Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

It’s all about priorities I guess

Mark Fletcher
July 16th, 2014 · 6 Comments

The Coalition parties made considerable noise about reining in the Coles and Woolworths prior to the election and I suspect this is, in part, what got small business supporting them. They have found time and money for projects such as $250M for chaplains in schools and the winding back of financial advice laws that were brought in as a result of poor and questionable advice that cost everyday Australians billions. They have not found time to rein in Coles and Woolworths and these two continue uncontrolled in their pursuit of independent small business retailers, like newsagents.

If ever the government was to demonstrate small business support it would be in reducing the market power of Coles and Woolworths.

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Category: Ethics · Newsagency challenges · Newsagency management

6 responses so far ↓

  • 1 Dennis Robertson // Jul 16, 2014 at 10:50 AM

    I agree with the sentiment in your last sentence.

    However, in order for any politician of any affiliation to believe they need to act to reduce the market power of the duopoly, they have to be confronted with a lobby group as powerful as the Finance Industry or the Pharmaceutical Industry.

    Mark, I don’t believe that will happen in our lifetimes. There is no way the Small Business Sector can do that because of it’s nature/structure.

    In many instances in our culture, the ‘giving of a fair go’ has disappeared.

    If you take the example in your post, giving a fair go to investors in the Financial Advice arena could mean introducing changes that see Financial Planners banned from any association with Institutions such as Banks. And Fin Planners to be paid by investors only on an hourly basis or annual retainer and banned from obtaining commissions or brokerage fees. Due to the powerful lobby group can you really see the Big Business Party (Coalition) introducing such protections for the average investor. Hardly. How strong is the lobby group for the investors? Clearly not strong enough to protect their own despite the ‘outrage’ surrounding the form of one of our big banks.

    Most of what is done by core leader group politicians is spin so there is no public outrage. Any politician with any sense of having a cause or reason for becoming one is easily rolled by the party.

    Just reading what I have written, it sounds quite cynical, but then I realised there are plenty of examples of pre-election spin that is never followed through, so perhaps the comments are realistic rather than cynical.

    Having said all that, I believe something will eventually be done to rein in the duopoly, but I can’t claim to know what the trigger will be.

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  • 2 June // Jul 16, 2014 at 12:22 PM

    Dennis, we are in SA and this week (you probably heard it on the news) the company, Rossiters, which has been family owned for over 100 years and has been supplying boots to the defence forces since GALLIPOLEE (1912) has lost
    their latest tender for boots to a Victorian company which is having the boots made offshore in Indonesia.
    Our state is struggling with the imminent closure of Holden and yet our government allows this sort of thing to happen.
    The price point was different (of course) but the lack of empathy for our own is startling.
    This company has 80 employees and they manufacture here in SA.
    I heard a question asked by Bob Katter in the House of Reps yesterday about it but the answer from the Minister for Defence (Johnston) was appalling.
    If we don’t support our meagre base of manufacturing in this country we will soon be seeing Asian wages instead of Australian wages.
    Labour certainly won’t want that but they are also to blame for the high wages that adds inordinately to the cost of manufacturing in Oz.
    The Coalition are so busy trying to spin their answers that they’ve forgotten all about us.
    It is impossible for us to lobby on our own behalf but I have been “lobbying”
    for many years for the ANF to have an approved lobbyist on their board to represent us in Canberra.
    The ANF have let us down badly in that regard (I no longer pay any fees to them because of it) but they should be across these issues of the duopoly and I have never heard of any outcomes, favourable to newsagents, being secured by the ANF.
    It is just another burgeoning bureaucracy
    that we don’t need.
    Bruce Bilson (small business minister) should be inundated with emails from the
    ANF, day after day – week after week – until there are outcomes which at least, acknowledge that the duopoly is a problem for small business.
    The fact that we still employ 80% of the workforce in this country gets little or no
    coverage, and we need to reach our own local members and bombard them with the facts.

    2 likes

  • 3 Dennis Robertson // Jul 16, 2014 at 3:02 PM

    June,

    funny thing you mentioning Rossi Boots, when I heard about the Indonesian manufactured boots getting the nod over Australian made ones, I was pretty cheesed off and determined to do my bit for them.

    Especially so given the rich history this small family business has for making boots for our soldiers for such an incredible span of years.

    Yep, and I reckon there wouldn’t even be a night-club bomb maker anywhere near Sir Donald Bradman Dr in good old Adelaide.

    Mark spoke correctly in saying it’s all about priorities and Rossi is another example. How do we get to this stage.

    Anyway, I had already set aside next Tuesday to pick up a fine pair of Rossi boots. Of the 50 styles on offer, I’m going for the 180 degree soft toe. Might even ditch the Asics.

    If anyone is interested, here’s a link to their web-site. Really good quality.

    http://www.rossiboots.com.au/

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  • 4 Gary // Jul 16, 2014 at 7:38 PM

    Council of small business has a interesting approach in dealing with the problem. This is an article published a couple of weeks ago

    “The Council of Small Business Australia (COSBOA) has called on major retailers Coles and Woolworths to voluntarily divest in order to free up competition and innovation in Australia.

    The call comes as part of COSBOA’s submission to the Harper Review – The first comprehensive review of competition laws and policy in Australia in more than 20 years. The review panel, headed by economist Professor Ian Harper, recently released its Issues Paper and has asked for stakeholder submissions before the final report, expected to be released in 12 months.

    “We have provided a range of recommendations and solutions, but the best way to solve this problem once and for all is to divest Coles and Woolworths,” says COSBOA CEO Peter Strong.

    “We understand that involuntary divestiture is unlikely and difficult, so we call upon the boards of Woolworths and Coles to voluntarily break themselves up into several companies. They should do this in a way that benefits their shareholders and frees up competition and innovation.

    “This is not just about competition between retailers; our submission highlights the negative effects on innovation and productivity that is currently occurring in Australia,” says Mr Strong.

    “One major cause is the stifling impact on the great innovators of Australia, small business people, by the domination of a few large companies. Our standard of living will decrease unless we can liberate our innovative spirit from the chains of mental bondage created by the overly powerful duopoly and large landlords.”

    Mr Strong points out that ACCC Chairman Rod Sims has also highlighted that productivity as an issue needs to be addressed and laments the loss of a pro-competition culture. Sims says innovation will come from competition, real competition, and the recommendations from the review must make competition free and fair.

    Mr Strong adds: “There are many other negative outcomes that come from this domination by a few, including effects on our culture. Small business people can enrich and grow our culture through their activities, while the big end of town can often be predictable and cultivate consumerism rather than a culture of community.”

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  • 5 Jonathan Wilson // Jul 18, 2014 at 12:39 AM

    Anyone who is interested in competition should read the ACCC submission to the competition review (its on the ACCC website as a PDF file). The ACCC really has a lot of good things to say about how to improve competition (things like getting rid of parallel import laws on books and DVDs and stuff)

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  • 6 Mark Fletcher // Jul 18, 2014 at 6:53 AM

    Here is a link to the submission Jonathan mentions: http://www.accc.gov.au/system/files/Harper%20Review%20-%20Issues%20Paper%20-%20ACCC%20Submission%20-%20FINAL%20%28for%20website%29%20-%2025%20June%202014%20%282%29.pdf It’s worth a read.

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