Lining up at the checkouts to get our cheap shots

Dick Smith
July 4, 2012
The Age

‘The evidence shows that by the time most of us get to the check-out, all we really care about is price.’

THE mysterious foreign bid for iconic retailer David Jones has fallen through, but it emphasises the vulnerability of some of our major retailers to cashed-up buyers.

With few opportunities for expansion in Europe or America, it is only a matter of time before buyers come knocking on Australian doors.

All of which puts into context the position of our dominant supermarket chains, Coles and Woolworths. There has been a lot of fuss recently about their power in the marketplace.

Ministers say they are too powerful, while the competition regulator, the Australian Competition and Consumer Commission, says it is investigating.

But don’t hold your breath that anything will change any time soon. The truth is that the big retailers are only doing exactly what they are supposed to do. Consumers want the low prices, shareholders want the fat profits and governments want the taxes.

I’ve had my differences with both chains, but does anyone really imagine they would be kinder to Australian suppliers or stock more local products if they were in foreign hands? Of course not.

If we are asked, most of us would say that we would prefer to buy Australian products and that we want to maintain a local food industry.

But the evidence shows that by the time most of us get to the checkout, all we really care about is price.

Last week, Fairfax newspapers reported that Italian tinned tomatoes now outnumber their Australian competitors by five to one in Australian sales.

Why? They cost half as much, mainly because of ”cheap, sometimes illegal, migrant labour and European Union subsidies”.

So the criticism of Coles and Woolies is really just a lot of hot air.

Growth has become the organising principle of our society. It’s so embedded in the culture that anyone who questions it is considered a bit of a crank. I am one who happens to think that in a world of finite resources, where the population continues to rise by a billion or so people every dozen years or so, we can’t keep growing forever.

But you’ll rarely read about it in the mainstream media. Few question the growth paradigm and only an exceptional politician would survive if he or she raised the issue.

Economists, meanwhile, consider the economy is some kind of magic pudding that keeps growing forever, and big business is seen as being more ”efficient” than small businesses.
So all the hand-wringing and wailing about the supermarket duopoly is just hypocritical nonsense.

For now, Woolworths and Coles remain Australian owned and the profits they make largely stay here.

But sooner or later, like most food businesses, they are likely to fall into the hands of foreign corporations for whom Australia will be just a minor territory of no special concern.

If we think things are bad now for suppliers, smaller competitors and consumers who value variety and Australian-made products, imagine what that might mean.

I do not suggest that we pull down the shutters, but as the world economy enters uncertain territory, we must make difficult decisions about putting Australian interests ahead of global corporations who are only concerned with quarterly growth and have no long-term interest in our future.

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