00:00:01
[Music]
00:00:02
have a got this it's one of the smaller
00:00:04
trolleys too this just cost me almost
00:00:08
$400 this is absolute
00:00:11
joke Kohl's and Woolworths Australia's
00:00:15
big two Under
00:00:18
Fire there's no doubt we are paying
00:00:20
higher prices than we
00:00:23
should they've just become bigger and
00:00:25
bigger it's like they've got their hand
00:00:28
on your throat and just letting you
00:00:32
breathe insiders are speaking out if
00:00:36
you're not willing to play their game
00:00:38
it's a lot of
00:00:39
intimidation so how would you categorize
00:00:41
a special a little bit like a
00:00:45
drug their million dooll CEOs on the
00:00:48
defensive he says that's the definition
00:00:50
of price
00:00:52
gouging I think I'm done guys you're
00:00:56
walking out
00:00:57
[Music]
00:00:58
really
00:01:01
successive Australian governments have
00:01:03
allowed coals and wool wor to increase
00:01:05
their Market power now we expose the
00:01:08
tactics they use to keep prices high and
00:01:11
competitors
00:01:13
out first it was the farmers who felt
00:01:16
the pinch do we want then Supermarket
00:01:19
workers and finally it's you the
00:01:22
consumer being squeezed by this powerful
00:01:28
duopoly
00:01:30
[Music]
00:01:44
[Music]
00:01:45
from the city to the
00:01:48
suburbs in country towns they are part
00:01:51
of our
00:01:53
landscape Kohls and
00:01:57
Woolworth we're told they are the fresh
00:01:59
food people the home of everyday low
00:02:02
prices teenagers they are family dinners
00:02:05
and back to school snacks machine our
00:02:08
most trusted Brands who have always sold
00:02:10
themselves as being firmly on the
00:02:12
consumer side value the Australian
00:02:15
weight but over the last year this
00:02:17
narrative has fractured and consumers
00:02:20
are
00:02:22
angry two packets of chips for
00:02:25
$11 I thought maybe it's wrong I just
00:02:28
spent $46 on making a lasagna like
00:02:31
lasagna ingredients and I already had a
00:02:33
[ __ ] half the ingredients half price
00:02:35
was
00:02:36
$19 no wasn't
00:02:39
$161 you absolute
00:02:43
[Music]
00:02:46
[ __ ] this tradeing Supermarket
00:02:49
sector is stunningly concentrated when
00:02:52
you get this much concentration you're
00:02:54
going to get higher prices it's just a
00:02:56
straight causal relationship uh proved
00:02:59
everywhere
00:03:00
so I think that's quite
00:03:03
clear as head of the A C Rod Sims spent
00:03:06
11 years battling the big two
00:03:09
competition policy is a bit like trying
00:03:11
to walk up the down escalator if you're
00:03:14
not really moving forward and pressing
00:03:16
ahead you're going to go backwards and
00:03:18
we stopped moving ahead 20 odd years
00:03:22
ago it wasn't always this
00:03:26
way Kohl's and Woolworth started out as
00:03:29
variety
00:03:31
stores in the late 1950s when they moved
00:03:34
into groceries and fresh produce there
00:03:36
were 21 other retailers vying for
00:03:39
customer dollars but within just a few
00:03:42
years with their new self-served
00:03:43
Supermarket model they had cornered
00:03:45
around 20% of the market and this
00:03:48
concentration already had suppliers
00:03:50
especially Farmers
00:03:53
worried some of them of course are very
00:03:55
frightful this is being done at the cost
00:03:56
of their independence but you in fact
00:03:58
will tell them what to grow and and when
00:04:00
and how now that is certainly not the
00:04:02
case the grow is completely independent
00:04:04
he is able to deal with us if he chooses
00:04:05
and if it suits him but on the other
00:04:07
hand if you're the only people to deal
00:04:08
with uh he hasn't got much Choice has he
00:04:10
no that would be true but it is most
00:04:12
unlikely that we will ever be the only
00:04:14
people to deal
00:04:21
with by the late 1970s Kohl's and
00:04:24
Woolworth's market share had doubled to
00:04:26
nearly
00:04:27
40% with a rise in shopping malls built
00:04:30
around a central
00:04:33
Supermarket most of this market share
00:04:35
was acquired even before Australia had
00:04:38
competition
00:04:39
[Music]
00:04:41
laws they went on to buy out competitors
00:04:44
like Boo Safeway action and dozens of
00:04:48
Franklin
00:04:49
stores as the New Millennium approached
00:04:52
they' submitted their position as the
00:04:54
purveyors of convenience a duopoly was
00:04:58
born
00:05:01
we have allowed these corporations turn
00:05:04
a blind eye over a very long period of
00:05:06
time almost like boiling the Frog over a
00:05:09
very long time that they've just become
00:05:11
bigger and
00:05:14
bigger Co and woor now control 65% of
00:05:18
the grocery Market Aldi has just 10%
00:05:22
with Independence like IG making up the
00:05:26
rest that means on average for every 10
00:05:29
Australians pay for groceries $650 of
00:05:33
that is spent at Kohl's and Woolworth
00:05:36
and just $1 at
00:05:39
Aldi by contrast in the UK there are
00:05:42
five major players vying for a cut of
00:05:45
that
00:05:46
$10 and in the US there are multiple
00:05:49
Supermarket chains in the
00:05:52
mix together Kohl's and Woolworth have
00:05:55
almost 2,000 stores across Australia
00:05:58
generating 8 $84 billion in
00:06:03
Revenue this Market power has led to
00:06:05
accusations of profiteering exploiting
00:06:08
suppliers and taking advantage of
00:06:10
consumers at a time when the cost of
00:06:12
living is spiraling as prices rise the
