Advertisement

Stanhope stands alone and shrill on Supabarn Supermarket Policy

By 17 June 2010 18

The fighting over supermarket policy is really intensifying.

The Liberals’ Zed Seselja is especially happy to note that the Commonwealth Labor Minister for Competition, Craig Emerson, has lashed the crony capitalist “picking winners” masquerading as competition in the ACT:

On radio this morning, Minister Emerson was asked what the Federal Government’s view was on ACT Labor’s supermarket policy;

“We don’t agree with the ACT’s policy… We believe in competition, we believe that competition is good, and more competition is better and when you knock competitors out of the market than the others that remain in the market know that they don’t have to face that stiff competition and the potential losers from that are the supermarket customers in the ACT, so we don’t support the policy of the Government here the ACT. (Federal Minister for Competition Policy, Craig Emerson, 2CC Breakfast – 16/6/10).

When asked about whether the Federal Government had put pressure on Jon Stanhope and ACT Labor, Minister Emerson said;

“We have written to Jon Stanhope, indicating that it is our view, and my view as Competition Policy Minister, that this is the wrong way to go, that picking winners, restricting competition is not good for the customers of the ACT.”

His Chiefliness has been putting on some vintage angry voice to shout down the whole rest of the world.

Please login to post your comments
18 Responses to
Stanhope stands alone and shrill on Supabarn Supermarket Policy
thehutch 10:34 am
17 Jun 10
#1

Personally I like Comrade Stanhopes policy… Just releasing land to the market will most likely result in Woolies or Coles buying the land and nothing changing.

There’s nothing to say it will work to reduce prices though – but worth a shot me thinks

Trunking symbols 11:08 am
17 Jun 10
#2

Surely it’s time for Stanhope to drop this stupid idea. Already I’ve heard rumours that his attempt to promote Superbarn over Woolies and Coles is the result of, ahem, financial incentives, now we hear that not even his comrades in federal Labor support his policy. I go to Woolies and Coles because they have what I want at cheap prices – that’s why they are so dominant, that’s why the public overwhelmingly supports them over expensive, two-bit operators. I don’t give a flying f*** about competition, I just want to feed my family at a reasonable price. Stanhope should keep his bib out of the free market, once politicians start meddling in commerce you get things like WA Inc and the Vic and SA State Bank debacles.

trevar 11:13 am
17 Jun 10
#3

I’m with His Chiefliness too. It’s worth a shot to even out the playing field.

jimbocool 11:24 am
17 Jun 10
#4

I thought Satnhope was particularly shouty and illogical this morning on ABC radio. The issue isn’t whether coles/woolies should be excluded from some sites, I think most people agree it’s a supportable position, but rather that there should still be competition for those sites from other players. So in the case of the Kingston site – promised to Supa Barn – Woolies and Coles are out (fine), but surely IGA, Franklins, Foodtown etc should all have a chance to bid for it. When presented with this argument, Stanhope just went berserk and avoided the issue altogether.

p1 12:12 pm
17 Jun 10
#5

jimbocool said :

I thought Satnhope was particularly shouty and illogical this morning on ABC radio. The issue isn’t whether coles/woolies should be excluded from some sites, I think most people agree it’s a supportable position, but rather that there should still be competition for those sites from other players. So in the case of the Kingston site – promised to Supa Barn – Woolies and Coles are out (fine), but surely IGA, Franklins, Foodtown etc should all have a chance to bid for it. When presented with this argument, Stanhope just went berserk and avoided the issue altogether.

This pretty much covers what I want to know. If the problem is that some players in the market own too many stores and that it is stifling competition, fine. Eliminate those player from bidding. If he thinks (for example) that IGA is already a big player and will also be limiting competition then he could exclude them too.

But I, as a person with no existing supermarkets in Canberra, should be able to bid on the site shouldn’t I? Wouldn’t that be good for competition and guarantee the best outcome?

A Noisy Noise Annoys 12:55 pm
17 Jun 10
#6

It has occurred to me that Stanhope’s supermarket policy is legally questionable. Surely preventing particular supermarkets from opening in a particular location is a restraint of trade. If the rugby league players association was able to get the draft struck down on these grounds then surely Coles and Woolies would be able to mount a High Court challenge to Comrade Jonny and his silly rules. I’ll be backing them all the way.

Clown Killer 1:10 pm
17 Jun 10
#7

Surely preventing particular supermarkets from opening in a particular location is a restraint of trade

I think that example would be a restraint of trade. But the policy isn’t stopping particular businesses from opening at a specific location, it’s simply stopping them from purchasing the land that they would need in order to open up that business at that location.

I guess as the owner of that land the Government should be entitled to sell it to whoever it wants. As a community we should probably be interested in making sure that the Government gets a maximum return on the sale of a public asset and it could possibly be argued that ‘maximum return’ could also include consideration of the Governments policy outcomes.

If the feds don’t like it they can shove it or change the law to stop the ACT Government. Like the majority of Federal Labor Ministers, Emerson is out of his depth. His comments are little more than fat-mouthing in place of any substantive contribution.

Deano 2:04 pm
17 Jun 10
#8

Clown Killer said :

But the policy isn’t stopping particular businesses from opening at a specific location, it’s simply stopping them from purchasing the land that they would need in order to open up that business at that location.

