Liz Knight’s column in The Sydney Morning Herald
this morning tells the story of a high-powered meeting of senior
Australian retail figures in Sydney earlier this week – a meeting that
calls to mind that dictum from Adam Smith about being suspicious when
people “of the same trade meet.” The
column made it clear the meeting was driven by Woolworths CEO, Roger Corbett, and Coles
Myer’s John Fletcher, with other retailers along to make up the numbers and give
a patina of fellowship.

Knight wrote:

At
lunchtime last Monday the 20 most powerful men and women in Australian retailing
held a secret meeting at the exclusive Royal Sydney Yacht Squadron clubhouse at
Kirribilli on Sydney’s North Shore. The invitation had
been issued by the two industry big boys: the chief executive of Woolworths,
Roger Corbett, and the head of Coles Myer, John Fletcher.

For
many, it was the first time they had been in the same room as the two men, who
have long been not just arch rivals but arch
enemies.

The
pair had decided to get all the major retail chief executives together, from
David Jones’s Mark McInnes to Mike West from Best
& Less, to join in a common mission.

A
couple of ideas were tossed around. The first was a united front on regulatory
issues. So Graeme Samuel over at the Australian Competition and Consumer
Commission may take a keen interest in what the retailers are up
to.

Now here’s what Adam Smith wrote about these sorts of meetings more than two
centuries ago:

People of the same
trade seldom meet together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some contrivance to
raise prices. It is impossible indeed to prevent such
meetings, by any law which either could be executed, or would be consistent with
liberty and justice. But though the law cannot hinder
people of the same trade from sometimes assembling together, it ought to do
nothing to facilitate such assemblies; much less to render them
necessary.

Bearing in mind that both Woolies and Coles were last in
the Federal Court together on charges from the ACCC over restricting
competition in the liquor industry, consumers and smaller retailers
have every right to be concerned.

Coles
settled that case for a fine and costs totalling $5
million. Woolies is fighting the charges. Woolies has a history of running up against the Commission in
court over restricting
competition.