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(THEME MUSIC PLAYS)
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CUSTOMER: Have a go at this.
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It's one of the smaller trolleys
CUSTOMER: Have a go at this.
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It's one of the smaller trolleys
too.
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It's one of the smaller trolleys
too.
This just cost me almost $400.
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This just cost me almost $400.
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This is absolute joke.
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ANGUS GRIGG: Coles and Woolworths -
Australia's big two under fire.
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There's no doubt we are paying
higher prices than we should.
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They've just become
bigger and bigger.
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MICHAEL CUNIAL: It's like they've
got their hand on your throat
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MICHAEL CUNIAL: It's like they've
and JUST letting you breathe.
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and JUST letting you breathe.
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Insiders are speaking out.
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INDUSTRY INSIDER: If you're not
willing to play their game,
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INDUSTRY INSIDER: If you're not
it's a lot of intimidation.
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it's a lot of intimidation.
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So, how would you categorise
it's a lot of intimidation.
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So, how would you categorise
a special?
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So, how would you categorise
Oh...a little bit like a drug.
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Oh...a little bit like a drug.
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Their million-dollar CEOs
on the defensive.
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He says that's the definition
of price gouging.
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I think I'm done, guys.
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Uh...no...
You're walking out? Really?
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Successive Australian governments
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have allowed Coles and Woolworths
to increase their market power.
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Now we expose the tactics they use to
keep prices high and competitors out.
have allowed Coles and Woolworths
to increase their market power.
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Now we expose the tactics they use to
keep prices high and competitors out.
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First it was the farmers
who felt the pinch...
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PROTESTER: What do we want?!
..then supermarket workers...
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PROTESTERS: Now!
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..and finally it's you, the consumer,
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being squeezed
by this powerful duopoly.
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From the city to the suburbs,
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in country towns,
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they are part of our landscape -
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Coles and Woolworths.
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We're told
they are the 'fresh food people',
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We're told
the 'home of everyday low prices'.
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the 'home of everyday low prices'.
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VOICEOVER: Teenagers...
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They are family dinners
VOICEOVER: Teenagers...
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They are family dinners
and back-to-school snacks.
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They are family dinners
..eating machines.
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..eating machines.
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Our most trusted brands,
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who have always sold themselves
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as being firmly
who have always sold themselves
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as being firmly
on the consumer's side.
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as being firmly
Value the Australian way.
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Value the Australian way.
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But over the last year
this narrative has fractured,
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But over the last year
and consumers are angry.
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and consumers are angry.
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CUSTOMER:
and consumers are angry.
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CUSTOMER:
Two packets of chips for $11.
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CUSTOMER:
I thought, "Maybe it's wrong."
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I thought, "Maybe it's wrong."
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I just spent $46 on making a
lasagne, like, lasagne ingredients,
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and I already had
fucking half the ingredients.
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CUSTOMER: Half price. "Was $19."
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No, it wasn't. $16.10.
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You absolute arseholes.
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The Australian supermarket sector
is stunningly concentrated.
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When you get
this much concentration,
The Australian supermarket sector
is stunningly concentrated.
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When you get
this much concentration,
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When you get
you're going to get higher prices.
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you're going to get higher prices.
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It's just a straight causal
you're going to get higher prices.
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It's just a straight causal
relationship proved everywhere.
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So, I think that's quite clear.
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As head of the ACCC, Rod Sims
spent 11 years battling the big two.
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Competition policy
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is a bit like trying to walk up
the down escalator.
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If you're not really moving forward
and pressing ahead,
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If you're not really moving forward
you're going to go backwards.
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you're going to go backwards.
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And we stopped moving ahead
you're going to go backwards.
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And we stopped moving ahead
20-odd years ago.
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It wasn't always this way.
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Coles and Woolworths
started out as variety stores.
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Coles and Woolworths
In the late 1950s,
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In the late 1950s,
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when they moved into groceries
and fresh produce,
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there were 21 other retailers
vying for customer dollars,
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but within just a few years,
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with their new
self-serve supermarket model,
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they had cornered
around 20% of the market.
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they had cornered
And this concentration
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And this concentration
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already had suppliers,
And this concentration
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already had suppliers,
especially farmers, worried.
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ARCHIVE REPORTER: Some of them,
of course, are very frightened
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that this is being done
at the cost of their independence,
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that you, in fact, will tell them
what to grow and when and how.
that this is being done
at the cost of their independence,
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that you, in fact, will tell them
what to grow and when and how.
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that you, in fact, will tell them
No, that is certainly not the case.
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No, that is certainly not the case.
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The grower
is completely independent.
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He is able to deal with us
if he chooses and if it suits him.
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He is able to deal with us
if he chooses and if it suits him.
On the other hand, if you're
the only people to deal with,
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On the other hand, if you're
the only people to deal with,
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On the other hand, if you're
he hasn't got much choice, has he?
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he hasn't got much choice, has he?
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No, that would be true,
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but it is most unlikely
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that we will ever be
the only people to deal with.
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By the late 1970s
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Coles's and Woolworths's market share
By the late 1970s
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Coles's and Woolworths's market share
had doubled to nearly 40%,
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with a rise in shopping malls
built around a central supermarket.
