IPA lashes the ACT's fascist supermarket policy

IPA: right wing apologists for Pauline Hanson.
Hardly a breath of fresh air in rational economic debate.
“Institute”?? There’s a case for false advertising right there.

They have already proven that the introduction of Aldi into the market has done absolutely nothing for competition in this country, price differences where there is an Aldi in close proximity to a Coles or Woolworths are negligable to stores where there is no competition.

You can only include Aldi in comparisons if you can compare them against own brand equivalents of the other supermarkets, if memory serves me right the difference is only a few dollars at most. Anyway, Aldi isn’t real competition for Coles/Woolworths simply because they do not have the range or quality of it’s bigger competitors and Australians shun places where then cannot get their beloved name brand food products.

Deano said :

I would argue that the current situation is the result of ‘letting the players sorting things out’. Competition is all about allowing customers’ choices determining the shape of the market. The last time I checked, there was nothing forcing anyone to use one of the major players. For a variety of reasons, the majority of consumers choose to do so of their own free will.

The government’s competition policy has little to do with improving the outcomes for consumers.

I couldn’t have said it better myself, though I will add that Stanhope clearly doesn’t understand competition policy and the illegality of preventing individuals competing in a market. Government intervention in a market has never created competition, always the opposite.

I can’t be bothered reading the IPA report.

But surely in a free market economy, the IPA would happily let the protected species open and then watch them fail as the punters go to Woolies or Coles to find cheaper goods.

Frankly, I don’t see that happening – Supabarn, even at a small premium, is a solid supermarket business and people will support it for so long as it is reasonably price competitive and stocks a good range.

As for the IGAs, perhaps they need to employ a lobbyist…

johnboy said :

Agreed troll sniffer, so a sensible government might have zoned more areas as suitable, put in a restriction on a new entrant with an existing facility within 2km, and let the new players sort things out.

Would have been a much smarter way to do it. Why didn’t they, anyone know?

ML-585 said :

If you compared Aldi products with Woolworths or Coles generic house brands, the results would be much closer if not identical.

Aldi brands are much better quality than the ‘generic’ from Coles/Woolies. I wouldn’t eat the home brand rubbish from either of the majors, but Aldi stuff is generally pretty good. (entirely subjective opinion)

ML-585 said :

If you compared Aldi products with Woolworths or Coles generic house brands, the results would be much closer if not identical.

Ah but that is only the case because WOW/Coles lower the prices of their generic products to match the Aldi ones where there is an Aldi store nearby. If Aldi Cola goes down to 65c per 1.25 litre (from current 69c), Home Brand and Coles Smartbuy will follow.

Still not a reason to exclude Aldi from pricing comparisons. Certain things like per kg Bananas/Tomatoes/Fruit and bulk chicken breast fillets are consistently cheaper at Aldi than at WOW/Coles and could easily be incorporated into such a comparison.

I seem to recall the IPA disputing the links between tobacco and chronic disease, quite possibly because the likes of Phillip Morris fund them.

I always thought ‘fascist’ meant hating somebody because of their face.

I must be misunderstanding something, because I agree with Stanhope. The IPA is infamous for putting out this sort of arrant nonsense (like they did with their clients, the ciggy manufacturers).

If any group feels that govt policy is disadvantaging them, I suggest getting anyone other than IPA to do their “research”, as it’s been shown repeatedly to be crap work.

ML-585 said :

[H]ow does opening new supermarkets cause prices to increase?

The impeccable logic is that, if non-Coles/non-Woolworths supermarkets are more expensive, introducing more of them raises average per-store prices across the ACT.

Following the same reasoning, another option would be to close all supermarkets other than Coles Belconnen.

random said :

The price comparisons in the Martin review suggest that ALDI baskets are 20% cheaper than Coles or Woolworths, so we can probably assume that the real average is somewhere south of $80.

Aldi only comes out cheaper in price comparison reports because they do not compare ‘like with like’. Any basket from Coles/Woolworths/IGA etc will contain Name Brand products (Cadbury, Coca-Cola, McCain, whatever) but these products are not stocked at Aldi as they mainly stock only House brand products. So comparing a bottle of Coca-Cola vs Aldi Home Brand Cola is not a fair comparison. If you compared Aldi products with Woolworths or Coles generic house brands, the results would be much closer if not identical.

Rant over.

Both Coles and Aldi claim to have price parity across all their stores (except fresh produce?), although I’ve never checked to see if this is true (got better things to do). I expect Woolworths and Supabarn would do likewise. Clearly I’ve missed something here: how does opening new supermarkets cause prices to increase?