppliers and make sure that we try and understand and that our suppliers are working to be able to reduce that.
Thank you.
Thank you, Jasmine. Microphone number one. Thank you.
Mr. Chairman, I would like to introduce Mr. Howard Pascoe.
Good morning, Howard.
Good morning. Congratulations to the Chair and your board for another successful year. What a difference to when you started in Smith Street, Collingwood, with probably employing two people and now you are employing 115,000, whatever. So congratulations on another wonderful year. I am amazed that Four Corners, ABC's TV program, has not got onto this issue. I have a suggestion who should replace Wendy as your next board member. My question, in view of the cost of living, and a lot of Australians are running out of money according to financial reports, and the high interest rates that are now in vogue, there is a lot of people making it tough, is the definition of customer. Leah, you give me the impression that everyone is wonderful. I ask the question, what percentage of AUD 100 that I spend on groceries is making up for the theft that occurs in your stores?
In other words, would I be spending AUD 96 instead of AUD 100? Because of theft. Why I bring this up, Liquorland store within 3 km of here, the staff member told me every day one person comes, helps themself to a bottle of liquor, and walks out without being touched. But no security, and the security next door in the supermarket tells me he is there just for show. He might as well be a dummy. He is not allowed to touch the thief. The thief gets away with murder. Of course, we have a state election in Victoria that law and order is a huge issue. Your policy by the board goes right through the company. Your attitude to theft, where you got 4% or 5% of your customers are thieves, is like a wet lettuce. You have no backbone in dealing with theft.
The staff tell me, "We are not allowed to touch them." The security guy is too frightened to do anything. When you are all under CCTV, you have it on camera, but then the police do not do anything. It is going to get worse. I am suggesting to you, have a high-profile security person on your board, and what percentage of that AUD 100 am I going paying for those thieves that are making it more expensive for me to buy product?
Thank you, Howard. We agree that theft remains a really big issue, and we are making a lot of progress, particularly with investment in reducing stock loss. Unfortunately, we are also seeing it is not just individuals, but it is organised crime who is arranging individuals to be able to do that, and that is of real particular concern. You are correct that what we are using is we are using CCTV in identifying those people who are stealing from Coles. It is not shrinkage, that is stealing, that is theft, as you say. We are working with targeted measures in terms of working with the police to be able to ensure that where we see those identified, we can put things, in effect, wrapped up with string around it, to the police so that they can take action.
Unfortunately, what we are seeing is the Victorian state is not as strong as what we are seeing in other states. As Leah mentioned, we are looking at trying to get further workplace protection orders in place where we can ban those type of people or criminals from our stores. That is something which we are continuing to work with governments to be able to achieve that, and we are making some progress with regards to that. But in terms of our staff members, as Leah mentioned in her speech, the safety and security of our staff members is a priority for us. We do not want to put any of our staff members or any of our security guards in harm's way, unfortunately. That is why we are investing so much money in terms of deterrence. We are having body-worn cameras, et cetera. We have got CCTV.
We are making sure that people are aware that they are being watched in those high-profile areas. We are stopping the skip scan so that we try and reduce the amount. I cannot tell you what the cost is in terms of for overall cost, but what I can tell you is that based on the investment which we have been making over the last couple of years, that cost to the business is reducing.
Thank you.
Thank you, Howard. Oh, sorry, I keep forgetting. Microphone two.
Mr. Chairman, I would like to introduce shareholder Mr. Adam Verwey from SIX.
Morning, Adam.
Good morning, Chair. I'm Adam Verwey, CEO of SIX. We represent around 200 Coles shareholders. in 2024, we co-filed a resolution around Coles sourcing salmon from Macquarie Harbour. It won a historic 39% of the vote, the highest vote for a nature-based resolution anywhere in the world. In 2026, we chose not to file again at Coles. We did at Woolworths, and we challenged the re-election of the chair this year. We held back at Coles for one reason, which is because you told us and you told the market that you were acting on this issue that nearly 40% of your shareholders wanted action on, and we relied on those statements. You have acknowledged that salmon farming in Macquarie Harbour threatens the survival of the Maugean skate, and you rightly removed the responsibly sourced label from your salmon.