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Most of this market share
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was acquired even before
Most of this market share
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was acquired even before
Australia had competition laws.
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They went on to buy out competitors
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like Bi-Lo, Safeway, Action
and dozens of Franklins stores.
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As the new millennium approached,
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they'd cemented their position
as the purveyors of convenience.
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they'd cemented their position
A duopoly was born.
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A duopoly was born.
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We have allowed
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these corporations
We have allowed
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these corporations
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turned a blind eye,
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over a very long period of time,
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almost like boiling the frog
over a very long time,
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almost like boiling the frog
over a very long time,
that they've just become
bigger and bigger.
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that they've just become
bigger and bigger.
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Coles and Woolworths now control
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65% of the grocery market.
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Aldi has just 10%,
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with independents like IGA
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making up the rest.
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That means, on average, for every
$10 Australians pay for groceries,
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$6.50 of that
is spent at Coles and Woolworths
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$6.50 of that
and just $1 at Aldi.
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and just $1 at Aldi.
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By contrast, in the UK,
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there are five major players
vying for a cut of that $10,
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and in the US there are multiple
supermarket chains in the mix.
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Together Coles and Woolworths have
almost 2,000 stores across Australia,
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Together Coles and Woolworths have
generating $84 billion in revenue.
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generating $84 billion in revenue.
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This market power has led
to accusations of profiteering,
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exploiting suppliers
and taking advantage of consumers
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at a time when the cost of living
is spiralling.
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at a time when the cost of living
NEWSREADER: As prices rise
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NEWSREADER: As prices rise
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the big two supermarkets
NEWSREADER: As prices rise
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the big two supermarkets
have revealed record profits.
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NEWSREADER: Coles and Woolworths
both reported profits
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of more than $1 billion this year
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and increased
their gross profit margins.
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After years of inaction
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politicians from all sides are now
talking about taking on the duopoly.
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When you have
this much market power,
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you need a big stick
over the top of them,
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and it's time now.
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How're you going, mate?
Welcome back.
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There are six inquiries and reviews
targeting the duopoly.
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Today I announced that the treasurer
will be directing the ACCC
There are six inquiries and reviews
targeting the duopoly.
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Today I announced that the treasurer
will be directing the ACCC
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Today I announced that the treasurer
to conduct a 12-month price inquiry
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to conduct a 12-month price inquiry
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to conduct a 12-month price inquiry
into the supermarket industry.
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into the supermarket industry.
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It is time that...
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Greens Senator Nick McKim
is leading a Senate inquiry
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Greens Senator Nick McKim
into supermarket pricing.
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into supermarket pricing.
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And it's time
that we hauled the CEOs in
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and ensured that those CEOs
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are called to account
for their pricing practices.
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are called to account
Just watch your head there, Leah.
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Just watch your head there, Leah.
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The CEOs are quick to argue
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they're not profiteering
at the expense of customers.
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Do you think your profits
are excessive?
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No, I think they are fair
in the context of the investment
Do you think your profits
are excessive?
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No, I think they are fair
in the context of the investment
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that goes into the business
every year
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and the performance of our team.
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When you look
at our return on investment,
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it's sort of
in the middle of the ASX.
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So, you know, is the question did we
drive profit by jacking up prices?
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So, you know, is the question did we
The answer is no.
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The answer is no.
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It's really important
that businesses like Coles
The answer is no.
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It's really important
that businesses like Coles
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are profitable enterprises.
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are profitable enterprises.
We employ over 120,000 team members,
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We employ over 120,000 team members,
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we support over 8,000 suppliers,
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and we also
need to invest in the business
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to keep it growing over time.
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(TRAFFIC DRONES)
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ROD SIMS: The evidence over time
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is that Coles and Woolworths
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had some of the highest margins
is that Coles and Woolworths
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had some of the highest margins
in the world for supermarkets.
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Historically, they've been
very profitable supermarkets
had some of the highest margins
in the world for supermarkets.
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Historically, they've been
very profitable supermarkets
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Historically, they've been
in comparison to overseas.
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in comparison to overseas.
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Woolworths's latest annual report
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shows its cost
of doing business was flat,
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but its profit margin from selling
groceries rose from 5.3% to 6%.
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That may sound
like a small increase,
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but it was worth
an extra $318 million in profits
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but it was worth
last year alone.
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last year alone.
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There are many things that go and
drive the delivery of that result.
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It's a lot of hard work
and productivity and investment.
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It's hard to see how you haven't used
the cover of inflation
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It's hard to see how you haven't used
to drive price increases above that,
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to drive price increases above that,
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and that's what most people
to drive price increases above that,
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and that's what most people
would see as price gouging.
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and that's what most people
We certainly haven't done it.
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We certainly haven't done it.
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I personally have...
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I've reviewed
the supplier-cost increases,
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which you would have to agree
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in many cases
would have been legitimate.
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If you look
at the price of fertiliser,
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what happened
with international freight,
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their own wage issues,
their own disruption issues,
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their own wage issues,
and our prices on the shelf -
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and our prices on the shelf -
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that's the question
you're really asking.
