Milking the consumer

We’re stuck standing there all day, every day, just as willing, also being milked

I’M repulsed by the conditions of consumer welfare in Australia.

Animal welfare in Australia, as described by our government, is: “to ensure that due consideration is accorded to a multitude of factors (including science, practicability, culture, economics, ethics, societal values of the whole community, education and awareness, innovation and international developments)”.

It also adds that “these considerations are relevant to the establishment and promotion of sound animal welfare standards and will operate according to the open, consultative and consensual nature of Australia’s democratic, tolerant and pluralist society".

Comparatively, consumer welfare - as described by the government’s Competition and Consumer Act (CCA) 2010 - “is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”.

Now if that doesn’t make you want to get onto all fours and crawl out into the closest paddock, this will.

A dairy cow wouldn’t spend an hour a day being milked over two standings. No such luck for you and I - we’re stuck standing there all day, every day, just as willing, also being milked. And with emasculating Acts like the CCA in place, we’re not leaving the milking parlour for awhile yet.

And the cause of this attrition of our welfare? That devilish duopoly: Coles and Woolworths.

Master Grocers Australia and Liquor Retailers Australia (MGA/LRA) is advocating for amendments to two sections of the Act around misuse of market power and acquisitions that lessen competition –as well as a Mandatory Supermarket Industry Code on top of that. Of course they’ve their 2000 plus independent grocer members interests at heart, but I think you’ll find their cause is for the greater good of Australian consumer welfare.

Between the duopoly they’re reported to have 80 per cent of the market in Australia, whereas the five biggest supermarket chains take up about 40pc of sales in the United States. Comparatively, Woolworths has twice the market share than Walmart does in the US - and that’s just in packaged goods in the supermarket.

But it’s not all Pringles, Weetbix and Milo. Through Shell, Caltex, Dan Murphy’s, LiquorLand, Bunnings and all the rest (including Kmart, Big W and insurance retail businesses) the duo are supposedly the nation’s biggest guns in petroleum retail, liquor and hardware.

Don’t get me wrong - I like the flavour of a strong economy seasoned with the right amount of capitalism. But when my choice is greatly reduced, and I’m paying for it, I lose my appetite.

Tinned tomatoes are $1.72 for 400g and “old mate” up the road who grew them is getting about $0.04 for the four tomatoes that went in. But there’s no council or organisation in this “lucky country” to protect you, me or “old mate” from this kind of violation.

And there are no activists shouting about it as the consequences of these poor consumer welfare conditions don’t make for gut-wrenching, confronting - and consequently saleable - video footage. Unlike those bloody and beaten cows on a cement floor in Indonesia two years ago.

I’ve heard reports the duopoly have bent rules around “price-fixing” in the prime lamb market. This further sticks the boot into lamb farmers, commodity producers who are already price takers. But their greatest claim to fame is fast approaching: that the Aussie consumer may soon also be a “price taker” too. In a way, we already are, but they’re continuing to abolish our choice.

Meanwhile the ACCC say they’re “uncomfortable” about the duopoly, and that’s all.

It would seem it’s out of their jurisdiction and they can go back to reassuring people that internet banking is safe to use while the welfare of Australian consumers degrades at speeds no country has ever seen before.

I sincerely hope the MGA/LRA submission makes some ground for their members, not to mention the 22 million Australians who’d also benefit. It might even be good to see Independent MPs Katter, Wilkie and Xenophon make some waves with their Bill to divest the Goliath’s market share in Australia.

As for the “Mandatory Supermarket Industry Code”, it’s no longer mandatory, it’s voluntary, so the National Farmers Federation backed off with good reason - and of course the Minister for Agriculture has thrown his hands in the air, which is consistently in line with Labor’s (lack of) commitment to agriculture.

At least if the duopoly commit to a voluntary code overseen by the ACCC, we can rest assured that a few people with short-sighted tunnel vision can sleep at night.

We need a good dose of awareness, proper food labelling laws and to give support to those few about to head into battle.

What do you think?

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READER COMMENTS

Boonah Bob
20/08/2013 5:16:59 AM

Some one has to stick up for rural Australians. If the supermarkets continue to deny farmers a fair and sustainable income they will one by one disappear. Do not complain then about the poor quality of imports or the fact that foreigners are buying our farm land. The pollies from all sides huff and puff, but really they hope like hell it will go away, too hard for them. Wake up Australia the farmers are at the mercy of the dictating overpowering Coles/Woolworths. Consumers will be next, they will have to pay and pay through the nose they will.
ecnerwal
20/08/2013 5:54:22 AM

Consumers are already paying through the nose here Boonah. It is now cheaper to buy groceries in USA and UK than it is here.
Dickytiger
20/08/2013 7:50:11 AM

"I like the flavour of a strong economy seasoned with the right amount of capitalism. But when ... I’m paying for it, I lose my appetite." So you like a bit of socialism along with your capitalism, Sam? That's what you're saying. And how exactly are you paying for it? Consumer prices are falling, not rising. The ones rising are due to capitalism being elbowed out of the way to support things like renewable energy.
Cocky
20/08/2013 11:27:38 AM

Just goes to show the only future for our ag is to either export the whole lot to someone who appreciates our efforts or cut production to a level where they have to pay up. Otherwise it will just be more of the same and the harder we work and the better we get, the less we end up with.
Woody
20/08/2013 5:07:04 PM

Sam a couple of weeks ago you were having a crack at whinging farmers on issues like this. Now you change tack and state the obvious who's whinging now.
Sam's Dad
21/08/2013 3:32:22 AM

Fair point Woody, the real issue is being kept on the land by handouts, like where I am,the UK or being screwed by someone who can. Cheers
Sam_Trethewey
21/08/2013 6:25:20 AM

I've said it before, I'll say it again. YOU are where YOU are because of the choices YOU'VE made. Some people only see so much of the picture.... In this case, consumer choice is vanishing. And a large amount of the change required will have to come through consumers.
C4C
21/08/2013 7:44:28 AM

Sam is actually pointing out an issue that has huge ramifications for the Australian consumer’s future as well as the Ag sector. This is not whinging “Whinging by definition is to complain annoyingly about something that is relatively unimportant” - this issue IS really important. Only consumers can create the change that we need to see because quite clearly the duopoly are untouchable with their teams of lawyers that can find loop holes and take them right to the edge of any Act. They aren’t about consumer choice, they are about shareholder returns. continued....
C4C
21/08/2013 7:45:08 AM

There is a long tail effect to these duopoly price wars and it’s going to really hurt Australian consumers and producers. Sam, thank you for not giving up
qlander
21/08/2013 2:42:16 PM

C4C. A whinge is a complaint made by someone without power.
Get MuddyTo think clearly in farming and about farming, you need to get muddy - commit, roll up your sleeves and get involved. SAM TRETHEWEY gets stuck into some of the issues facing those on the land.

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