But the most important claim was that Coles was reducing its supply from the harbour. You made it again and again. In your 2024 sustainability report, your Chair and CEO said Coles had been steadily reducing its supply and that the transition would continue. Your 2025 sustainability report said Coles has reduced the volume of salmon taken from the harbour. You repeated it again at last year's AGM and in public statements as recently as April. Not once have you published a number. We have asked you for this information. You have not provided it. Last week at the Woolworths AGM, I announced that SIX had asked government regulators, ASIC and ACCC, to examine the conduct of both Woolworths and Coles on Macquarie Harbour salmon, and this includes Woolworths representatives telling us repeatedly over more than 15 months that they had had discussions with Coles representatives about Macquarie Harbour salmon.
Woolworths representatives also questioned whether Coles had really reduced its supply. I defended Coles. I said Coles would not make that statement to shareholders in reports signed off by its Chair and the CEO unless it were true. But others have since raised the same doubt. In October 2024, just after you first made the claim, the head of Salmon Tasmania said he was not aware of Coles reducing or canceling any supply contracts. Former staff members of Coles have told us that the claims of reduction are bogus. This includes former members of your seafood team who said there was no direction to suppliers to cut back on supply from Macquarie Harbour. If there was any reduction in supply, it was 0.001%, basically nothing. I have asked the regulators to investigate, but you can settle this here today.
My question to you, has Coles formally instructed its salmon suppliers to reduce supply from Macquarie Harbour, and by how much?
Adam, thanks for your statement and for your question. We do not go into giving particular category numbers in terms of lifecycle salmon, et cetera, because they are commercially in confidence. What I can say is that we also do not disclose how we manage those contracts. What I can say is that the statements which we have put out there are categorically true, that we have reduced the amount of salmon that we have taken out of Macquarie Harbour since 2023.
Have you given a direction to the suppliers to reduce the supply you get from Macquarie Harbour?
I am not going to talk about how we manage our supply contracts. I think it is commercial in confidence.
Well, the product statement suggests that you have. I guess the question is that true?
What I am saying to you is that we have reduced the amount of salmon that we have taken out of Macquarie Harbour, but I am not going to go into the details of how we manage our contracts with our suppliers.
Sure. Thank you.
Thank you, Adam. Oh, microphone number one.
Mr. Chairman, I would like to introduce Ms. Tara Jones from the Australian Marine Conservation Society.
Thank you, and good morning.
Good morning, Tara.
This year, 190 Coles Group shareholders supported a member statement highlighting the material risks associated with excessive disposable plastic packaging use. This statement urges Coles Group to prove where current plastic packaging is necessary, provide opportunities for online customers to opt out of plastic produce bags, and provide equitable access to loose fruit and vegetables. Coles' response to this statement focuses on recycling rather than the more effective measure of removing and reducing packaging. We see this in practice in Coles online orders. 95% of assessed orders from Coles arrived with excessive amounts of single-use plastic produce bags on its loose fruit and vegetables, compared to its largest competitor, where only 8% of orders arrived with plastic produce bags.
In addition, Coles customers are still paying more for loose fruit and vegetables compared to the same items pre-packaged, an action that unfairly penalises shoppers, particularly in a cost-of-living crisis, who choose to shop without packaging. In an incredibly welcomed move, Coles continues to spare families from bringing home pockets full of plastic junk by continuing its strong stand on not using plastic toys as promotional giveaways. Well done for that. Shareholders, shoppers, and wildlife need more than this. As a start, how will Coles deal with the large amount of unnecessary plastic packaging in your online orders?
Yeah, thank you very much for your comments, Tara. I think we really welcome the information that you've provided us with regards to the amount of packaging that is there. We have standards in place with regards to our online ordering, with the idea that we should only use plastic packaging, particularly for the protection of food and ensuring that basically food items don't get spread around the bags when they're being delivered, and there's some levels of protection. For example, bananas have a little bit of skin around them, so they should be just going in the bag by themselves. But tomatoes, who probably need a little bit more protection, and particularly individual tomatoes, they're in a bag to make sure that they arrive safely to the customer.