00:06:16
big 2 supermarkets have revealed record
00:06:18
profits Kohl's and Woolworths both
00:06:21
reported profits of more than a billion
00:06:23
dollars this year and increased their
00:06:25
gross profit
00:06:26
margins after years of inaction politic
00:06:29
from all sides are now talking about
00:06:32
taking on the
00:06:33
duopoly when you have this march Market
00:06:35
power you need a big stick over the top
00:06:37
of them and it's time now how you going
00:06:40
welcome
00:06:41
back there are six inquiries and reviews
00:06:44
targeting the
00:06:45
duopoly today I announced that the
00:06:48
treasurer will be directing the A C to
00:06:51
conduct a 12-month price inquiry into
00:06:54
the supermarket industry it is time that
00:06:58
green Senator Nick mck is leading a
00:07:00
senate inquiry into Supermarket pricing
00:07:03
and it's time that we hold the CEOs in
00:07:05
and ensured that those CEOs are called
00:07:09
to account for their pricing
00:07:11
practices just watch your head
00:07:14
there the CEOs are quick to argue
00:07:17
they're not profiteering at the expense
00:07:19
of
00:07:21
customers do you think your profits are
00:07:24
excessive no I think they are fair in
00:07:28
the context of
00:07:30
the investment that goes into the
00:07:31
business every year and the performance
00:07:34
uh of of our team when you look at our
00:07:36
return on investment it's sort of in the
00:07:38
middle of the ASX so you know is the
00:07:41
question did we drive profit by uh
00:07:44
jacking up prices the answer is no it's
00:07:47
really important that uh businesses like
00:07:50
Kohl's are profitable
00:07:52
Enterprises uh we employ over
00:07:55
120,000 team members we support over
00:07:59
,000 suppliers and we also need to
00:08:03
invest in the business to keep it
00:08:05
growing uh over
00:08:08
[Music]
00:08:11
time the evidence over time is that
00:08:13
Kohl's and wers had some of the highest
00:08:16
margins in the world for supermarkets
00:08:19
historically they've been very
00:08:22
profitable supermarkets in comparison to
00:08:28
overseas
00:08:29
Woolworth's latest annual report shows
00:08:31
its cost of doing business was flat but
00:08:34
its profit margin from selling groceries
00:08:36
Rose from
00:08:38
5.3% to
00:08:40
6% that may sound like a small increase
00:08:43
but it was worth an extra
00:08:45
$318 million in profits last year
00:08:51
alone there are many things that go and
00:08:53
drive the delivery of that result it's a
00:08:57
lot of hard work in productivity and
00:08:59
investment it's hard to see how you
00:09:02
haven't used the cover of
00:09:04
inflation to drive price increases above
00:09:08
that and that's what most people would
00:09:11
see as price gouging we certainly
00:09:13
haven't done it I personally
00:09:15
have I've reviewed the supply cost
00:09:18
increases which we would have to agree
00:09:21
in many cases would have been legitimate
00:09:24
if we look at price of fertilizer what
00:09:26
happened with International Freight
00:09:27
their own wage issues their own
00:09:29
disruption issues and our prices on the
00:09:31
Shelf that's the question you really
00:09:33
asking to be precise between the price
00:09:35
on the shelf and the cost increase from
00:09:37
the supplier those have been in lock
00:09:41
step Cole saw a small increase in its
00:09:44
cost of doing business last year pushing
00:09:46
its profit margin down slightly to
00:09:49
4.8% but that margin is still higher
00:09:52
than its peers in the
00:09:56
UK so there were quite often comp
00:09:59
comparisons that are made between the UK
00:10:01
and Australia uh but Australia has about
00:10:04
a third of the population of the UK uh
00:10:08
but we operate stores on a geographic
00:10:11
footprint which is 30 times the size and
00:10:14
so those considerations need to be taken
00:10:17
into account when those margins are
00:10:26
[Music]
00:10:27
compared the there's always been a lot
00:10:29
of debate around the numbers and it's
00:10:32
difficult to compare across countries
00:10:35
but it's harder to argue about the
00:10:37
market power of the big
00:10:40
[Music]
00:10:47
two I'm in the New South Wales town of
00:10:49
orange to meet Cherry farmer Michael Cal
00:10:53
hey Michael angos hi hey nice to meet
00:10:56
you good to meet you yeah thanks for
00:10:58
having us
00:11:04
good morning I've come on a busy day
00:11:07
he's preparing to Pick and Pack this
00:11:09
year's Cherry crop we had a little
00:11:12
little lull with weather as well and um
00:11:15
now we're getting ramping back into it
00:11:19
could I get you to roll the
00:11:22
stickers and I'll just print one more
00:11:24
Batch off if you don't
00:11:27
mind
00:11:29
this Orchard has been in the cial family
00:11:31
for three
00:11:33
generations my grandfather came over
00:11:36
from Italy after the second world war
00:11:38
and they got enough money to put a
00:11:41
deposit down on a place you know they
00:11:42
would work hard for um from sun up to
00:11:45
sun down or even more there was profit
00:11:54
there Michael Cal is one of the few
00:11:57
Growers willing to speak with us
00:12:00
he's getting out of the industry this
00:12:02
year's crop will be the Family's
00:12:05
last why is the profit not there we're
00:12:08
Reliant now on on two major supermarkets
00:12:11
really to buy all of our fruit we're at
00:12:15
the mercy of them we're price takers so
00:12:19