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To be precise,
between the price on the shelf
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and the cost increase
from the supplier -
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and the cost increase
those have been in lockstep.
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those have been in lockstep.
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Coles saw a small increase in
its cost of doing business last year,
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pushing its profit margin
down slightly to 4.8%.
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But that margin is still higher
than its peers in the UK.
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But that margin is still higher
(BARKS)
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(BARKS)
241
00:10:09,220 --> 00:10:11,900
So, there are quite often
comparisons that are made
242
00:10:11,900 --> 00:10:14,380
between the UK and Australia.
243
00:10:14,380 --> 00:10:19,860
But Australia has about a third
of the population of the UK,
244
00:10:19,860 --> 00:10:20,100
But Australia has about a third
but we operate stores
245
00:10:20,100 --> 00:10:21,820
but we operate stores
246
00:10:21,820 --> 00:10:26,180
on a geographic footprint
which is 30 times the size,
247
00:10:26,180 --> 00:10:29,300
and, so, those considerations
need to be taken into account
248
00:10:29,300 --> 00:10:29,540
and, so, those considerations
when those margins are compared.
249
00:10:29,540 --> 00:10:31,220
when those margins are compared.
250
00:10:40,540 --> 00:10:43,820
There has always been a lot of debate
around the numbers,
251
00:10:43,820 --> 00:10:47,260
and it's difficult
to compare across countries.
252
00:10:47,260 --> 00:10:52,620
But it's harder to argue about
the market power of the big two.
253
00:10:59,580 --> 00:11:02,140
I'm in the New South Wales town
of Orange
254
00:11:02,140 --> 00:11:04,580
to meet cherry farmer Michael Cunial.
255
00:11:04,580 --> 00:11:06,180
Hey, Michael.
256
00:11:06,180 --> 00:11:08,660
Angus, hi.
Hey. Nice to meet you.
257
00:11:08,660 --> 00:11:11,180
Good to meet you.
Yeah. Thanks for having us.
258
00:11:11,180 --> 00:11:15,060
(INDISTINCT CHATTER)
259
00:11:16,020 --> 00:11:17,620
Good morning!
260
00:11:17,620 --> 00:11:19,220
I've come on a busy day.
261
00:11:19,220 --> 00:11:19,460
He's preparing to pick and pack
I've come on a busy day.
262
00:11:19,460 --> 00:11:22,700
He's preparing to pick and pack
this year's cherry crop.
263
00:11:22,700 --> 00:11:26,180
We had a little lull with weather
as well,
264
00:11:26,180 --> 00:11:26,420
We had a little lull with weather
and now we're ramping back into it.
265
00:11:26,420 --> 00:11:29,940
and now we're ramping back into it.
266
00:11:31,100 --> 00:11:33,900
Could I get you
to roll the stickers?
267
00:11:34,900 --> 00:11:39,180
And I'll just print one more batch
off, if you don't mind.
268
00:11:40,940 --> 00:11:45,220
This orchard has been in the Cunial
family for three generations.
269
00:11:45,220 --> 00:11:49,780
My grandfather came over from Italy
after the Second World War,
270
00:11:49,780 --> 00:11:54,020
and they got enough money
to put a deposit down on a place.
271
00:11:54,020 --> 00:11:55,540
You know, they would work hard
272
00:11:55,540 --> 00:11:59,020
for, um...from sunup to sundown
or even more.
273
00:11:59,020 --> 00:11:59,260
for, um...from sunup to sundown
There was profit there.
274
00:11:59,260 --> 00:12:01,180
There was profit there.
275
00:12:06,740 --> 00:12:10,620
Michael Cunial is one of the few
growers willing to speak with us.
276
00:12:11,580 --> 00:12:14,020
He's getting out of the industry.
277
00:12:14,020 --> 00:12:18,340
This year's crop
will be the family's last.
278
00:12:18,340 --> 00:12:20,060
Why is the profit not there?
279
00:12:20,060 --> 00:12:24,180
We're reliant now
on two major supermarkets, really,
280
00:12:24,180 --> 00:12:24,420
We're reliant now
to buy all of our fruit.
281
00:12:24,420 --> 00:12:26,820
to buy all of our fruit.
282
00:12:26,820 --> 00:12:28,580
We're at the mercy of them.
283
00:12:28,580 --> 00:12:30,140
We're price takers,
284
00:12:30,140 --> 00:12:33,780
so, the profit
just isn't there anymore.
285
00:12:33,780 --> 00:12:34,020
so, the profit
It gets to you a little bit
286
00:12:34,020 --> 00:12:35,420
It gets to you a little bit
287
00:12:35,420 --> 00:12:37,780
because these
are beautiful young trees
288
00:12:37,780 --> 00:12:42,060
and they're just coming
to perfect production.
289
00:12:42,060 --> 00:12:44,820
You know, this is five or six years
after planting.
290
00:12:44,820 --> 00:12:48,580
So, yeah,
it's going to be a huge shame
291
00:12:48,580 --> 00:12:52,740
to see such fantastic trees
and, you know, all that effort
292
00:12:52,740 --> 00:12:54,980
just getting pushed into a pile.