But we really welcome your insights, and it is something which we are looking at to review as we go through the opportunities to be able to improve our processes there. Thank you for that.
Thank you.
Microphone number two.
Mr. Chairman, I would like to introduce shareholder Mr. Adam Coffey from Cattle Australia.
Morning, Adam.
Morning. Thank you for your time. I do not want to add too much to the time being taken here, but I do have a very brief statement from the Australian beef cattle sector. I am a Director and Deputy Chair of Cattle Australia, which is the peak body for Australian beef cattle producers. We obviously actively engage with Coles regarding many matters, particularly over sustainability-related themes, including deforestation. I would like to just take the opportunity to acknowledge Coles and their ongoing engagement in working together and in considering more than 50,000 beef producers who actively manage over half the continent to feed millions of Australians each year.
Regarding traceability, despite the fact that our activist groups have done a pretty good job of confusing the issue, Australian beef cattle producers operate in one of the most highly regulated environments in the world regarding biodiversity protection and vegetation management, operating under at least 136 different state, territory, and federal vegetation management laws. Cattle Australia categorically does not support deforestation. What we do support is the ongoing right of landholders to undergo routine agricultural activities in accordance with state and federal regulations to ensure the ongoing prosperity of our country and the agricultural sector, and to maintain and grow our ability to be a world-leading supplier of sustainable beef. Australia has the seventh-largest forest area of any country on Earth, and over the decade from 2010 to 2020, the Food and Agriculture Organisation reported that we have the second-highest rate of reforestation of any country in the world.
This is an increase of 4.4 million hectares of forest area. These are not marginal statistics. They describe a continent-scale trend of expansion, not loss. Cattle Australia remains highly concerned that activist organisations continue to make not only misleading, but categorically false and damaging allegations against our beef cattle producers, and Australian consumers ought to be highly alarmed at the ongoing ideological attacks aimed at our industry and at our supply chain partners, such as Coles. I want to be very clear that remnant vegetation in Australia is protected, and that ongoing vegetation management is just that, routine agricultural activities to maintain the productive capacity of our land. These activities are not specific to the beef sector and are an integral part of agricultural land management as a whole.
The activist attacks undermine our reputation as some of the best beef producers and land managers in the world, and they are unfairly damaging Australia's ability to maintain its position as a supplier of quality product that millions of people depend on domestically and across the world. This risks raising the cost of food in Australia, and it also directly negatively impacts our food resilience. This is something that every consumer in Australia should be very concerned about and take very seriously. Personally, as a beef cattle producer within the Great Barrier Reef catchment in Queensland, I can assure you that the ongoing ecological health of our land is tied directly and profoundly to the ongoing economic viability of our business. Our gates are always open to those who want to come and see what we do and why we do it.
Queensland beef producers care deeply about their land and their waterways which run into the reef, and this is reflected in the fact that the reef's raw coral cover is the highest it has been in any of the preceding 35 years, according to the Australian Institute of Marine Science. Undoubtedly, our sector will continue to be targeted by our activist friends, perhaps even imminently. However, my message to the Coles board of directors and management is to reassure them that they ought to be proud of Australian beef cattle producers and our ongoing commitment to sound land management. Thank you.
Thank you, Adam. Microphone number one.
Mr. Chairman, I would like to introduce Mr. Andrew Smith.
Morning, Mr. Andrew.
Morning. I am speaking as a shareholder, a customer, and a grandfather. Coles has made significant commitments to measuring and reducing scope three emissions across its supply chain, including in financial year 2029 supplier engagement target and its financial year 2030 target for agricultural emissions. As a customer and a shareholder, I would like to know where Coles ultimately sees this going. Does the company envisage reaching a point where customers can compare products not only on price, but also on nutrition and country of origin, but finally on carbon footprint? If so, is Coles developing the product level scope three data needed to make such comparisons credible and useful?
