Struggling Swedish appliance Company Electrolux is facing a new drama after parachuting in one of their European executives who has been accused of trying to “stich up” their Australian parts distributors with many of them refusing to sign new contracts.

This time round it’s their loyal parts distributors who are describing executives at the local operation of not being honest with them after the Swedish Company moved to try and get 36 distributors across Australia and New Zealand to sign new contracts which several claim will lead to a giant foreign conglomerate who purchased an Australian Company with a “dodgy” track record in the appliance parts market benefitting in the future under the proposed new structure.

Several of the businesses who we spoke to claim that they will lose a significant amount of money under the proposed restructure which several distributors are not prepared to sign.

During the past six months Electrolux shares have slumped 36%, they have also been forced to close down their Asia Pacific consumer operation which the Australian operation reported to.

Locally Electrolux which markets and sells AEG, Westinghouse, Simpson, Kelvinator, Chef and Dishlex brands, is struggling financially.

During the past two years, retail partners have seen a former CEO dumped, following harassment claims, by multiple staff and former management, also out was their head of human resources who was appointed by the former CEO.

Shortly afterwards several senior managements quit Electrolux Australia, telling ChannelNews that they could not work with the existing management team.

Before this the business ended up compensating their former Sales Director and General Manager, who after suing the Swedish business in the Federal Court moved to settle the case after they parted Company with their former CEO who was accused of bias against the former Sales Director who was not only liked by management, but had delivered significant growth for the business.

The drama for Electrolux distributors unfolded back in September 2023 when Carlo Gadola (seen below)  was appointed as Direct to Consumer and Aftermarket Sales & Service Director for ANZ Australia New Zealand.

He is believed to have worked with management from a company called Repa Group.

After being transferred to Australia from his former job as Head of Sales, Consumer Direct Interaction & Aftermarket Services in Europe he moved quickly restructure the local parts operation.

The business that Electrolux are tipped to favour in the restructure is Repa Group who acquired dodgy spare parts Company Big Warehouse who have been fined in the past by the ACCC for their questionable activities in the supply of appliance parts in Australia.
Currently Electrolux’s spare parts business is split into territories.

“Everyone is pretty loyal to each other territories” said one affected dealer.

“If a business was being sold or acquired in the past Electrolux had to approve a deal and we all worked together.”

Now, according to sources, Electrolux management are being described by dealers as being unethical and not to be trusted, with claim that inside sources have told them, that Electrolux is now looking at a deal where “Money and the power of a large global multinational is set to be favoured over local operators” according to one Queensland distributor.

“We believe territories are going to be abandoned with Repa Group who have deep pockets now able to compete nationally with local operators” another dealer told ChannelNews.

Prior to September 2023 ChannelNews has been told by internal Electrolux management sources, that Repa was looking to buy some of the current distributors, then suddenly they dropped all negotiations after discussion with Electrolux management in Australia, who were engaged in the proposed restructure of the Australian parts operation.

“Under the new system a tiered pricing system is set to be introduced, the more you buy the cheaper the cost of the parts. The only problem is that Repa who now own the questionable Big Warehouse can place large orders, carry more stock because they have the finances to support large scale orders.”

This claim Electrolux’s current spare parts distributors will make many of them “uncompetitive” when it comes to being able to buy the parts from Electrolux.

“Large junks of the business could end up going to the BigWarehouse Company which is now owned by Repa Group and the ACCC needs to step in and stop one Company having a monopoly,” said an angry distributor.

In 2022 the REPA Group was acquired by Parts Town, a US foodservice equipment parts distribution Company.

Members of the REPA Group are the German spare parts specialists GEV, the Italian companies LF and ATEL, the French leader EPGC and the UK branch CCS.

“Why would Electrolux want to do business with Big Warehouse who have already been convicted of misleading consumers over spare parts?” said one distributor who is among a number of them that are contemplating legal action against the Company.

What they are referring to is a 2019 conviction when the Australian Competition and Consumer Commission hit the Australian Company Big Warehouse, with a penalty for allegedly breaching the Australian Consumer Law (ACL) by misleading a consumer about their consumer guarantee rights in relation to spare parts they had ordered.

In addition to being hit with penalty, Big Warehouse was also forced to provide a court-enforceable undertaking to the ACCC in which they admitted that they most likely contravened the ACL by representing to consumers that:

spare parts were available for dispatch, when in fact they needed to be ordered from the manufacturer.
spare parts were compatible with the model of electrical appliance purchased by the consumer when this was not the case.
the consumer was not entitled to a full refund or replacement where:
a spare part ordered was not supplied within a reasonable time after payment was made.
a spare part was not compatible with the electrical appliance set out in the consumer’s order; or
a spare part was damaged during delivery and the consumer had not purchased insurance from Big Warehouse.

“Big Warehouse has admitted that when consumers requested a full refund or replacement, they were either denied one, only given a partial refund, or offered a store credit instead,” ACCC Commissioner Sarah Court said at the time.

“According to some complaints, consumers were incorrectly charged for a replacement part in circumstances where they should not have been. Such charges included a 30 per cent restocking fee to purchase the correct part.”

“If a consumer buys a spare part and is provided the incorrect part or it is damaged on arrival, they are entitled under the Australian Consumer Law to choose a full refund or replacement.”

Under the terms of the enforceable undertaking given to the ACCC, Big Warehouse will provide compensation to certain customers who ordered spare parts and subsequently requested a full refund or replacement.

At the time, an ACCC executive said “ “It is not okay to deny consumers their rights under the consumer law. We will continue to take enforcement action to send a strong deterrent message to businesses like Big Warehouse that this is not acceptable.”

This was not a one-off occurrence, the ACCC claim that their questionable activities in the spare parts market had been going on for several years before they swooped on the business.

ChannelNews has asked Kurt Hegvold the recently appointed Managing Director of the problem plagued Australian operation.

We have also asked Carlo Gadola the Direct to Consumer and Aftermarket Sales & Service Director -ANZ Australia New Zealand to comment.

ChannelNews has no evidence that any Electrolux executive has done anything illegal or wrong, but like several times in the past the Swedish Companies PR operation has chosen to not comment on previous serious allegations concerning the conduct of senior management.