293
00:12:55,860 --> 00:12:58,300
It's like they've got their hand
on your throat
294
00:12:58,300 --> 00:12:58,540
It's like they've got their hand
and JUST letting you breathe.
295
00:12:58,540 --> 00:13:00,060
and JUST letting you breathe.
296
00:13:01,740 --> 00:13:05,300
Cunial stopped selling into Coles
two years ago.
297
00:13:05,300 --> 00:13:05,540
Cunial stopped selling into Coles
He's opened his books for us.
298
00:13:05,540 --> 00:13:07,580
He's opened his books for us.
299
00:13:07,580 --> 00:13:10,340
Well, there's a huge
power imbalance.
300
00:13:10,340 --> 00:13:12,940
You know, you've got
hundreds and hundreds of growers
301
00:13:12,940 --> 00:13:16,100
trying to sell
to two main supermarkets.
302
00:13:16,100 --> 00:13:16,340
trying to sell
So, they're dictating the price.
303
00:13:16,340 --> 00:13:18,900
So, they're dictating the price.
304
00:13:18,900 --> 00:13:19,140
They're controlling
So, they're dictating the price.
305
00:13:19,140 --> 00:13:23,940
They're controlling
what's being bought for how much.
306
00:13:23,940 --> 00:13:24,180
They're controlling
So, it's a tricky situation.
307
00:13:24,180 --> 00:13:26,900
So, it's a tricky situation.
308
00:13:30,180 --> 00:13:31,860
His books show
309
00:13:31,860 --> 00:13:33,740
that in the 2022 growing season
310
00:13:33,740 --> 00:13:38,260
he sent 11 shipments
to Coles via a third party.
311
00:13:39,140 --> 00:13:44,340
He made a small profit on four
deliveries early in the season.
312
00:13:44,340 --> 00:13:45,980
For his next seven deliveries
313
00:13:45,980 --> 00:13:48,740
Michael Cunial
went from just breaking even
314
00:13:48,740 --> 00:13:48,980
Michael Cunial
to losing substantial money.
315
00:13:48,980 --> 00:13:51,700
to losing substantial money.
316
00:13:51,700 --> 00:13:56,780
And on one of those occasions
his cherries were rejected outright.
317
00:13:59,500 --> 00:14:01,260
Would they ever tell you
why it was rejected?
318
00:14:01,260 --> 00:14:03,420
There's multiple things
to reject fruit,
319
00:14:03,420 --> 00:14:06,020
and, you know, they can pick
something out of the air
320
00:14:06,020 --> 00:14:08,700
and say, "No, we don't like it
because of this."
321
00:14:08,700 --> 00:14:12,260
And did you have any power to say,
"I disagree with that"?
322
00:14:12,260 --> 00:14:12,500
And did you have any power to say,
Absolutely no power at all. No.
323
00:14:12,500 --> 00:14:14,940
Absolutely no power at all. No.
324
00:14:14,940 --> 00:14:15,940
No.
325
00:14:15,940 --> 00:14:16,180
We just have to cop it unless you
No.
326
00:14:16,180 --> 00:14:20,540
We just have to cop it unless you
wanted to be sort of black-banded.
327
00:14:22,260 --> 00:14:24,460
One example stands out.
328
00:14:24,460 --> 00:14:25,980
Towards the end of that season,
329
00:14:25,980 --> 00:14:26,220
Cunial sent 15 tonnes of cherries
Towards the end of that season,
330
00:14:26,220 --> 00:14:30,060
Cunial sent 15 tonnes of cherries
to be sold at Coles -
331
00:14:30,060 --> 00:14:30,300
Cunial sent 15 tonnes of cherries
an entire semitrailer load.
332
00:14:30,300 --> 00:14:32,620
an entire semitrailer load.
333
00:14:32,620 --> 00:14:37,340
He hoped to receive around $90,000
for his biggest shipment of the year,
334
00:14:37,340 --> 00:14:37,580
He hoped to receive around $90,000
which had been carefully graded
335
00:14:37,580 --> 00:14:39,500
which had been carefully graded
336
00:14:39,500 --> 00:14:42,580
to meet Coles's specifications.
337
00:14:42,580 --> 00:14:46,700
Instead, he was told
the fruit was not up to standard,
338
00:14:46,700 --> 00:14:52,180
and he was only able to get $5,800
on the seconds market.
339
00:14:53,500 --> 00:14:56,380
When you're dealing with thousands
and thousands of pieces of fruit,
340
00:14:56,380 --> 00:15:00,420
you can pick 10 pieces out
and say, "This is no good."
341
00:15:00,420 --> 00:15:04,300
So, that is power,
that's market power
342
00:15:04,300 --> 00:15:08,700
when you can simply reject something
for no great reason.
343
00:15:08,700 --> 00:15:13,540
Would you acknowledge
that there is a lack of transparency
344
00:15:13,540 --> 00:15:13,780
Would you acknowledge
in how fresh produce is purchased?
345
00:15:13,780 --> 00:15:16,420
in how fresh produce is purchased?