Thank you very much for the question, Andrew. As you are aware, scope three emissions basically are our suppliers' emissions. We are working very hard in terms of working with our suppliers to be able to make sure that they understand the issues and we can help support them in terms of what we are doing so they can reduce their own scope three emissions. It is something which we are, as you mentioned, we have got targets set to be able to try and achieve. We are really pleased, though, with what we have been able to achieve ourselves with regards to our scope one and two emissions, which are down, what, 82.6%, I think, and have met our FY 2030 targets. We do have a lot of work to do.
The key issue is, as you can imagine, is our supply chain and just working with our supply chain in terms of trying to get that done. We have much deeper supplier engagement underway. We also hope to be able to be in a position in terms of being able to understand what those scope three emissions are, so as you say, that our consumers know exactly what they are buying so that they have an understanding in terms of what the environmental footprint is in terms of the product that they are purchasing.
Just to follow up, if I may.
Yeah, certainly.
There is a lot of international work on carbon and environmental labeling of food at the moment, but standardization remains a major challenge to that, as you are pointing out also. Could Coles play a leadership role in Australia in developing credible standardization for customers' information?
I think that given the size and scale of Coles as a grocer in Australia, we do have a role to be able to play. As you said, it is very complex and, to be able to do something globally. I certainly know that Leah is on one of the international groups as a director. I know that Scott is as well, and that is an area that they are all focusing on as global retailers. Yes, we do play a role in that.
Thank you.
Yeah, thank you, Andrew. Oh, number two, sorry.
Mr. Chairman, I would like to introduce shareholder Mr. Kok Chen.
The Chair and the Board.
Good morning.
Morning. In the mid-1980s, we had the Coles Myer shareholder discount card. Would the board and the Chair be considering the relaunching of the card in light of current cost of living situations? The second one is a positive. We thoroughly highly commend Coles and the board for their continued support of food donation to FareShare. It is a FareShare Kitchen. They prepare the food, and they source FareShare is part of SecondBite. My wife and I have been working there as a volunteer for over 10 years in this FareShare Kitchen, and we thoroughly recommend, highly commend Coles, the board, and the Chair for this generous donation.
Well, thank you very much, Kok, for the comments. Congratulations and thank you for also your volunteering. We certainly see the ability to be able to reduce food wastage is really important. As you said, we have donated nearly 41 million meals through SecondBite and Foodbank, some AUD 150-odd million in community support to be able to make sure that we can help and support those, but also reduce the amount of food waste we have got. With regards to your first question, unfortunately, the answer is no. We see that it is fairer for all of our customers that we continue to focus our reinvestment into price to make sure that we have the availability, as I mentioned, that we have the lower value, we have the price establishment, that we are able to give that to all customers, not just to Coles shareholders. So, thank you.
Thank you.
Thank you. There appears to be no further questions from the room. Jessica, are there any online questions?
Chairman, we have received a question from Mr. Stephen Mayne, who has asked, "The activist investor group SIX, which recently ran a powerful campaign to try and unseat Woolworths Chair Scott Perkins, was lining us up for a hostile shareholder resolution this year until we relented and cut ties with controversial U.S. tech firm Palantir. What was Palantir doing for us, and why did we cut ties? Also, we seem to be more popular than Woolworths with activist groups on the Tasmanian salmon issue. How is our approach on Tasmanian salmon different and better than Woolworths?
Thank you, Stephen, for those questions. With regards to the first one, the use of Palantir is a contract we entered a number of years ago. It was an operational tool that was really used for planning and data analysis. The key areas were forecasting out in terms of what supplies were needed, and therefore being able to work with our suppliers and ensuring we had the right supplies in the stores at the right time. The second was able to help our rostering system to ensure that we have the right staffing levels where the demand is going to be. As you can understand, technology continues to change, and it is really important that we make sure that we keep current with that technology, and we see that there was much better and operational ways to be able to achieve what we wanted to achieve.
