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Stanhope to go it Alone on Supermarket Competition Policy.

By Clown Killer - 7 October 2009 17

Our Chiefly Leader (wearing his “Minister for Business and Economic Development” hat) has put out a press release announcing the release of the outcomes of the Governments review into supermarket competition policy – A review prompted by the desire to achieve greater competition and diversity in Canberra’s retail grocery sector.

Those with memories longer than a goldfishes will no doubt recall that this review was a response to the July 2008 ACCC Inquiry into retail grocery prices, which, amongst other things, recommended that State and Territory governments leave no stone unturned in pursuit of improved competition in the grocery sector – even if that meant fiddling with zoning and planning laws.

The Australian on-line has taken a more alarmist view claiming that His Chieflyness wants to ban Woolworths, Coles and IGA from bidding on new supermarket sites and is going as far as to suggest that our local response puts us at odds with the Federal Labor party, whose policy response to date has been to encourage greater flexibility in leasing arrangements at malls and removing the opportunity for the big players to veto new tenants who are competitors.

So there’s a couple of issues there just straight off the bat – The dead hand of Government regulation and market intervention, of course – but if the really big players are out of the race before the stewards have set the barrier who else is there? Superbarn will be an obvious beneficiary, but is there room for a plethora of small business operators in the very big business of family groceries?

What’s Your opinion?


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17 Responses to
Stanhope to go it Alone on Supermarket Competition Policy.
dvaey 7:55 pm 10 Oct 09

I-filed said :

dvaey said :

If woolies/coles can come in and undercut the price of goods at the local grocery store, isnt that exactly what competition is meant to achieve?

dvaey, that’s unlikely, because Woollies will do what they did in Dickson: they were cheaper than their rival, independent supermarket (to the point of sacrificing profit) and as soon as that supermarket went under, Woollies put up their prices largely to parity with IGA Ainslie.

So, if woolies puts their price up, go elsewhere, wheres the problem? If you dont like the prices available at Dickson, then go to Civic or Belconnen, or any of the other stores nearby. Its not like we live in a 2-horse town with one grocery store, we live in a city with dozens of options. I just really dislike how some of the smaller shops such as IGA or Supabarn, at times can almost be as expensive buying household goods at the 24hr petrol station. I remember in summer last year, when IGA Isabella almost doubled the cost of a bottle of coke, to the point it was cheaper to buy at Calwell Caltex than the supermarket.

I-filed 5:32 pm 10 Oct 09

dvaey said :

If woolies/coles can come in and undercut the price of goods at the local grocery store, isnt that exactly what competition is meant to achieve?

dvaey, that’s unlikely, because Woollies will do what they did in Dickson: they were cheaper than their rival, independent supermarket (to the point of sacrificing profit) and as soon as that supermarket went under, Woollies put up their prices largely to parity with IGA Ainslie. In fact, for a while – while Woollies were calibrating and finetuning their prices to gouge according to local demographics – several branded lines were actually cheaper at IGA.

dvaey 4:26 pm 10 Oct 09

imhotep said :

Nah, couldn’t happen. Not in this town. You don’t get to be a minister in the ACT Government unless you have the relevant skills and ability.

I thought government was meant to be representative of all the people, not just those with law degrees who have tired of ripping off clients. While you do need some intellect to join government, I actually prefer to see the ordinary people getting elected, rather than ex-lawyers and those from the top end of town.

I also fail to see the issue with a woolworths/coles replacing a smaller and more expensive grocery store, from a consumer cost perspective anyway. Sure some stock like fruit/veg might be a little iffy, but caveat emptor, that situation can exist at any shop. If woolies/coles can come in and undercut the price of goods at the local grocery store, isnt that exactly what competition is meant to achieve?

imhotep 2:09 pm 10 Oct 09

I-filed said :

….What better way to kill off their [Woolworths and Coles] only viable competition than by either hoodwinking a government that is so incompetent it has no-one on board with the relevant knowledge and skills….a bit of flattery and a couple of sherberts with a giggling minister or two.

Nah, couldn’t happen. Not in this town. You don’t get to be a minister in the ACT Government unless you have the relevant skills and ability.

All sarcasm aside, if they do actually implement all the recommendations in the report I’ll be impressed (and surprised).

I-filed 9:02 am 10 Oct 09

In fact, if they include IGA that would reek of Woolworths’ and Coles’ influence over the ACT Government. What better way to kill off their only viable competition than by either hoodwinking a government that is so incompetent it has no-one on board with the relevant knowledge and skills, or, carrying out some actually corrupt plan with the government following a bit of flattery and a couple of sherberts with a giggling minister or two. Making a smalltown-mentality minister feel influential and important can be very easy for reps from the top end of town.

sexynotsmart 8:58 pm 09 Oct 09

I’m not convinced IGA should be blacklisted either.

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icantbelieveitsnotbu 1:23 pm 09 Oct 09

I was overseas a few years back and London was full of ‘High-Streets’ with heaps of indie supermarkets… why can’t we have more of those?

canucksfan 4:58 pm 08 Oct 09

Although i rarely shop at coles and woolworths, i understand that they do serve some sort of purpose in that they do employ local people(generally not enough)and can make shopping for grocery items convenient. IGA’s are the way to go however, as they are generally owned by locals who spend their money locally, leaving more of the money in the area.
There was a call last year for the IGA’s of Canberra to ‘pool’ together on fresh produce to try and bring the prices down. I believe Seechange was involved but am not sure how far the plans got.

S4anta 11:48 am 08 Oct 09

In terms of competition there is a plethora of small co-ops in the grocery sector, similar to IGA. The only problem that is presented with these co-op’s is buying strength. That is, the more of them in a locality the cheaper the transport and unit cost to the customer is, as they will order in bulk and split it amongst the indivudal stores.

The advice is old hat, but the best way to lower grocery prices, is to the old age thing of buying your vegies at green grocer or farmer’s market, or grow your own. And grab your meat from a butcher.

Supporting small business really is the only way to go on this issue. The Government can stamp their collective feet like petchulant children but until the wider public starts spending their hard earned elsewhere, the larger concerns will not react and sit there a bull seal on the bonnet of a car in the South Island of New Zealand.

Thoroughly Smashed 11:32 am 08 Oct 09

Ross Solly interviewed someone who was involved in the report this morning, and seemed to have the intellectual upper hand, which is telling.

H1NG0 8:37 am 08 Oct 09

Bring in Franklins. Has the range of Woolies and Coles at a fraction of the price.

I-filed 11:07 pm 07 Oct 09

IGA has less than 10 per cent of the market and should not be treated same as the evil duo.

Primal 10:35 pm 07 Oct 09
housebound 8:20 pm 07 Oct 09

Has anyone found a link to the report itself?

Rule no. 1 of these things is that both sides are probably not telling the whole truth.

bd84 8:11 pm 07 Oct 09

I think banning the major chains from bidding for new sites in the ACT would break competition laws, you’re not legally allowed to prevent a business from entering and competing in a market. They would still need to consider all bids equally no matter who they’re from.

While I have no problem with reviewing planning laws to offer opportunities for more competition, however they should not be doing it blindly just for the hell of it. There is no point in having 2 or 3 supermarkets in every centre if there are not enough customers to support them. If there happens to be one supermarket in a particular location it is not necessarily stifling competition in any way, particularly in a place like Canberra where you can pretty much drive for 5 minutes up the road to a different supermarket.

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