346
00:15:17,380 --> 00:15:20,980
We enter into seasonal commitments
with our supplier,
347
00:15:20,980 --> 00:15:24,500
and I don't know
if this is a supplier to Coles,
348
00:15:24,500 --> 00:15:24,780
and I don't know
if this is a supplier to Coles,
but with our suppliers,
our fresh-produce suppliers,
349
00:15:24,780 --> 00:15:26,820
but with our suppliers,
our fresh-produce suppliers,
350
00:15:26,820 --> 00:15:28,860
we will enter
into a seasonal contract.
351
00:15:28,860 --> 00:15:30,740
Isn't there
a huge power imbalance there,
352
00:15:30,740 --> 00:15:30,980
Isn't there
that, once the fruit is sent off,
353
00:15:30,980 --> 00:15:32,980
that, once the fruit is sent off,
354
00:15:32,980 --> 00:15:34,740
they have very little choice
355
00:15:34,740 --> 00:15:37,700
other than to take the price
that they're given?
356
00:15:38,660 --> 00:15:41,260
So, as I said earlier,
357
00:15:41,260 --> 00:15:43,180
we work closely with our suppliers
358
00:15:43,180 --> 00:15:46,620
because we know
our suppliers have to be successful
359
00:15:46,620 --> 00:15:47,900
for us to be successful.
360
00:15:52,620 --> 00:15:55,660
Fruit and vegetables
are crucial for the big two.
361
00:15:55,660 --> 00:15:59,340
They're the first thing you see
when you enter a store.
362
00:15:59,340 --> 00:16:02,060
JEREMY GRIFFITH: The retailers need
to be able to offer apples and pears
363
00:16:02,060 --> 00:16:02,300
JEREMY GRIFFITH: The retailers need
and all the horticultural products
364
00:16:02,300 --> 00:16:03,540
and all the horticultural products
365
00:16:03,540 --> 00:16:05,020
at a very, very good price
366
00:16:05,020 --> 00:16:07,420
to get customers through the door.
367
00:16:07,420 --> 00:16:08,860
And that means that they will put
368
00:16:08,860 --> 00:16:09,100
an extraordinary level of pressure
on the growers
And that means that they will put
369
00:16:09,100 --> 00:16:12,420
an extraordinary level of pressure
on the growers
370
00:16:12,420 --> 00:16:12,660
an extraordinary level of pressure
to buy at super-super-low prices.
371
00:16:12,660 --> 00:16:14,900
to buy at super-super-low prices.
372
00:16:14,900 --> 00:16:17,980
Can I give you a run-through
of how the weekly buying process...
373
00:16:17,980 --> 00:16:20,220
Jeremy Griffith sits
on the Horticulture Council
374
00:16:20,220 --> 00:16:22,460
at the National Farmers' Federation.
375
00:16:22,460 --> 00:16:25,020
He says Coles's and Woolworths's
market power
376
00:16:25,020 --> 00:16:29,100
is having a profound impact
on the industry.
377
00:16:29,100 --> 00:16:31,940
We have estimated
in the last 12 months alone
378
00:16:31,940 --> 00:16:36,660
that we've taken the bulldozers to
15% of the Australian pear orchards.
379
00:16:36,660 --> 00:16:36,900
that we've taken the bulldozers to
That's a remarkable number.
380
00:16:36,900 --> 00:16:38,660
That's a remarkable number.
381
00:16:38,660 --> 00:16:41,060
34% of vegetable growers interviewed
382
00:16:41,060 --> 00:16:43,940
said that they wanted to get out
of the sector in the next 12 months.
383
00:16:43,940 --> 00:16:44,180
said that they wanted to get out
The average age of growers -
384
00:16:44,180 --> 00:16:45,420
The average age of growers -
385
00:16:45,420 --> 00:16:46,940
and you would've seen this
in your travels -
386
00:16:46,940 --> 00:16:47,180
and you would've seen this
you know, it's way too old
387
00:16:47,180 --> 00:16:48,420
you know, it's way too old
388
00:16:48,420 --> 00:16:48,660
because no young person
you know, it's way too old
389
00:16:48,660 --> 00:16:51,220
because no young person
sees a future in this industry.
390
00:16:51,220 --> 00:16:51,460
because no young person
It's a massive, massive issue.
391
00:16:51,460 --> 00:16:52,900
It's a massive, massive issue.
392
00:16:52,900 --> 00:16:54,940
We just need change, you know?
393
00:16:54,940 --> 00:16:57,900
That's the ultimate... That's where
we are at this point in time.
394
00:16:57,900 --> 00:16:59,740
We can't keep doing this.
395
00:17:07,700 --> 00:17:11,300
While fresh food is the bait
to get people through the door,
396
00:17:11,300 --> 00:17:16,220
your typical Coles or Woolworths
store has more than 20,000 items.
397
00:17:19,220 --> 00:17:23,140
And if you really want to understand
how the big retailers operate
398
00:17:23,140 --> 00:17:27,180
you need to speak with someone
like Julian Hilliard.
