Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel revealed that PMP had admitted to the "irregularities" during its inquiry into the so-called 'distribution rorts'.
"During 2007 and 2008 PMP Distribution, a wholly owned subsidiary of PMP Limited, provided some of its customers with reports that included incorrect pamphlet delivery statistics-claiming deliveries had taken place in certain areas when they had not," Samuel said today.
"The irregularity came to light as a result of an internal audit by PMP Distribution. When it discovered the problem, it contacted affected customers and approached the ACCC to resolve any Trade Practices Act concerns."
As a result, the ACCC has accepted court-enforceable undertakings from PMP Distribution that it will implement procedures to ensure the data it supplies to customers is accurate, provide the ACCC with an independent auditor's report regarding these procedures, and implement a trade practices law compliance program.
PMP quickly issued a statement saying it welcomed the conclusion of the inquiry.
"As a result, PMP now regards the matter as closed," the company said.
PMP has battled persistent allegations regarding its distribution service, with some reports claiming it lost contracts with major clients such as Coles as a result of the irregularities.
Meanwhile, the company has released further details of the "transformation plan" set to be deployed under new CEO Richard Allely (pictured).
Alley said the implementation of the plan has already saved the company $26 million, and expects it to deliver $54m in EBIT savings for the 2009 fiscal year.
Over the past six months, the company has shed jobs in Victoria, South Australia and Queensland, as well as overhauling its senior management team.
"Phase 1 of the transformation is a swift and decisive response to the changing shape of the print market, which has seen a fall in print volumes and increased competitive rivalry," Allely said.
Phase 2 of the project will be implemented in the first half of the 2010 fiscal year, with Allely saying it "will create a low-cost, customer-focused operating model aimed at re-energising the business and position it for an improvement in market conditions".
"Our aim is to make the business much less complex and hence a much lower cost producer at a time when volumes are in decline in order to underpin and drive substantially improved earnings when the market improves," he said.
"Clients will find PMP a much easier business to do business with, a business that connects on a very honest and a very open relationship and a business that is able to provide more rapid turnaround times to better address their needs."
Issue: 277 | March, 2010