The Profit just isn't there
00:12:21
anymore it gets to you a little bit cuz
00:12:23
these are beautiful young trees and
00:12:26
they're just coming to perfect
00:12:29
production uh you know this is five six
00:12:32
years after planting
00:12:34
so yeah it's going to be a huge shame to
00:12:37
see such fantastic trees and you know
00:12:40
all that effort just getting pushed into
00:12:41
a
00:12:43
pile it's like they've got their hand on
00:12:45
your throat and just letting you
00:12:49
breathe Cal stopped selling into coals 2
00:12:52
years ago he's opened his books for
00:12:55
us well there's a huge power imbalance
00:12:58
you know you've got hundreds and
00:13:00
hundreds of Growers trying to sell to
00:13:02
two main
00:13:03
supermarkets so they're dictating the
00:13:07
price they're controlling what's being
00:13:10
bought for how much so it's it's a
00:13:14
tricky
00:13:17
situation his books show that in the
00:13:20
2022 growing season he sent 11 shipments
00:13:23
to Coal's via a third
00:13:26
party he made a small profit
00:13:29
on four deliveries early in the
00:13:31
season for his next seven deliveries
00:13:34
Michael kial went from just breaking
00:13:36
even to losing substantial money and on
00:13:40
one of those occasions his cherries were
00:13:43
rejected
00:13:46
outright would they ever tell you why it
00:13:48
was rejected there's multiple things to
00:13:50
reject fruit and you know they can pick
00:13:52
something out of the air and say no we
00:13:55
don't like it because of this and did
00:13:57
you have any power to say I disagree
00:14:00
with that absolutely no par at all no no
00:14:04
we we just have to cop it uh unless you
00:14:07
wanted to be sort of
00:14:09
blackbanded one example stands out
00:14:12
towards the end of that season coal sent
00:14:15
15 Tons of cherries to be sold at Kohl's
00:14:18
an entire semi-trailer load he hoped to
00:14:21
receive around
00:14:22
$9,000 for his biggest shipment of the
00:14:25
year which had been carefully graded to
00:14:27
meet kohls's
00:14:30
specifications instead he was told the
00:14:32
fruit was not up to standard and he was
00:14:35
only able to get
00:14:37
$5,800 on the seconds
00:14:40
Market when you're dealing with
00:14:42
thousands and thousands of pieces of
00:14:44
fruit you can pick 10 pieces out and say
00:14:47
this is no good so that is power that's
00:14:51
Market power when you can simply reject
00:14:54
something for no great reason would you
00:14:57
acknowledge that there is a lack of
00:15:01
transparency in how fresh produce is
00:15:04
purchased we enter into seasonal
00:15:07
commitments with our supplier and I
00:15:09
don't I don't know if this is a supplier
00:15:11
uh to calls but with our suppliers our
00:15:14
fresh Pro supplies we will enter into a
00:15:16
seasonal contract isn't there a huge
00:15:18
power and balance there that once the
00:15:20
fruit is sent off they have very little
00:15:22
Choice other than to take the price that
00:15:25
they're
00:15:26
given so as I said earlier we work
00:15:30
closely with our suppliers because we
00:15:32
know our suppliers have to be successful
00:15:34
for us to be
00:15:36
[Music]
00:15:40
successful fruit and vegetables are
00:15:42
crucial for the big two they're the
00:15:44
first thing you see when you enter a
00:15:46
store the retailers need to be able to
00:15:49
offer apples and pears and all the
00:15:51
Horticultural products at a very very
00:15:52
good price to get customers through the
00:15:55
door and that means that they will put
00:15:56
an extraordinary level of pressure
00:15:59
on The Growers at to buy super super low
00:16:02
prices can I give you a run through how
00:16:05
the weekly buying process Jeremy Griff
00:16:06
sits on the horiculture council at the
00:16:08
national Farmers Federation he says
00:16:11
Kohl's and Woolworth's Market power is
00:16:13
having a profound impact on the
00:16:16
industry we have estimated in the last
00:16:19
12 months alone that we've taken the
00:16:21
bulldozers to 15% of the Australian pear
00:16:24
Orchards that's a remarkable number 34%
00:16:27
of vegetable grows interviewed said that
00:16:29
they wanted to get out of the sector in
00:16:31
the next 12 months the average age of
00:16:33
grows and you would have seen this in
00:16:34
your travels you know it's way too old
00:16:36
because no young person sees a future in
00:16:38
this industry it's a massive massive
00:16:40
issue we just need change you know
00:16:43
that's the ultimate that's where we are
00:16:45
at this point in time we can't keep
00:16:46
doing
00:16:49
[Music]
00:16:55
this well fresh food is the bait to get
00:16:58
people through through the door your
00:17:00
typical Kohl's or Woolworth store has
00:17:02
more than 20,000
00:17:06
items and if you really want to
00:17:09
understand how the big retailers operate
00:17:11
you need to speak with someone like
00:17:13
Julian
00:17:14
hilard he spent 38 years in retail
00:17:18
including working as a buyer and what's
00:17:20
known as a category manager for both
00:17:22
Coal's and
00:17:24
Woolworth he's bought everything from
00:17:26
cereal to nappies to laundry
00:17:29
detergent it's your job to pick that
00:17:31
right assortment that right mix of
00:17:34
products that's going to um maintain the
00:17:36
customer satisfaction suit all their
00:17:38
needs and obviously assist you in in
00:17:42
achieving your targets is there pressure
00:17:44
