The dominance of Coles and Woolworths in the retail sector should be of concern to all Australians. Their manipulation of markets and the damage they are doing to our dairying and agricultural industries is a disgrace. They have the market power to force small suppliers into unsustainable contracts, and so drive more and more suppliers out of the supply chain.
The practices are similar to the predatory pricing practices of the transport industry some years ago, where large courier companies undercut rivals until they sent them broke then raised prices when the competition went out of business or were taken over. At least some large fines were imposed during that debacle.
Even the bastion of capitalism, the USA, have far better laws than Australia with regard to monopolies. In this country it’s the law of the jungle, you only have to watch the behaviour of the big four banks.
Coles have led this predatory pricing war, pricing milk at $1/litre, and forcing dozens of Queensland farmers out of business. Woolworths have followed suit, but are at least honest enough to admit that the prices are unsustainable.
Of course it’s not just the milk industry that is being ruined, the same applies to fruit and vegetables (along with other lines including fuel).
For instance customers have little choice in the varieties of fruit. There may be two varieties of bananas on offer, but they have to be of a large size, where the smaller varieties, which are often trashed, are a much sweeter type.
The toothless efforts of the ACCC, and the two Senate enquiries have achieved little in redressing the problem. This is of great concern: if the current Federal Government is so impotent in dealing with the big companies, one can only despair at what the opposition would do for their big business buddies.
The discounting arrangements may suit many consumers and the Supermarkets (it certainly won’t come out of company profits), but once again it is to the detriment of Australian industry as a whole. The consequence will be that the consumer will lose out with losses in quality of the goods and long term competition in supplying the market.
Ken Brown
