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It’s Time… to stop Coles and Woolworths

By Steven Bailey - 11 November 2014 36

Barr

Andrew Barr, I don’t want another Coles in Dickson. I want more small business – and I think Jon Stanhope would agree with me.

The greatest moral struggle of our generation is whether governments have the capacity, or the will, to represent their fellow citizens firstly and fundamentally, and at the exclusion of vested interests that set to exploit populations and markets upon which a citizenry depends.

The Labor/Liberal duopoly obediently supports the corporate duopoly of Coles and Woolworths.

It often strikes me that so many freethinking men and women (mostly men) will run to the defence of large corporations with such vigilance, and yet to the defence of individuals with an equal force of laxity.

My moral objection to Coles and Woolworths is echoed by countless entities throughout Australia including The Council of Small Business of Australia, every independent politician I know, and most small political parties in Australia.

I have met so many people who have lost so much to this corporate duopoly as a result of their predatory and unprecedented market power.

Coles and Woolworths control 80% of Australia’s food, 400 hotels, Dan Murphy’s, BWS, First Choice, Liquor Land, Vintage Cellars, Big W, Kmart, Target, Bunnings, Office Works and Magnet Mart, and more pokie machines than any other consortium in Australia.

The food market is the most important market to a country, and for it to be controlled by a duopoly is a moral repugnance that does not exist in other developed nations. Such repugnance should not be supported by the ACT.

Coles and Woolworths are gradually replacing wholesome ingredients with rubbish like corn starch, vegetable oils and palm oils. They have become both the producer and the processor. In doing so, they seek to corporatise regional Australia, condemning the family farm to a national memory. This ruthless duopoly strangles small business and exploits consumers with misleading food labelling. They are dictating what food you eat, and they are dictating the way you buy fuel.

Canberra has lost its independent fuel suppliers, and we are now exposed to prices often in excess of 10 cents per litre higher than Sydney and Melbourne. This is not a result of transportation.

Do we want to live in a country where people on low incomes are forced to buy groceries from one corporate entity just so they can afford fuel for their family car?

There is no precedent for such a duopoly to exist in a modern developed economy.

Not even in America will you find such market dominance.  Franklin D. Roosevelt dismantled Rockefeller’s and J.P. Morgan’s empire, and all without harming the shareholders. Through a sensible process of divestiture, Australia can do the same.

The ACT may hold her head high in many respects but when it comes to supporting small businesses, our Government has failed.

What’s Your opinion?


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36 Responses to
It’s Time… to stop Coles and Woolworths
Holden Caulfield 9:15 pm 11 Nov 14

Steven Bailey said :

I’m referring to the national percentage of market dominance, not the number of shoppers.

Yes, but I’m asserting that the two are linked. That is, if Australia had a similar population to the US then smaller players such as Aldi etc would have the room to move upwards into the space dominated by Coles/Woolies.

Perhaps more importantly, having more customers means (potentially) a greater number of people/corporations willing to invest/speculate on smaller players and thereby put pressure on established in the market to achieve greater yields for their investors.

Let’s say Aldi has 10% of the Australian market, surely 10% of 320m can exert a lot more influence than 10% of 22m. Even if the bad guys still have 80%.

Alas, there are enough people like me who don’t really like the duopoly but for reasons of apathy and/or convenience surrender to it. Which brings us to…

Steven Bailey said :

I agree that there is little the territory can do, but sometimes doing something little is still the right thing to do.

Hear, hear! And more power to you for having a crack at doing something about the issue instead of being a lazy so and so like me, haha.

rosscoact 7:24 pm 11 Nov 14

The erstwhile supermarket competition policy comes to mind.

HenryBaits 6:54 pm 11 Nov 14

HiddenDragon said :

arescarti42 said :

There are two critical things you’ve missed.