to hit those targets uh there's always
00:17:46
pressure to hit targets there's sales
00:17:48
targets there's uh margin targets uh
00:17:51
there's market share targets then
00:17:53
there's profit dollar targets so
00:17:55
definitely uh lots of ways that you're
00:17:58
perform performance would be
00:18:01
assessed this might give you the
00:18:03
impression that Kohl's and Woolworth are
00:18:05
in a fierce price War but that's not how
00:18:08
the duopoly
00:18:10
works there's a term called Coal's worth
00:18:13
mhm what does that mean to you I think
00:18:16
it's a generic term people use to
00:18:19
describe the fact that there's not a lot
00:18:20
of difference between coals and wwth how
00:18:22
closely do Kohl's and WW worths track
00:18:24
each other on price they're more less
00:18:28
identical in many respects both
00:18:31
organizations would have teams of people
00:18:33
that would be checking prices to ensure
00:18:35
that you were not exceeding what was I
00:18:39
guess deemed to be the uh acceptable
00:18:42
price in the marketplace so he saying
00:18:44
when you worked for woor and Coal's put
00:18:46
a price up you'd follow pretty quickly
00:18:48
afterwards that would normally be the
00:18:51
case I would probably say that you know
00:18:54
if you did five shops in Woolworth and
00:18:57
five shops in Co
00:18:59
and you spent $100 you'd be a few cents
00:19:01
difference maybe depending on the
00:19:04
specials the fact is little difference
00:19:06
on Price is something that even Cole's
00:19:09
CEO Leah wet concedes you do price batch
00:19:13
with wwor do you we certainly have as
00:19:15
one of our considerations when we set
00:19:17
price is what is the price of the other
00:19:18
retailers not just wwor but all other
00:19:20
retailers in the market that compete in
00:19:22
the category that we're looking at are
00:19:25
you familiar with the term cworth
00:19:28
I'm
00:19:32
[Music]
00:19:35
not without the distraction of a price
00:19:38
War the big two can instead focus on
00:19:40
pumping up their profit margins to
00:19:42
satisfy the share
00:19:44
market and it's suppliers who bear the
00:19:47
brunt of this they say Kohl's and
00:19:50
Woolworths play the game
00:19:57
ruthlessly
00:19:59
it's absolutely ridiculous the margins
00:20:01
that they make the tactics that they
00:20:04
deploy one industry Insider has had
00:20:07
enough and is now speaking
00:20:09
out you're essentially at their Mercy in
00:20:13
terms of how they want to deal with you
00:20:16
what kind of money they want and they
00:20:18
can make Brands overnight and they can
00:20:20
destroy Brands overnight that's the
00:20:22
reality because of their Market power
00:20:24
and
00:20:25
concentration he's asked not to be
00:20:27
identified
00:20:29
because he works for a company currently
00:20:31
supplying into kl's and
00:20:33
Woolworth if you're not willing to play
00:20:36
their game it's a lot of intimidation
00:20:39
jacking up prices or deleting it from
00:20:41
the shelf and forcing customers to
00:20:43
essentially go buy your competitor's
00:20:46
product he says Kohl's and Woolworth are
00:20:48
always looking to increase their profit
00:20:51
margins he cites a recent email exchange
00:20:54
with a Cole's buyer where he asked for a
00:20:56
price increase initially he rejected or
00:21:00
said I can't accept this cost increase
00:21:03
based on the current climate and the
00:21:07
impact on consumers experi the CO's
00:21:09
buyer argued the increase of around 5%
00:21:12
wasn't Justified that's where the
00:21:15
negotiations started and we ended up
00:21:17
giving a lump sum of money to get the
00:21:19
price increase through which was
00:21:21
accepted in full so you're saying that
00:21:25
they will validate your price increase
00:21:27
if you give them either more margin or a
00:21:30
lump sum of money correct that lump sum
00:21:33
was
00:21:35
$25,000 towards promotions the CO's
00:21:38
buyer's initial concern for the consumer
00:21:41
had been quickly
00:21:44
[Music]
00:21:45
forgotten there are other costs for
00:21:47
suppliers wanting to do business with
00:21:50
the big two including in-house
00:21:53
advertising a full page addin
00:21:55
Woolworth's Fresh Magazine will cost
00:21:58
$30,000 a 4-we spot on Cole's radio
00:22:03
28,000 and these all contribute to
00:22:05
higher prices for customers at the
00:22:08
checkout they're the ones that are
00:22:10
getting screwed it just means higher
00:22:13
prices at the Shelf because the
00:22:15
supermarkets are extremely greedy why do
00:22:18
you want to speak
00:22:20
out I honestly think it's the right
00:22:23
thing to do I think the current
00:22:24
Situation's gotten extremely out of hand
00:22:28
you go to the supermarket you buy a few
00:22:30
items you're already talking $75 to
00:22:32
$100 a lot of Aussies are struggling out
00:22:35
there so you have an email from one
00:22:38
supplier we have over 8,000 suppliers
00:22:41
that we work with we have a team of
00:22:44
people whose job it is to look to
00:22:46
validate cost price increases uh and we
00:22:49
take that job very seriously he says
00:22:51
that's the definition of price
00:22:56
gouging
00:22:59
is that the case we don't engage in
00:23:01
practices like that we're working so
00:23:03
you're saying
00:23:04
absolutely that this is not a practice
00:23:07
that you engage in to use a price
00:23:11
increase to increase your margin or your
00:23:13
bottom line in another way I would need