399
00:17:27,180 --> 00:17:27,420
you need to speak with someone
He spent 38 years in retail,
400
00:17:27,420 --> 00:17:29,660
He spent 38 years in retail,
401
00:17:29,660 --> 00:17:31,260
including working as a buyer
402
00:17:31,260 --> 00:17:33,740
and what's known
as a category manager
403
00:17:33,740 --> 00:17:35,980
for both Coles and Woolworths.
404
00:17:36,820 --> 00:17:41,900
He's bought everything from cereal
to nappies to laundry detergent.
405
00:17:41,900 --> 00:17:44,700
JULIAN HILLIARD: It's your job
to pick that right assortment,
406
00:17:44,700 --> 00:17:44,940
JULIAN HILLIARD: It's your job
that right mix of products
407
00:17:44,940 --> 00:17:46,180
that right mix of products
408
00:17:46,180 --> 00:17:46,420
that's going to maintain
that right mix of products
409
00:17:46,420 --> 00:17:49,580
that's going to maintain
the customer satisfaction,
410
00:17:49,580 --> 00:17:49,820
that's going to maintain
suit all their needs
411
00:17:49,820 --> 00:17:51,260
suit all their needs
412
00:17:51,260 --> 00:17:55,260
and obviously assist you
in achieving your targets.
413
00:17:55,260 --> 00:17:57,380
Is there pressure
to hit those targets?
414
00:17:57,380 --> 00:17:59,100
There's always pressure
to hit targets.
415
00:17:59,100 --> 00:18:02,500
There's sales targets.
There's margin targets.
416
00:18:02,500 --> 00:18:02,740
There's sales targets.
There's market-share targets.
417
00:18:02,740 --> 00:18:04,580
There's market-share targets.
418
00:18:04,580 --> 00:18:06,460
Then there's profit-dollar targets.
419
00:18:06,460 --> 00:18:09,020
So, definitely lots of ways
420
00:18:09,020 --> 00:18:11,700
that your performance
would be assessed.
421
00:18:13,940 --> 00:18:16,140
This might give you the impression
422
00:18:16,140 --> 00:18:19,100
that Coles and Woolworths
are in a fierce price war.
423
00:18:19,100 --> 00:18:19,340
that Coles and Woolworths
But that's not how the duopoly works.
424
00:18:19,340 --> 00:18:22,500
But that's not how the duopoly works.
425
00:18:22,500 --> 00:18:25,020
There's a term called 'Colesworth'.
426
00:18:25,020 --> 00:18:26,460
Mm-hm.
427
00:18:26,460 --> 00:18:27,820
What does that mean to you?
428
00:18:27,820 --> 00:18:28,060
I think it's a generic term
people use
What does that mean to you?
429
00:18:28,060 --> 00:18:30,460
I think it's a generic term
people use
430
00:18:30,460 --> 00:18:32,420
to describe the fact
that there's not a lot of difference
431
00:18:32,420 --> 00:18:32,660
to describe the fact
between Coles and Woolworths.
432
00:18:32,660 --> 00:18:34,100
between Coles and Woolworths.
433
00:18:34,100 --> 00:18:35,180
How closely
434
00:18:35,180 --> 00:18:35,420
How closely
do Coles and Woolworths
track each other on price?
435
00:18:35,420 --> 00:18:38,580
do Coles and Woolworths
track each other on price?
436
00:18:38,580 --> 00:18:42,300
They're more or less identical
in many respects.
437
00:18:42,300 --> 00:18:45,180
Both organisations
would have teams of people
438
00:18:45,180 --> 00:18:46,620
that would be checking prices
439
00:18:46,620 --> 00:18:49,540
to ensure
that you were not exceeding
440
00:18:49,540 --> 00:18:54,900
what was, I guess, deemed to be the
acceptable price in the marketplace.
441
00:18:54,900 --> 00:18:57,180
So, are you saying
when you worked for Woolworths
442
00:18:57,180 --> 00:18:58,460
and Coles put a price up
443
00:18:58,460 --> 00:19:00,940
you'd follow pretty quickly
afterwards?
444
00:19:00,940 --> 00:19:02,740
That would normally be the case.
445
00:19:03,700 --> 00:19:06,340
I would probably say that, you know,
446
00:19:06,340 --> 00:19:10,220
if you did five shops in Woolworths
and five shops in Coles
447
00:19:10,220 --> 00:19:10,460
if you did five shops in Woolworths
and you spent $100,
448
00:19:10,460 --> 00:19:12,180
and you spent $100,
449
00:19:12,180 --> 00:19:12,420
you'd be a few cents difference,
and you spent $100,
450
00:19:12,420 --> 00:19:16,180
you'd be a few cents difference,
maybe, depending on the specials.
451
00:19:17,140 --> 00:19:19,380
The fact there's little difference
on price
452
00:19:19,380 --> 00:19:24,180
is something that even
Coles CEO, Leah Weckert, concedes.
453
00:19:24,180 --> 00:19:26,100
You do price match with Woolworths,
do you?
454
00:19:26,100 --> 00:19:26,380
We certainly have as one of our
considerations when we set price
You do price match with Woolworths,
do you?
