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

David vs Goliath Newsagents vs Australia Post

No government has a right to own and operate a retail channel which competes with independently owned small retailers. Especially when the government owned retail channel, in this case Australia Post, has a monopoly on the retail of postal products and have leveraged that monopoly driven traffic by moving into other products areas.

For more than 100 years stationery was dominated by newsagents (4,600 independently owned retail stores unique to Australia) and other retailers as was the greeting cards category. About 15 years ago Australia Post entered these marketplaces and have turned their government owned retail post offices into businesses which look, for the most part, like newsagencies.

This is the Government of Australia demonstrating their care for independently owned small retailers. It is obnoxious, offensive and killing small businesses. And the government does not care. They will say they do but lay out the facts and you will see they do not. They are happy for Australia Post to spread its competitive tentacles even further into space ably served by independent retailers.

Newsagents don’t have the luxury of monopoly traffic. They do not enjoy that protection bestowed by the Government on Australia Post. Australia Post claims 1.1 million daily visitors to its 4,477 stores. Newsagents, while having good foot traffic, cannot match the Post because we do not have the products which only they allow themselves to carry. Newsagents cannot claim to be an essential service and therefore get preferential rental agreements with landlords. We do not have the postal service logistics operation of backload stationery and other products around our network for a fraction of the commercial fees we pay.

The Government supports the continuation of the Australia Post monopoly because, as the sole shareholder, they are the beneficiary of the arrangement. They are conflicted in any decision they make about any small business channel competing with Australia Post. I appreciate it’s an emotive and simplistic view. However, walk in my shoes and then tell me I am wrong.

This same government facilitated the deregulation of newsagencies in Australia in 1999 and created a situation which today sees thousands more businesses selling newspapers and magazines (core products for newsagents) than in 1999.

My software company bought a retail business 9 years ago so that we could walk in the footsteps of our customers. We still own the business today. Right across from our shop is a Post Office – government owned. We do a promotion on printer ink cartridges. Australia Post does one. We fine tune our prices. They fine tune their prices.

This is our government competing with my tiny shop.

What right to they have in using their might to compete with my business?

We sought approval for a sign on the wall outside our shop the same size as that for Australia Post. Centre management refused.

If all they sold was postal products then I’d be happier. If they provided me with postal related products for reasonable margin so I could compete with their core products then I’d be happier.

The current situation stinks and politicians on both sides seem to lack any care. Australia Post is untouchable.

I’ll have more to say on this in future posts.

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