00:23:16
to see the specifics of any particular
00:23:18
scenario to judge whether it's
00:23:20
reasonable or not what we have certainly
00:23:22
seen is that there has been inflation in
00:23:25
cost bases kl's has not been immune to
00:23:27
that
00:23:28
the increases have been substantial over
00:23:30
the last couple of years and uh so some
00:23:33
of that does flow through to to the
00:23:38
consumer Woolworth denies using similar
00:23:41
tactics against its
00:23:44
suppliers when a supplier asks for a
00:23:46
price increase we would like to engage
00:23:48
to make sure it's based on true cost
00:23:50
increases and we do that in the context
00:23:53
of complying with the code and so you
00:23:55
know we're very keen to make sure we
00:23:57
don't par on anything more to our
00:23:58
customers than is
00:24:01
required as a buyer Julian hilard says
00:24:04
it was his job to put pressure on
00:24:07
suppliers certainly there would be
00:24:10
uncomfortable
00:24:11
conversations there's no question of
00:24:13
that now some people might classify that
00:24:15
as robust
00:24:17
business um discussion I guess if I felt
00:24:22
that someone had already given me
00:24:25
everything they could possibly give me
00:24:27
and I had to ask for more than
00:24:28
personally I felt that that was probably
00:24:31
a little a little bit um a little bit of
00:24:34
a
00:24:39
stretch The Establishment in 2015 of a
00:24:42
food and grocery code of conduct was
00:24:44
supposed to take some of this friction
00:24:47
out of the supermarket supplier
00:24:51
relationship under the code each
00:24:53
Supermarket points and pays for an
00:24:55
Arbiter to handle its complaints
00:24:59
the grocery code of conduct is quite
00:25:02
frankly a disgrace you have a code with
00:25:05
no penalties now let me just emphasize
00:25:08
that that is like having a speed limit
00:25:11
throughout one of our cities of 60 kilm
00:25:14
an hour that's the speed limit then
00:25:16
someone say what happens if I go 80
00:25:18
nothing there's no penalty so the laws a
00:25:21
joke the code of conduct is a
00:25:26
joke why do you think it is that
00:25:29
Woolworth has never had a single
00:25:32
complaint under the grocery code of
00:25:34
conduct uh I mean you know you would
00:25:37
have to go and ask suppliers why that's
00:25:39
well let me tell you let me tell you
00:25:40
your own Arbiter Helen McKenzie okay hel
00:25:44
yep has said that suppliers are
00:25:48
frightened to complain and that they
00:25:50
fear retribution look I think it's just
00:25:53
the nature of any relationship that
00:25:54
there's going to be that anxiety it's a
00:25:57
lot stronger word than anxiety so we
00:26:00
engage with us suppliers every week we
00:26:02
have robust conversations every week we
00:26:04
resolve issues every week it's only if
00:26:07
you can't do that that you go to a to to
00:26:10
a a code Arbiter or anything
00:26:13
else Kohl's had no complaints under the
00:26:15
code last Financial year and just five
00:26:18
in the previous two years on three of
00:26:21
those occasions it agreed to compensate
00:26:23
the
00:26:24
suppliers so they say they fear
00:26:26
retribution and so they would not make a
00:26:29
formal
00:26:30
complaint well that is not in line with
00:26:33
the culture that we have at cols uh and
00:26:37
that is why I think most issues are
00:26:39
actually resolved in the first instance
00:26:41
by our suppliers and our Farmers having
00:26:43
a conversation with our category teams
00:26:45
so you think it's working well I'm not
00:26:47
saying that anyone is not complaining
00:26:49
I'm saying that a lot of these issues
00:26:51
are getting raised with our category
00:26:53
teams and being worked
00:26:56
through
00:26:59
the food and grocery code of conduct is
00:27:01
now under review with a push to make it
00:27:03
mandatory and to impose fines on those
00:27:06
who breach it the federal government is
00:27:09
also reviewing Australia's competition
00:27:12
laws Brad banducci is adamant
00:27:15
competition is fierce even going as far
00:27:19
as talking up Rivals like
00:27:22
Aldi they've got 590 stores L they're an
00:27:25
amazing business uh they drive
00:27:28
incredible value they have 10% of the
00:27:30
market though that's not the percentage
00:27:32
they have they're in every community and
00:27:34
it makes customers have a choice between
00:27:36
a will whle koh's and an Aldi at minimum
00:27:39
and by the way just up the road is a
00:27:41
Costco warehouse sorry you're saying
00:27:43
that actually there is really robust
00:27:45
competition I mean r Sims the former
00:27:46
head of the A C says that we have one of
00:27:50
the most concentrated supermarkets in
00:27:52
the world is he lying it's not true and
00:27:55
it's it is not true this community over
00:27:58
here there will be three coal stores
00:28:00
within 2 km of it at least one Aldi
00:28:03
store a series of Independence ability
00:28:06
to within 24 hours have a quarter of our
00:28:09
store delivered to you by Amazon it is
00:28:11
an incredibly competitive market the
00:28:14
risk people have is sorry former head of
00:28:16
the competition commission
00:28:18
says his words are that we retired by
00:28:21
the way I I don't think you would impune
00:28:24
his integrity and his understanding of
00:28:26
competition law I'm saying the world has
00:28:28
got much more competitive he retired 18
00:28:31
months ago he's not okay let's we'll can