455
00:19:26,380 --> 00:19:28,940
We certainly have as one of our
considerations when we set price
456
00:19:28,940 --> 00:19:31,780
is what is the price of the other
retailers, not just Woolworths,
457
00:19:31,780 --> 00:19:32,060
is what is the price of the other
retailers, not just Woolworths,
but all other retailers
in the market
458
00:19:32,060 --> 00:19:33,940
but all other retailers
in the market
459
00:19:33,940 --> 00:19:36,740
that compete in the category
that we're looking at.
460
00:19:36,740 --> 00:19:40,100
Are you familiar
with the term 'Colesworth'?
461
00:19:40,100 --> 00:19:40,340
Are you familiar
I'm not.
462
00:19:40,340 --> 00:19:41,620
I'm not.
463
00:19:47,860 --> 00:19:50,260
Without the distraction
of a price war,
464
00:19:50,260 --> 00:19:54,100
the big two can instead focus
on pumping up their profit margins
465
00:19:54,100 --> 00:19:54,340
the big two can instead focus
to satisfy the share market.
466
00:19:54,340 --> 00:19:56,580
to satisfy the share market.
467
00:19:56,580 --> 00:20:00,620
And it's suppliers
who bear the brunt of this.
468
00:20:00,620 --> 00:20:05,300
They say Coles and Woolworths
play the game ruthlessly.
469
00:20:10,580 --> 00:20:12,620
INDUSTRY INSIDER:
It's absolutely ridiculous,
470
00:20:12,620 --> 00:20:16,780
the margins that they make,
the tactics that they deploy.
471
00:20:16,780 --> 00:20:22,300
One industry insider has had enough
and is now speaking out.
472
00:20:22,300 --> 00:20:22,540
One industry insider has had enough
You're essentially at their mercy
473
00:20:22,540 --> 00:20:25,180
You're essentially at their mercy
474
00:20:25,180 --> 00:20:27,660
in terms
of how they want to deal with you,
475
00:20:27,660 --> 00:20:29,460
what kind of money they want,
476
00:20:29,460 --> 00:20:31,180
and they can make brands overnight
477
00:20:31,180 --> 00:20:33,060
and they can destroy brands
overnight.
478
00:20:33,060 --> 00:20:37,180
That's the reality because of their
market power and concentration.
479
00:20:38,140 --> 00:20:40,340
He's asked not to be identified
480
00:20:40,340 --> 00:20:42,100
because he works for a company
481
00:20:42,100 --> 00:20:44,940
currently supplying
into Coles and Woolworths.
482
00:20:46,300 --> 00:20:48,820
If you're not willing
to play their game,
483
00:20:48,820 --> 00:20:49,060
If you're not willing
it's a lot of intimidation,
484
00:20:49,060 --> 00:20:50,580
it's a lot of intimidation,
485
00:20:50,580 --> 00:20:52,260
jacking up prices
486
00:20:52,260 --> 00:20:53,900
or deleting it from the shelf
487
00:20:53,900 --> 00:20:58,180
and forcing customers to essentially
go buy your competitor's product.
488
00:20:58,180 --> 00:20:58,420
and forcing customers to essentially
He says Coles and Woolworths
489
00:20:58,420 --> 00:21:00,100
He says Coles and Woolworths
490
00:21:00,100 --> 00:21:03,820
are always looking
to increase their profit margins.
491
00:21:03,820 --> 00:21:07,140
He cites a recent email exchange
with a Coles buyer
492
00:21:07,140 --> 00:21:07,380
He cites a recent email exchange
where he asked for a price increase.
493
00:21:07,380 --> 00:21:09,860
where he asked for a price increase.
494
00:21:09,860 --> 00:21:15,380
Initially, he rejected, or said,
"I can't accept this cost increase
495
00:21:15,380 --> 00:21:20,820
"based on the current climate
and the impact on consumers."
496
00:21:20,820 --> 00:21:25,980
The Coles buyer argued the increase
of around 5% wasn't justified.
497
00:21:25,980 --> 00:21:27,980
That's where
the negotiations started,
498
00:21:27,980 --> 00:21:30,780
and we ended up
giving a lump sum of money
499
00:21:30,780 --> 00:21:31,020
and we ended up
to get the price increase through,
500
00:21:31,020 --> 00:21:32,580
to get the price increase through,
501
00:21:32,580 --> 00:21:34,900
which was accepted in full.
502
00:21:34,900 --> 00:21:39,420
So, you're saying that they will
validate your price increase
503
00:21:39,420 --> 00:21:43,140
if you give them either more margin
or a lump sum of money?
504
00:21:43,140 --> 00:21:43,380
if you give them either more margin
Correct.
505
00:21:43,380 --> 00:21:44,140
Correct.
506
00:21:44,140 --> 00:21:44,380
That lump sum
Correct.
507
00:21:44,380 --> 00:21:49,140
That lump sum
was $25,000 towards promotions.
508
00:21:49,140 --> 00:21:52,620
The Coles buyer's
initial concern for the consumer
509
00:21:52,620 --> 00:21:52,860
The Coles buyer's
had been quickly forgotten.