Therefore, we did not renew the contract with Palantir, but that will edge out, and we are going through a transition process at present. With regards to salmon, I cannot really comment in terms of what Woolworths do as far as salmon is concerned. I certainly know, as I said earlier, as far as the due diligence which we do over a long period of time, the dialogue that our team have, that I have had with IMAS, the Institute for Marine and Antarctic Studies, in relation to the research they are doing at Macquarie Harbour. We certainly know that fresh salmon is important to our customers, but we are also very conscious of sourcing this sustainably. Thank you, Stephen. Jessica, any further questions?
Chairman, we have received another question from Mr. Stephen Mayne, who has asked, "Continuous disclosure was meant to end the days of large single-day share gyrations, but our stock plunged by 10% with our sales release last week. Were the Chair and the CEO surprised by this, and have we revised any of our processes since that event? If we had our time again, what should we have done differently to avoid that AUD 3 billion single-day wipeout? Why was the market so surprised and disappointed by our sales figures?
Well, Stephen, we certainly understand our continuous disclosure obligations, which we believe that we're continuing to do. That came part in terms of the results which we gave for our first operational release, first quarter operational release. The Australian share market is a lot more volatile with programmatic trading, as you're aware. Therefore, understanding what the fluctuations of the market are of any particular day are very difficult to predict, number one, and number two, to understand. We see that what we have been able to do in terms of that continuous disclosure is make sure the market is aware as soon as we're aware in terms of where we see in terms of our forecast earnings. Thank you. Thank you, Jessica. Any further questions?
Chairman, we have received a question from Mr. Kevin Charles Daly and Mrs. Jan Melba Daly, who have asked, "I experienced a repeatable online ordering fault on four consecutive orders. Each time, the call centre was able to manually complete the transaction, but despite escalation through customer care, no permanent resolution was provided, and I eventually closed the account. What process does Coles use to ensure reoccurring customer-reported system faults are escalated from frontline workarounds into root cause analysis and permanent fixes?
Mr. and Mrs. Daly, thank you for your question, and certainly on behalf of Coles, I apologize for the issues that you've faced with regards to the online ordering. With systems and processes, we do get the feedback, and we do analyze that feedback that we receive, and we ensure that we bring that into a regular quality assurance in making sure that we continually improve the systems that we have in place. Unfortunately, this does not mean that mistakes don't occur, and we continue to make sure that we're working as hard as possible so that we don't have those mistakes. As I mentioned, we're continuing to improve our online business and customer experience to make sure that it is reliable and easier for you to be able to shop.
Again, apologies, but we are continuing to work with that, and hopefully you will be able to become a Coles customer again. Thank you. Thank you, Jessica. Any further questions?
Chairman, we have received a question from Mr. Chris Birra, who has asked, "Why does Coles have more liquor stores than supermarkets, 988 versus 870? Is Coles considering to open more new supermarkets to catch up with the 1,130 Woolies Australian supermarkets?
Thank you for your question, Mr. Birra. As Leah mentioned in her address, we are looking to open 45 new supermarket stores in the next couple of years, after just opening just under 20 this last financial year. It is going to be very difficult, I think, to be able to get to a situation where we are on equal footing with regards to our largest competitor. However, it is something that is really important for us to make sure that we are in a location close to our customers. Our liquor portfolio comprises a combination of not just stores which are close to supermarkets or adjacent to supermarkets or part of a supermarket, but they are also standalone liquor stores as well.
As Leah mentioned also, as part of what we are trying to do in terms of looking at our overall Liquorland portfolio, is to try and understand where it is best to be able to grow our Liquorland business. We want to be that destination for food and drink. We are the only grocery organisation in Australia which has both food and drink. Therefore, we see it is really important to be able to have that combination, and we are working in terms of our overall portfolio to ensure that we are able to meet the needs of our customers, while also produce the returns for our shareholders. Thank you. Jessica, any further questions?
Chairman, we have received another question from Mr. Chris Birra, who has asked, "Is Coles considering moving the liquor business into a separate company like Woolworths did a few years ago, and unlocking some shareholder value, plus enabling investors and investment companies who do not or cannot invest in companies associated with liquor to be able to invest in Coles shares?