1. The new Coles in Dickson isn’t predominantly taking the business of small firms, it’s encroaching on the near complete monopoly that Woolworths Dickson has in the inner north. Anyone who lives in this area knows what an overpriced, understaffed, shithole Woolworths Dickson is, and is desperate for some major competition to shake things up.

2. It isn’t just Coles that is coming to Dickson, they’re also building a new Aldi there too, so the change is hardly just supporting the Colesworth duopoly. The ACCC reckons that an Aldi in close proximity reduces Colesworth prices by ~5% on some items.

Personally, I can’t wait for Aldi and Coles to open.

I’ve certainly observed the same thing in other locations – if one of the major supermarkets has a shopping area/centre to itself then service, price (interestingly) and range tends not to be as good as in locations where the other major is present. A nearby ALDI usually shakes things up, too.

I shop in Woden and the Coles and Woolies (which are next to one another) are priced the same as they are anywhere else.

Steven Bailey 6:51 pm 11 Nov 14

arescarti42 said :

There are two critical things you’ve missed.

1. The new Coles in Dickson isn’t predominantly taking the business of small firms, it’s encroaching on the near complete monopoly that Woolworths Dickson has in the inner north. Anyone who lives in this area knows what an overpriced, understaffed, shithole Woolworths Dickson is, and is desperate for some major competition to shake things up.

2. It isn’t just Coles that is coming to Dickson, they’re also building a new Aldi there too, so the change is hardly just supporting the Colesworth duopoly. The ACCC reckons that an Aldi in close proximity reduces Colesworth prices by ~5% on some items.

Personally, I can’t wait for Aldi and Coles to open.

Notwithstanding that I have ‘missed’ nothing, I would add to one of your points that the ACCC believes that Coles acts illegally. I agree that the Dickson Woolworths is an overpriced and understaffed shithole. I would simply assert that the Dickson Coles would be just as overpriced, understaffed, and… shitholish.

Steven Bailey 6:50 pm 11 Nov 14

Holden Caulfield said :

“There is no precedent for such a duopoly to exist in a modern developed economy.

Not even in America will you find such market dominance.”

320,000,000 shoppers > 360,000 shoppers

Comrade, I agree with the theory of your angst against the supermarket duopoly. However, the root cause rests much further up the capitalism chain than any decisions our local council can make.

All of the negatives you list put a big tick in the box of mum and dad investors (and the corporates too, of course). At once the vicious cycle becomes complete.

I’m referring to the national percentage of market dominance, not the number of shoppers. I agree that there is little the territory can do, but sometimes doing something little is still the right thing to do.

HiddenDragon 6:02 pm 11 Nov 14

arescarti42 said :

There are two critical things you’ve missed.

1. The new Coles in Dickson isn’t predominantly taking the business of small firms, it’s encroaching on the near complete monopoly that Woolworths Dickson has in the inner north. Anyone who lives in this area knows what an overpriced, understaffed, shithole Woolworths Dickson is, and is desperate for some major competition to shake things up.

2. It isn’t just Coles that is coming to Dickson, they’re also building a new Aldi there too, so the change is hardly just supporting the Colesworth duopoly. The ACCC reckons that an Aldi in close proximity reduces Colesworth prices by ~5% on some items.

Personally, I can’t wait for Aldi and Coles to open.

I’ve certainly observed the same thing in other locations – if one of the major supermarkets has a shopping area/centre to itself then service, price (interestingly) and range tends not to be as good as in locations where the other major is present. A nearby ALDI usually shakes things up, too.

knuckles 5:39 pm 11 Nov 14

Andrew Barr,
I’m glad you are putting another Coles at Dickson.
They have everything I need under the one roof, meaning I can do my shopping a lot quicker and get on with the important things in life.

rommeldog56 5:26 pm 11 Nov 14

While you are trying to fix up the Woolies/Coles duopoly, can you also please get the often unacceptably long queues at the checkouts at Woolworth’s at Erindale, fixed. They don’t seem to have much regard for their customers time nor queue management by opening up more checkouts at peak useage time !. Grrrrr.

