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Big two supermarket chains 'do over' little guys

In a speech to the National Press Club, John Cummings, chairman of the National Association of Retail Grocers, launched an attack on Woolworths and Coles. He accused them of having no interest in competition, of using their power to deny would-be competitors prime retail sites and of forcing farmers to accept minuscule profits for their products.

Between them, WOOLWORTHS and Coles have such  a large share of Australia's grocery market , they are able to "do over" food manufacturers daily, says the National Association of Retail Grocers.

In a provocative speech to the National Press Club entitled — "Woolworths and Coles: bad news for consumers, disastrous for business", on the 26th of march 2008, the chairman of The Association (NARG) John Cummings, launched an extraordinary attack on the two big chains, accusing them of having no interest in competition, of using their power to deny would-be competitors prime retail sites and of forcing farmers to accept minuscule profits for their products.  Mr Cummings suggested the two chains' grip on the sector pushed grocery prices higher than necessary.

Mr Cummings, whose organisation represents independent grocers and who personally owns three independent supermarkets in Perth, made it clear he had little faith in the ACCC's ability to reduce what he said was the unhealthy 80% share of the grocery market of Woolworths and Wesfarmers-Coles.

The chairman of the Australian Competition and Consumer Commission ACCC, Graeme Samuel, has accused him of misrepresentation.


Mr Cummings continued: "The Rudd Government had quite properly asked the  ACCC to enquire into grocery prices", but he was concerned that the commission had "form".
"As a matter of fact," he said, "It would appear the regulator has been sitting in the stands cheering on Woolworths and Coles side since 1974, as the growth in the market share has been constant and consistent,".

"The previous government asked the ACCC to report on petrol pricing and the best they could do was to come up with a report which said not much at all, and that in an industry with, effectively, only four product lines. What will they be able to make of an industry in which a major supermarket might carry 25,000 different product lines?" he said.

Mr Samuel responded to Mr Cummings attack, "If Mr Cummings wants to take issue with me, he should adopt an honest approach in his statements.  Mr Cummings and many others who have vested interests will have the opportunity to make their points in terms of witness submissions, and direct evidence at the public hearings of the inquiry," he said. "Their propositions, claims and submissions will be tested under rigorous examination."

The ACCC inquiry has already received 140 submissions. Public hearings — which will be held in every state and territory — begin next week in Sydney. Mr Samuel is due to report his findings to the Government by the 31st July.


More at www.theage.com.au/articles/2008/03/26/1206207208838.html