Mr. Birra, as I mentioned in my last answer to your last question, our strategy is to be that destination for food, drink, and everyday essentials. Therefore, we have no plans in terms of separating out our liquor business. We certainly see clear synergies in terms of operating the business, operating both businesses, particularly given that drink and food are natural and closely connected. We have those synergies in terms of supply chain, we have those synergies in terms of staffing, and that provides greater efficiency across our total business. Thank you. Jessica, any further questions?
Chairman, we have received a question from Mr. Raymond Roebuck, who has asked, "Chair, The Outlaw Ocean Project's five-year Food for Feed investigation featured in The New York Times Magazine mapped out more than 1,400 fish meal and fish oil plants across 64 countries. It documented forced labor, preventable worker deaths, illegal fishing, and pollution. The investigation links Coles to this global supply chain through Tasmanian salmon supplier Petuna and its feed supplier Skretting Australia. The Australian government has announced plans for civil penalties for failing to meet modern slavery reporting obligations and a new criminal offense for large companies that fail to prevent modern slavery in their supply chains. In light of these proposed reforms, has Coles independently traced Petuna's feed ingredients back to the fisheries and vessels that supplied them? What has Coles done where it identified forced labor risks or could not verify the source?
When will the board report back to shareholders?
Thank you very much for your question. We are certainly aware of the issues which were outlined in the Outlaw Ocean reporting, and we certainly take those issues very seriously. We are engaging with the supplier to make sure and really understand the traceability, understand the issues that they have. We also understand that we try and have the robust processes in place to manage these risks, particularly modern slavery risks, and understanding where they are through that system, because it is a very deep and long system. We continue to engage with the supplier to understand that, and it is something that, again, we take very seriously. Thank you. Jessica, any further questions?
Chairman, we have received a question from Ms. Natasha Michelle Lee, who has asked, "I note there is a strategic review to create a more integrated food and drink proposition. Given the changing demographics, likely greater fragmentation of drinks preferences across a wide range of subgroups, how do you intend to manage this complexity? This especially applies to the changing demand for alcoholic drinks, both types of drink and volumes drunk.
Thank you, Natasha. As I mentioned earlier in my previous answer, we see to be the destination for food, drink, and everyday essentials is really important for us. As you say, the consumer trends are changing with regards to the amount of alcohol that is consumed, but also the importance in terms of celebrations with alcohol, low alcohol, and non-alcohol beverages with food and celebrations, like we are going to be having at Christmas later. What we are doing is we are trying to understand how do we bring that food and drinks closer together. To be that integrated place, how do we bring in much more and provide much more low alcohol and zero alcohol beverages for the consumer as these trends continue to change, as well as understanding how we can integrate food into our liquor business and potentially integrate further drinks into our food business.
That is our intention in terms of it is going to be a multi-year program as we process through this. Thank you. Jessica, any further questions?
Chairman, we have received another question from Ms. Natasha Michelle Lee, who has asked, "As the company is moving towards an agentic AI rollout, which many companies are undertaking for productivity gains, could you advise whether the focus will be goals-orientated rather than an overlay of organisational functions? Equally important are the safeguards to ensure transparency and human oversight that the correct decisions are being made.
Yeah, thank you, Natasha. It's a great question, and Coles has been utilizing AI and machine learning for over 10 years, and it continues to change, and it's certainly changing very rapidly. When you think about agentic AI and the improvements that can be used to be able to take menial tasks off our staff and to be able to have those routine tasks being able to be done and make sure that our staff are engaged in terms of higher value-added opportunities is really important for us. But as you say, we're taking a controlled and responsible approach to this. We need to make sure that we've got the appropriate testing in place. We've got our own privacy policy we've got to make sure we deal with. We have a responsible AI policy.
As you say, you need to make sure that we have that human intervention or oversight to ensure that things don't go off the rails. So, our focus is really using AI and agentic AI to improve the way our customers shop, how our customers find recipes, how our customers protect themselves, and how they can manage their orders. So, we're continuing to work through that, and things will continue to change at pace, I'm sure. But what you need to understand from us is we're going to do it in a programmatic, responsible, sustainable way with human oversight. Thank you. Thanks, Natasha. Jessica, any further questions?