Then what’s stopping the likes of Supabarn turning around and reselling the site to Coles or Woolies for a handsome profit.

troll-sniffer 2:15 pm
17 Jun 10
#9

Many guvmnts throughout the world occasionally take action to reduce monopoly trading. The good ole USA has invoked anti-monopoly action at various times, the Aussie guvmnt does it reasonably regularly. It’s not something that is normally considered without the advice of expert economists and the like, and action is not taken lightly.

What I’m finding difficult to comprehend are the posts here that almost fawn over the duopoly’s favoured status. It’s almost as though these people actually swallow the line that they are the Fresh Food People and whatever slogan Coles uses to market itself. I suppose these people believe that Mackas exists solely to fund Ronald MacDonald House, or KFC cares about the welfare of its chickens.

Finally, why would Joe Public worry about a bit of market sharing and choice? I reckon 95% of Coles and Woolies customers drive to their store of choice and load up once a week, often at the bigger centres where they can do all their other bogan shopping without having to suffer the pangs of fresh air, so whether or not Coles has a site 3km or 5km down the road with a Supabarn or other independent in between somewhere really shouldn’t matter to them.

jimbocool 2:24 pm
17 Jun 10
#10

Trunking Symbols – Supa Barn have been lobbying hard for this sort of thing for a long time, in a range of fora, including nationally. Speculating that ‘financial incentives’ are the cause of the policy is a bit unfair. That said, they probably can’t believe their luck in getting exclusive access to prime sites – they would’ve been expecting to compete with the minors.

The cat did it 2:45 pm
17 Jun 10
#11

I was surprised that Emerson brought into this issue. What was he thinking?- or more likely what was one of his whiz-kid advisers thinking? I’ve got a horrible suspicion that said whiz-kid glanced through a copy of the IPA ‘study’ without realising what IPA actually is, thought ‘there’s a media release in this’, and cranked the Minister up for a statement.

I’m still not clear about the ACT Government’s policy, but the concept of a ‘full service’ supermarket compared to a ‘convenience store’ seems to have assumed a significance it didn’t have at the beginning of the process- I’d be interested to know where this particular criterion came from. But I know that if my suburb had been promised a full-size supermarket, and it ended up with something smaller and more expensive, I’d be pissed off.

PM 3:11 pm
17 Jun 10
#12

The problem with the ACT Government is that it thinks any public asset can be sold/leased etc without any public accountability.

For example, the hospice which was mixed up with that Calvary hosptial thing was thrown into the deal; there was no request for tender.

To seemingly hand-pick only one out of many potential businesses is abhorrent. P1 was right – he should have been allowed to bid.

Why isn’t this deal (and the Calvary attempt for that matter) heading for a corruption enquiry? I’m not saying anyone’s guilty, but I wouldn’t mind seeing the basis for these decisions.

aussieboy 4:07 pm
17 Jun 10
#13

jimbocool said :

there should still be competition for those sites from other players. So in the case of the Kingston site – promised to Supa Barn – Woolies and Coles are out (fine), but surely IGA, Franklins, Foodtown etc should all have a chance to bid for it. When presented with this argument, Stanhope just went berserk and avoided the issue altogether.

“Picking winners” is a huge problem when it’s hard to choose efficiently
(e.g. who should we pay to supply Australia with renewable energy?)

But in Canberra, there are only 5 big chains:
-Coles: already has cheaper prices
-Woolies: already has cheaper prices
-IGA: has the economies of scale needed already, but refuses to reduce prices
-ALDI: already has cheapest prices (but operates a different model so is not a direct competitor per se)
-Supabarn: prices almost as cheap as Woolies/Coles, clear aspirations to be a big discount chain (as opposed to premium convenience like IGA) and already has 4 big ACT stores
-Franklins etc – would need to open 5+ stores in quick succession to have an impact on overall grocery prices… this is just not gonna happen in Canberra

Clearly, the only way to reduce prices through increased competition is to hand the sites straight to Supabarn (who should reduce their prices to Woolies/Coles levels with a few more stores)

ALDI only reduces prices in mainstream stores when it is the direct vicinity of such stores… because these sites are stand-alone, giving the sites to ALDI would have no effect on grocery prices in general

GregW 4:58 pm
17 Jun 10
#14

As ideologically supportive as I am of the market approach, it is clear in this case that a direct sale to Supabarn is the best approach if decreasing grocery prices is the aim. IGA supermarket owners have (lazily) elected to continue to purchase from it’s overpriced distributor Metcash, which means that regardless of how aggressively the store owners reduce their margins they will not beat Woolworths or Coles. I believe that, for most products, Supabarn negotiates directly with manufacturers. The manufacturers, owing to their desire to break the current duopoly, probably offer Supabarn comparable wholesale prices.

As a bit of an aside, ALDI is apparently opening a new store in the Belconnen mall extension.

damien haas 5:24 pm
17 Jun 10
#15

There is no policy.

Where is it ? Whims are not policy.

Ryan 6:24 pm
17 Jun 10
#16

Supabarn are actually supplied by the IGA Warehouses, funnily enough.

Pandy 9:09 pm
17 Jun 10
#17

Does he shout and bully his staff too?

The cat did it 9:45 am
18 Jun 10
#18

How much of this issue is attributable to the differing interests of two property-owning families, both of Greek extraction?

Follow
Follow The RiotACT
Get Premium Membership
Advertisement
The-RiotACT.com Newsletter Sign Up

Images of Canberra

Advertisement
Sponsors
RiotACT Proudly Supports
Advertisement
Copyright © 2014 Riot ACT Holdings Pty Ltd. All rights reserved.