Graeme Samuel embarked on a media blitz after the launch of the ACCC’s 700-page grocery inquiry report yesterday and sounded very well informed on all the issues.
This should come as no surprise given the nation’s long-serving competition cop is one of the sharpest intellects corporate Australia has produced who also has considerable personal experience with retailing.
Samuel was a director of music retailer Brashes when it collapsed in 1993 and his family also has extensive retail interests, most notably through its shareholding in the burgeoning DFO chain which has had numerous legal fights with the big boys such as Westfield. The scale of Samuel’s retail interests and potential conflicts was canvassed in this Crikey story in February 2006.
The ACCC came out strongly on restrictive planning laws in its report, focusing on the way competitors lodge objections to rival developments and big retail chains sign leases with landlords which prohibit competitors from being allowed to open up in the same centre.
It is ironic in the extreme that Samuel’s family continues to profit directly from the only retail developments exempted from state planning laws – those at Federally regulated airports.
The DFO chain has specialised in airport developments and Samuel retained his interest in its operations at Brisbane Airport, Essendon Airport and Moorabbin airport after becoming ACCC chairman.
That said, there are plenty of other worthwhile revelations in the ACCC report which has put Woolworths under the pump, especially given that grocerychoice.gov.au reveals it is more expensive than Coles in 52 of the 61 regions.
The ultimate measure of any regulatory response against Woolworths will be from its reported profits and share price. The stock is up another 2% to $26 today so shareholders and analysts are clearly not at all worried about Kevin Rudd.
This is largely because the ACCC doesn’t have any powers of forced divestiture, which is what the nation needs to wind back the 70% market share that Coles and Woolies have in the dry grocery market.
The fall of Franklins in 2001, when Woolworths picked up 67 of its best stores, marked the moment when its power really got out of hand, so it is no surprise that the share price has almost tripled since then.
Forcing Coles and Woolies to sell a combined 50 stories to the demonstrably cheaper Aldi would do the trick, but no-one is talking about introducing such powers which operate in other countries such as the USA.
Listen to last night’s discussion about the ACCC report with Lindy Burns on 774 ABC Melbourne.
The consumer in Australia gets shabby treatment compared to his/her counterparts in Europe and U.S.A.
Not just in groceries but in each and every sphere where the consumer has to battle every inch of the way for fair treatment by an adversary who makes many political donations and lobbies incessantly.
Nothing will come of this fairy floss of a website.
We pay about 12% of our incomes to eat, something one has to do to stay alive. In Afghanistan they spend 70% of all their income to get bad food.
Let’s all pretend we are grown ups and stop this pathetic bleating shall we.
I play a minor sport that leaves me hanging around major cities for a week at a time, hanging out with fellow competitors hose houses I live in. SO, I can sa with authority – Woolworths stores, across the Eastern seaboard, are cleaner, better presented, more fully stocked and better layed out than Coles over a comparison of at least forty shops. I’ve only been to a about four of Aldi’s, but the store presentaton is usually abysmal.
The food I buy goes into my body. If the store cannot keep itself clean, I assume they have even worse practice out the back.
I never want to go to two shops in an evening. When Coles understocks, which happens often, I have to go to the Woolies anyway. The reverse has never happened.
Fruit and vege shops by independant retailers are simply better than the supermarket frui and vege chains. But I work during th days, and food shop after 7pm. Therefore, none of these better retailers are available. Parking restrictions and storage issues mean I cannot shop during the day.
Do I pay more at Woolworths? Yes. I pay more money. But I can’t shop at the smaller retailes with shorter opening hours, and I at my hourly rate I waste less time in double shopping by going to Woolies over the under-stocked Coles.
Woolworths power might be out of hand because they give people what they need and their competitors have practices that are not compatible with modern living.