Chairman, there are no further online questions or comments on this item.
Thank you. As there are no further questions, we will move on to item two on today's agenda. As this item relates to my re-election as director of the company, I will invite Mr. Richard Freudenstein to chair the meeting for this item of business. Richard.
Thank you, Peter, and good morning, shareholders. This item relates to the re-election of Mr. Peter Allen as a director of the company. The text of the resolution is now displayed, and Peter's details are set out in the notice of meeting. Peter has served as a director of Coles Group since September 2024 and was appointed Chairman in May 2025. Since joining the board, Peter has quickly established himself as a highly effective director. He leads the board with a considered and constructive approach, ensuring the board is focused on the issues that matter most to the performance and future of Coles. The board believes Coles continues to benefit greatly from Peter's leadership and is unanimous in its support for his re-election. I now invite Peter to address the meeting.
Thank you, Richard. It is a privilege to serve as Chairman of Coles Group, and I am really honoured to stand here for re-election for your board today. I have long respected Coles for its reach and positive influence on the Australian economy and its community, including innovation and investment to ultimately benefit our customers. During my time on the board, and now as Chairman, I have seen firsthand the strength of the business, the commitment of our team, and the importance of continuing to invest in both. In contributing to the board, I have drawn on more than 30 years of experience, spanning listed property, retail-facing businesses, finance, and international banking, including large and complex organisation through periods of growth and transformation.
Today, with the practical perspective I bring from my agricultural enterprise, this experience has informed my contribution across strategy, governance, capital investment, and risk, and my understanding of the customers, suppliers, and communities that Coles serves. Coles operates in a complex and rapidly changing environment. Your board has an important role in supporting management while providing appropriate oversight, challenge, and judgment. If re-elected, I look forward to continuing to work with my fellow directors and the Coles leadership team to build a stronger business and deliver sustainable long-term value for you as shareholders. Thank you for your support.
Thank you, Peter. The board, with Peter abstaining, unanimously recommends the re-election of Peter Allen as a director. I now invite questions on this item of business. It appears there are no questions from the room. Jessica, are there any online questions?
We have received a question from Mr. Stephen Mayne, who has asked, "Few people know Westfield better than our new chair, Peter Allen, who was the longtime CEO of Scentre Group. Since Peter joined the Coles board and later became chair, has anything changed with the way we deal with Westfield, the commercial terms, or the scale of our reliance on that one particular landlord? How many stores do we have in Westfields across the country, and is this rising or falling as a proportion of total stores? Also, the Coles annual report disclosed that Peter owns 20,000 Coles shares, which were worth AUD 440,000 last night.
When he left the Scentre Group board in September 2022, Peter owned 6.287 million shares, which would be worth AUD 22.6 million if retained today, plus a further 4.278 million performance rights." How large is our chair's investment in our biggest landlord today, and does he have plans for his Coles investment to surpass his Scentre Group investments?
Thank you for that question, Stephen. I don't think it's appropriate for the chair to talk about his shareholdings in other companies at this meeting. I don't know, Peter, if you want to comment on any of that. Maybe we can get the detail on the number of stores we have in Westfield centres to you afterwards. I don't have that information at my fingertips, sorry. Thank you, Jessica. Are there any further questions?
There are no further questions or comments on this item.
Thank you. If there are no further questions, we have now finalized discussion of this item. The details of the proxies and direct votes received on this item will now be displayed. Please now enter your votes for item two if you have not already done so. Having finalized this item, I will now hand the meeting back to Peter to continue. Thank you.
Thank you, Richard, and thank you for your support, shareholders. I now turn to our remuneration items. Our executive remuneration framework is designed to align executive reward with the delivery of our strategy, including creating long-term shareholder value. The board carefully considers remuneration outcomes each year, having regard to financial performance, strategic achievements, and the broader context in which these outcomes are delivered. The board considers the remuneration outcomes for the 2026 financial year appropriately reflect the performance of the business over the year. Item three relates to our 2026 remuneration report, which can be found on pages 94- 114 of the 2026 annual report. This is an advisory note, sorry, advisory vote, and the text of the resolution in item three is now displayed.