00:28:33
we take that out is that
00:28:35
okay I should I mean he he is retired
00:28:39
but I I shouldn't have said that Ang are
00:28:41
we going to leave it in there if we are
00:28:43
well I mean we're on the record you said
00:28:45
it I mean you know let's let's move on
00:28:48
but yeah yeah know I think I'm done guys
00:28:51
uh you know I do this with good intent
00:28:54
you know I don't do this with bad intent
00:28:56
you're walking out really no no no can
00:28:58
we just talk for a me just have a minute
00:29:16
weish let's keep
00:29:21
[Music]
00:29:23
going Australia we've never been more
00:29:26
excited because when you the
00:29:27
supermarkets are feeling the pressure it
00:29:30
means you're getting Great Value hands
00:29:32
down one tactic they've been using to
00:29:34
get the public back on side is the lure
00:29:36
of specials as seen in their slick
00:29:40
ads at wws we can help you spend less in
00:29:44
recent months the big two have both
00:29:45
announced storewide price cuts a pack
00:29:48
that's today's fresh food
00:29:51
[Music]
00:29:56
people
00:29:57
[Music]
00:30:00
I'm on my way to see Rosie Thomas the
00:30:03
campaign's director at
00:30:06
Choice I've brought some groceries with
00:30:09
[Music]
00:30:11
me so what can you tell us about these
00:30:15
ones ah I recognize these products so
00:30:17
these barbecue briquettes this is the
00:30:19
product where we caught Kohl's out
00:30:21
raising locked prices it was not just
00:30:24
one item where Kohl's had misled
00:30:26
consumers Band-Aids yes again there was
00:30:29
a locked price promise but then they put
00:30:31
up prices before they should have after
00:30:33
Choice complain to the A C about the
00:30:35
brickets Kohl's conceded there were 20
00:30:38
items where prices had not been locked
00:30:41
for as long as the retailer had promised
00:30:44
I'm surprised by this one cornflakes
00:30:46
yeah cornflakes are staple in so many
00:30:48
households and people were paying more
00:30:49
than they should have so Kohl's was
00:30:52
caught
00:30:53
red-handed they've started refunding the
00:30:57
amounts to any consumers who have flybys
00:31:00
accounts or um shopped online but there
00:31:03
will still be a large number of
00:31:04
consumers who bought these products in
00:31:06
store and unless they show up with
00:31:09
receipts they're not going to get
00:31:10
refunds and so we really want to know
00:31:12
what Kohl's is doing with that extra
00:31:14
money that it's held on to unfairly so
00:31:17
despite having misled the consumers on
00:31:19
20 occasions there's been no tangible
00:31:22
punishment for coals not yet other than
00:31:25
refunding the money which they shouldn't
00:31:27
have kept to begin with do you know how
00:31:29
much you've refunded we've we have
00:31:31
refunded substantially more than uh what
00:31:35
the benefit was uh to coals from the
00:31:37
increase in price and I think what's
00:31:39
important to me is that we have worked
00:31:42
hard to understand what went wrong with
00:31:44
the processes so uh that they don't
00:31:46
happen going forward can you give us the
00:31:48
figures of how much customers spent and
00:31:51
what you refunded I I don't think that's
00:31:53
appropriate that we we get into that
00:31:55
level of detail ch really really
00:32:00
cheapap here's the thing you need to
00:32:01
know about specials they're not really
00:32:04
that
00:32:05
special grocery suppliers and brands are
00:32:07
often expected to fund these promotions
00:32:10
not the
00:32:12
supermarkets that means suppliers need
00:32:14
to set their recommended retail price at
00:32:17
a higher level knowing they will have to
00:32:20
offer deep discounts for much of the
00:32:24
year I'm guessing that the normal price
00:32:27
of this is probably over
00:32:29
$30 uh in fact yes it is 31 it's on
00:32:33
special for
00:32:34
$1450 who would ever pay over $30 for
00:32:38
that item so why do they even have the
00:32:40
recommended retail price I guess they
00:32:43
have to set a price and then they'll
00:32:45
promote off it you might ask yourself or
00:32:47
I would ask myself you know would it be
00:32:49
better to have that sweet spot price
00:32:52
around about $22 and just sell it for
00:32:54
$22 every day the trouble with that is
00:32:57
uh it would then just blend into
00:32:58
everything else because it wouldn't have
00:33:00
the nice big flashy uh ticket on it uh
00:33:04
you are attracted to those tickets it
00:33:06
helps to drive people into supermarkets
00:33:10
it helps everyone feel that they're
00:33:12
getting a better deal so how would you
00:33:14
categorize a
00:33:16
special a little bit like a
00:33:22
drug behind the success of Kohl's and
00:33:25
Woolworth is a work force of more than
00:33:28
300,000 people they are two of
00:33:31
Australia's largest private sector
00:33:34
employers but the announcement of record
00:33:37
profits has caused friction on the shop
00:33:43
floor so I've decided to get a few
00:33:45
groceries on the way home through Cole's
00:33:47
click and collect yep here we are okay
00:33:50
going in here
00:33:55
now
00:34:01
well that was super easy Drive in 2
00:34:03
minutes later groceries in the back of
00:34:05
the
00:34:08
car but now I'm going to meet someone
00:34:10
who quite possibly helped Pick and Pack
00:34:13
my order hey how are you good how are
00:34:15
you how's your shift long yeah yeah long
00:34:19
it's a stifling day typical for this