Evilomlap 4:27 pm 11 Nov 14

I for one appreciate the market dominance of megalomaniacal supermarket chains run by Bond villains who keep celebrity chefs chained up in basements and only let them out to film unscripted endorsements. Besides where else am I gonna buy my floppy zucchinis and mouldy strawberries?? Not to mention service that makes me genuinely fearful the dude behind the register is going to snap at any moment and leap across the counter to beat me to death with the EFTPOS machine? Stop Coles and Woolworths? I say never!

Holden Caulfield 4:26 pm 11 Nov 14

“There is no precedent for such a duopoly to exist in a modern developed economy.

Not even in America will you find such market dominance.”

320,000,000 shoppers > 360,000 shoppers

Comrade, I agree with the theory of your angst against the supermarket duopoly. However, the root cause rests much further up the capitalism chain than any decisions our local council can make.

All of the negatives you list put a big tick in the box of mum and dad investors (and the corporates too, of course). At once the vicious cycle becomes complete.

Jivrashia 3:47 pm 11 Nov 14

Call me blissfully ignorant, but I simply don’t get much of this article.

– Duopoly was legal the last time I checked. What isn’t is abuse of monopoly/duopoly power by such behaviour as predatory pricing, vertical restraint – but I thought ACCC looked after that?
– Should businesses be judged by their size?
– Price vs Quality – the consumers will decide what they will put up with with respect to quality (or ‘rubbish’, and price is currently trending. They aren’t being forced.
– Fuel dockets – this IS a problem. Isn’t this related to tying arrangement, which is illegal in a lot of countries? http://en.wikipedia.org/wiki/Tying_(commerce)
– Moral? Please don’t mix up moral with economics, as they are mutually exclusive. The first and foremost assumption of any economic theory is GREED.
– Misleading food labeling – good on Chasers for expose their “fresh” ideas..

The bottom line is that this duopoly works – supported both by regulatory bodies (most of the time) and the consumers.

However, it is up to the government bodies to ensure that these corporations are following the commercial law at all times.
If the law isn’t working then it needs to be fixed. For example, the fuel docket is definitely a loophole in the Australian commercial law. That’s where you can vent your moral argument, in fixing laws.

bd84 2:23 pm 11 Nov 14

The ACT government is not responsible for retail competition, nor should it be. It has already wasted a lot of our money creating a useless policy about this.

We operate in a free market society which is designed to have minimal Govenment interference, and what you see in the supermarket industry is normal market competition of a mature industry whereby it starts with many businesses which reduces over time through market forces.. something learnt in a first year uni course..

While there should be appropriate (Commonwealth) government regulation should be in place, that shouldn’t be the government interfering in the market. The best way of stopping their spread is for people to stop shopping at the big supermarkets and to go shop somewhere else. However, since they provide a service that most people are reasonably happy with, so I don’t see that happening anytime soon.

Blen_Carmichael 1:31 pm 11 Nov 14

Actually, make that Steven Bailey, not Andrew Barr.

Blen_Carmichael 1:12 pm 11 Nov 14

I think Andrew Barr might give more credit to Theodore Roosevelt for this rather than his fifth cousin. Of course, that would mean complimenting a Republican.

arescarti42 12:59 pm 11 Nov 14

There are two critical things you’ve missed.

1. The new Coles in Dickson isn’t predominantly taking the business of small firms, it’s encroaching on the near complete monopoly that Woolworths Dickson has in the inner north. Anyone who lives in this area knows what an overpriced, understaffed, shithole Woolworths Dickson is, and is desperate for some major competition to shake things up.

2. It isn’t just Coles that is coming to Dickson, they’re also building a new Aldi there too, so the change is hardly just supporting the Colesworth duopoly. The ACCC reckons that an Aldi in close proximity reduces Colesworth prices by ~5% on some items.

Personally, I can’t wait for Aldi and Coles to open.

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