While the vote on this item of business is advisory only, the board takes into account the discussion and voting when reviewing our remuneration practices and policies. The board recommends that shareholders vote in favour of the adoption of the remuneration report. I now invite any questions on the remuneration report. Microphone number two.
Mr. Chairman, I would like to reintroduce Mr. Michael Muntisov from the Australian Shareholders Association.
Thank you.
Michael.
Just want to make a comment that the ASA generally supports Coles' remuneration framework and will be voting in favour of the resolution. The remuneration framework includes two performance measures for the long-term incentive. One of these is a return on capital, which is a good measure, but it is hard for ordinary shareholders to assess, particularly when targets are not disclosed in advance and adjustments are made by the board. Will the board consider swapping this measure to something like EPS growth, which can be more readily judged by ordinary shareholders and is also more useful for potential investors?
Michael, thanks for your question. The board continually reviews our remuneration practice and principles to make sure that we are able to drive the business forward in the way that we want to ensure that we are able to achieve that strategy and the financial performance for our shareholders. Consistent with other international and local peers, it is one area which we are considering at present in terms of looking at our LTI awards and what the factors in terms of whether it is return on capital, EPS, RTSR. We are reviewing that, and if we are to make any changes, we will make sure that the shareholders are aware of that.
Thank you.
Thank you, Michael. There appears to be no further questions from the room. Jessica, any questions from online?
Chairman, there are no online questions or comments on this item.
Thank you. If there are no further questions, we have now finalized discussion on this item. The details of the proxies and direct votes received for this item are now displayed. Please now enter your votes for item three if you have not already done so. I now turn to item four, which is the approval of the grant of STI shares to our Managing Director and Chief Executive Officer, Leah Weckert, as a deferred component of a short-term incentive award for the 2026 financial year. The text of the resolution is now displayed. Details of the proposed grant are set out in the notice of the meeting. The board, with Leah abstaining, considers the grant of STI shares to be appropriate in the interest of shareholders and unanimously recommends that shareholders vote in favour of item four.
I now invite any questions on approval of Leah's short-term incentive grant. There appears to be no questions from the floor. Jessica, are there any questions online?
Chairman, there are no online questions or comments on this item.
Thank you. As there are no further questions, we have now finalized the discussion of this item. The details of the proxies and direct votes received on this item will now be displayed. Please now enter your votes on item four if you have not already done so. I now turn to item five, which is the approval of the grant of performance rights to Leah Weckert as her long-term incentive award for the 2027 financial year. The text of the resolution is now displayed. Details of the proposed grant are set out in Notice of Meeting. The board, with Leah abstaining, considers the grant of performance rights to be appropriate in the interest of shareholders and unanimously recommends the shareholders vote in favour of item five. I now invite questions on the approval of Leah's long-term incentive grant. There appears to be no questions from the floor.
Jessica, any questions online?
Chairman, there are no online questions or comments on this item.
Thank you, Jessica. There are no further questions. We have now finalized discussion of this item. The details of the proxies and direct votes received for this item will now be displayed. Please now enter your votes on item five if you have not already done so. Before I close the meeting, I would like to pause to give shareholders a final opportunity to enter their votes on all resolution. While we pause, Jessica, can I please confirm there are no additional online questions?
Chairman, there are no additional online questions or comments.
Thank you. As there are no further questions or comments, we have now finalized our discussion. That concludes the formal part of business of this meeting. If you have not already done so, please ensure that you submit your vote for each resolution. I will give you another 15 seconds. I now declare the poll closed. The final results of the poll will be advised to the ASX later today and will be published on our website as soon as possible. That concludes our business today. Thank you very much for your attendance at Coles Group's Annual General Meeting and for your support of Coles. We very much look forward to your continued support as we enter the busy Christmas trading period, and I wish everyone a joyful festive season.
I now declare the meeting closed and look forward to those of you who are here with us in the Melbourne room to join the board and the leadership executive team for drinks or coffee or tea outside the entrance of this room. Thank you very much.