00:34:21
time of year Anna tells me it's just as
00:34:24
hot inside her store as it is out here
00:34:28
so how hot did it get in there it got 34
00:34:31
35° it was 34° in there yeah 34 wow that
00:34:35
must be uncomfortable yeah it was it was
00:34:38
very uncomfortable it makes your job
00:34:39
harder to
00:34:40
do where Anna Works isn't any ordinary
00:34:43
coal Supermarket it's what's known as a
00:34:46
dark
00:34:47
store while it looks like a supermarket
00:34:50
with is a deli and bakery there are no
00:34:54
customers inside does doz of Staff fill
00:34:58
orders for delivery or click and
00:35:02
collect these photos show just how hot
00:35:05
it can get Kohl's wouldn't expect its
00:35:08
customers to endure temperatures of 34°
00:35:11
while they shop but for staff this is
00:35:14
just part of the
00:35:18
job I catch up with Anna again at
00:35:21
home every summer there's people who
00:35:23
feel dizzy every summer there's people
00:35:25
whose sweats just dripping off them and
00:35:27
they want to sit down but um you get a
00:35:29
15 minute break and a 5 hour shift so I
00:35:32
think it's not really enough
00:35:34
for 1 15 minute break doesn't really
00:35:37
allow you time to recover and then go
00:35:39
back to work and still keep up the same
00:35:42
Pace would you the pace Anna is talking
00:35:44
about is quick workers Gathering items
00:35:47
for online orders are timed and they're
00:35:50
are Target set there is an industry
00:35:53
standard of a pick rate of about 180
00:35:55
items per hour our Warehouse
00:35:57
particularly during busy periods will
00:35:59
push you to go above and beyond that
00:36:01
which might be 210
00:36:03
220 in the past they have displayed the
00:36:05
names of
00:36:07
Pickers um where the ones who are
00:36:10
falling behind the official pick rate
00:36:12
will be displayed in red how does it
00:36:14
make you feel being effectively publicly
00:36:16
shamed for not working hard enough it's
00:36:19
not fair to people different abilities
00:36:21
different different capabilities
00:36:23
different reasons for for what speed
00:36:25
they can maintain we prioritize um team
00:36:29
member safety as something that is
00:36:31
absolutely crucial uh in our business
00:36:35
and so ensuring that there is an
00:36:37
environment um including temperature
00:36:39
that is safe for our team member would
00:36:42
be something that um we would definitely
00:36:45
want to have a look at and understand
00:36:46
why that has happened is it acceptable
00:36:49
that your team members have to work in
00:36:51
35° heat and what I've said is I will
00:36:53
take away that issue and we will have a
00:36:55
look at it because it doesn't sound
00:36:59
right after the interview with four
00:37:01
corners Cole said it had put measures in
00:37:04
place to help employees on hot days
00:37:07
including providing them with chilled
00:37:10
neck
00:37:12
ties I'm here for
00:37:15
support Anna is part of the first
00:37:18
national strike by Supermarket workers
00:37:20
in Australian
00:37:22
history what do we want what do we want
00:37:27
they walked off the job several times
00:37:29
last year asking for better wages and
00:37:31
conditions when do we want
00:37:33
[Applause]
00:37:36
it Kohls is not just putting pressure on
00:37:39
staff and suppliers there's a whole
00:37:41
other area where the supermarket giant
00:37:43
is taking advantage of its Market power
00:37:47
it's using this power to push its own
00:37:49
products without being upfront with
00:37:55
consumers you may not realize it but
00:37:58
Kohl's is a big player in
00:38:00
[Music]
00:38:03
wine I've come to the Coleone vintage
00:38:06
sellers to pick up a bottle of red
00:38:09
there's no shortage of choice but like
00:38:11
many consumers I go from mid-price wine
00:38:14
at eye level just that one
00:38:16
[Music]
00:38:19
thanks so I decided on this one the two
00:38:22
churches preacher shz I really like the
00:38:24
label but what really got me was a story
00:38:27
on the
00:38:30
back it tells a tale of German
00:38:33
immigrants coming to South Australia of
00:38:36
two Lutheran priests who fell out and
00:38:39
built rival churches at opposite ends of
00:38:41
the same
00:38:44
Village online it's promoted as a tale
00:38:46
from the barasa valley where the priests
00:38:49
disagreed on almost everything except
00:38:51
the quality of grapes growing in the now
00:38:54
famous wine region
00:39:03
so I'm here in the braser to find out
00:39:05
where these grapes are
00:39:07
growing there it
00:39:20
is so this is it the Light Pass Emanuel
00:39:23
Church just like on the bottle here and
00:39:26
over there that's the Rival church it's
00:39:28
just such a great
00:39:30
[Music]
00:39:32
story is this the home of two
00:39:35
churches I couldn't tell you that from
00:39:38
this bottle Adrien Hoffman is a fifth
00:39:40
generation grape grower from the Barosa
00:39:42
and says there's no two churches
00:39:44
Vineyard around here I think they're
00:39:47
sort of misleading the consumer to a
00:39:49
certain degree it sounds like a barasa
00:39:51
story but um yeah you can't be
00:39:53
guaranteed it's Barosa fruit
00:39:55
unfortunately so so where is the home of
00:39:57
two Church's wine what about the address
00:39:59
on the back what does that tell me well
00:40:01
that's that's the first thing I'd sort
00:40:02
of go to you look at where it's produced
00:40:04
and um this says it's Hawthorne East
00:40:11
[Music]
00:40:17
victoriia so here I am in Suburban
00:40:19
Melbourne turns out this is the closest
00:40:22
there is to a home for the two churches
00:40:24
shz not that it says Coal's anywhere on
00:40:27
the bottle Cole says it has around 260
00:40:31
private label wines available through
00:40:34
its liquor
00:40:35
stores I mean the test under law is
00:40:39
would a reasonable consumer be misled
00:40:41
now if on the label of the bottle you're
00:40:44
telling a story that's unrelated to the
00:40:47
product then I think that runs a serious
00:40:50
risk of being
00:40:52
misleading why not put your name on it
00:40:54
why not say it's Cole shardy or
00:40:56
Supermarket shz why are you hiding the
00:40:59
fact that you own this brand so uh in
00:41:02
terms of communicating uh with customers
00:41:06
um there are practices across many
00:41:08
retailers and many Industries where take
00:41:10
that point shouldn't you say shouldn't
00:41:12
you be honest with the consumer and say
00:41:15
this is a Kohl's wine but why do it
00:41:18
we're very comfortable that The Branding
00:41:21
approach that we have in our liquor
00:41:23
Brands is one that resonates with
00:41:25
customers
00:41:26
after our interview Kohl's removed any
00:41:29
reference to the brussa from its online
00:41:32
promotion of two
00:41:38
churches from Prime shelf space to Prime
00:41:42
real estate there's a more fundamental
00:41:44
issue stifling competition in this
00:41:47
country access to
00:41:50
land an industry Insider has told Four
00:41:53
Corners about a tactic used to keep
00:41:56
competitors out it involves buying up
00:41:59
so-called spoiler sites right across the
00:42:03
country a prime example is on Sydney's
00:42:07
upper North
00:42:08
Shore Woolworth has spent almost a
00:42:11
decade trying to redevelop this Council
00:42:13
car park into a shopping center and
00:42:16
supermarket in exchange for access to
00:42:19
the land Woolworth is offering to build
00:42:22
a new library and Community Hall it's
00:42:25
already purchased three shops if
00:42:29
Woolworth gets the green light they'll
00:42:31
be part of the new shopping
00:42:34
complex but they also have the added
00:42:36
benefit of keeping Rivals
00:42:40
out I look it's a huge problem but you
00:42:43
can understand why it's happened Kohl's
00:42:45
and Woolworths want to maintain as
00:42:48
concentrated a market as possible
00:42:51
there's no doubt it's aimed at reducing
00:42:54
competition so therefore
00:42:57
you can say it's anti-competitive in
00:42:58
that sense uh
00:43:01
proving that is
00:43:05
tricky does Woolworths use land
00:43:08
acquisition or land banking as a way to
00:43:11
reduce competition so that's not
00:43:13
something we actively do we do in some
00:43:16
cases by land this is one of the pieces
00:43:18
of land we've bought and developed uh
00:43:20
but it's not a way of trying to drive
00:43:23
competition it'll be through we need to
00:43:25
store in new area and so you'll buy some
00:43:28
land and wait for the community to start
00:43:31
moving into the
00:43:32
area German Supermarket giant caland
00:43:36
would likely
00:43:37
disagree it halted plans to open
00:43:40
supermarkets here in
00:43:42
20120 a lack of suitable locations was
00:43:45
cited as one of the
00:43:48
[Music]
00:43:55
reasons
00:43:57
the government is making all the right
00:43:59
noises about tackling the power of coals
00:44:01
and
00:44:03
WW our government is prepared to take
00:44:06
action to make sure that Australians are
00:44:09
not paying $1 more than they should for
00:44:13
the things that they need all of these
00:44:15
processes are about one thing and that's
00:44:18
about seeing if we can exert more
00:44:21
competition but to actually bring down
00:44:23
prices it will need to implement reform
00:44:26
that previous governments have
00:44:28
[Music]
00:44:31
ignored former competition boss Rod Sims
00:44:34
says the A C needs greater powers to
00:44:37
block mergers making it harder for the
00:44:39
big two to gobble up Rivals buy land and
00:44:42
move into other
00:44:44
Industries I think there's no doubt if
00:44:46
you want lower Supermarket prices if you
00:44:49
want consumers to pay less for goods in
00:44:51
supermarkets change the merger
00:44:54
laws the the greens who are cheering the
00:44:57
upcoming Senate inquiry are exploring
00:44:59
more radical change including breaking
00:45:02
up coals and
00:45:04
wwor the acid test on the prime minister
00:45:09
is not going to be what reviews or what
00:45:12
processes he's prepared to put in place
00:45:14
it'll be what action he is prepared to
00:45:23
take whatever happens it's already too
00:45:26
late for Cherry grower Michael
00:45:31
coal so what do you do do you literally
00:45:34
put the bulldozer through here we just
00:45:35
get our bulldozer and start pushing yeah
00:45:39
just push them up into
00:45:40
[Music]
00:45:44
piles I don't mind people making money
00:45:46
everyone's got to make a little bit of
00:45:47
money on the way through but they're
00:45:51
just making so much it's it's getting to
00:45:53
the point you know the industry can't
00:45:56
absorb their
00:45:58
greed I don't know what the answer is
00:46:01
I'd like to know it because we would
00:46:04
keep reinvesting in our Orchards but I
00:46:09
can't see a huge Silver Lining so we're
00:46:12
we're out we're just getting out
00:46:24
yeah
00:46:29
[Applause]
00:46:38
[Music]