510
00:21:52,860 --> 00:21:55,260
had been quickly forgotten.
511
00:21:58,100 --> 00:22:00,340
There are other costs for suppliers
512
00:22:00,340 --> 00:22:03,100
wanting to do business
with the big two,
513
00:22:03,100 --> 00:22:03,340
wanting to do business
including in-house advertising.
514
00:22:03,340 --> 00:22:05,380
including in-house advertising.
515
00:22:05,380 --> 00:22:11,540
A full-page ad in Woolworths Fresh
magazine will cost $30,000.
516
00:22:11,540 --> 00:22:14,980
A four-week spot on Coles Radio -
$28,000.
517
00:22:14,980 --> 00:22:20,460
And these all contribute to higher
prices for customers at the checkout.
518
00:22:21,660 --> 00:22:23,460
They're the ones
that are getting screwed.
519
00:22:23,460 --> 00:22:26,340
It just means higher prices
at the shelf
520
00:22:26,340 --> 00:22:29,380
because the supermarkets
are extremely greedy.
521
00:22:29,380 --> 00:22:29,620
because the supermarkets
Why do you want to speak out?
522
00:22:29,620 --> 00:22:32,340
Why do you want to speak out?
523
00:22:32,340 --> 00:22:35,940
I honestly think
it's the right thing to do.
524
00:22:35,940 --> 00:22:39,540
I think the current situation
has gotten extremely out of hand.
525
00:22:39,540 --> 00:22:42,060
You go to the supermarket,
you buy a few items,
526
00:22:42,060 --> 00:22:44,740
you're already talking $75 to $100.
527
00:22:44,740 --> 00:22:47,500
A lot of Aussies
are struggling out there.
528
00:22:47,500 --> 00:22:47,780
So, you have an email
from one supplier.
A lot of Aussies
are struggling out there.
529
00:22:47,780 --> 00:22:50,660
So, you have an email
from one supplier.
530
00:22:50,660 --> 00:22:50,900
So, you have an email
We have over 8,000 suppliers
531
00:22:50,900 --> 00:22:53,140
We have over 8,000 suppliers
532
00:22:53,140 --> 00:22:54,580
that we work with.
533
00:22:54,580 --> 00:22:56,620
We have a team of people
534
00:22:56,620 --> 00:22:56,860
whose job it is to look to validate
We have a team of people
535
00:22:56,860 --> 00:23:00,460
whose job it is to look to validate
cost-price increases,
536
00:23:00,460 --> 00:23:00,700
whose job it is to look to validate
and we take that job very seriously.
537
00:23:00,700 --> 00:23:02,940
and we take that job very seriously.
538
00:23:02,940 --> 00:23:05,580
He says that's the definition
of price gouging.
539
00:23:10,060 --> 00:23:11,900
Is that the case?
540
00:23:11,900 --> 00:23:14,380
We don't engage
in practices like that.
541
00:23:14,380 --> 00:23:17,020
We're working...
So, you're saying absolutely
542
00:23:17,020 --> 00:23:21,100
that this is not a practice
that you engage in -
543
00:23:21,100 --> 00:23:23,860
to use a price increase
544
00:23:23,860 --> 00:23:27,140
to increase your margin
or your bottom line in another way?
545
00:23:27,140 --> 00:23:30,780
I would need to see the specifics
of any particular scenario
546
00:23:30,780 --> 00:23:33,220
to judge
whether it's reasonable or not.
547
00:23:33,220 --> 00:23:35,100
What we have certainly seen
548
00:23:35,100 --> 00:23:37,900
is that there has been inflation
in cost basis.
549
00:23:37,900 --> 00:23:38,140
is that there has been inflation
Coles has not been immune to that.
550
00:23:38,140 --> 00:23:40,180
Coles has not been immune to that.
551
00:23:40,180 --> 00:23:40,420
The increases have been substantial
Coles has not been immune to that.
552
00:23:40,420 --> 00:23:43,260
The increases have been substantial
over the last couple of years.
553
00:23:43,260 --> 00:23:49,100
And, so, some of that
does flow through to the consumer.
554
00:23:50,780 --> 00:23:55,980
Woolworths denies using similar
tactics against its suppliers.
555
00:23:55,980 --> 00:23:58,500
BRAD BANDUCCI: When a supplier
asks for a price increase,
556
00:23:58,500 --> 00:23:58,740
BRAD BANDUCCI: When a supplier
we would like to engage
557
00:23:58,740 --> 00:24:00,380
we would like to engage
558
00:24:00,380 --> 00:24:00,620
to make sure
it's based on true cost increases,
we would like to engage
559
00:24:00,620 --> 00:24:03,180
to make sure
it's based on true cost increases,
560
00:24:03,180 --> 00:24:06,500
and we do that in the context
of complying with the code.
561
00:24:06,500 --> 00:24:06,740
and we do that in the context
of complying with the code.
And, so, you know, we're very keen
562
00:24:06,740 --> 00:24:08,380
And, so, you know, we're very keen
563
00:24:08,380 --> 00:24:10,540
to make sure we don't pass on
anything more to our customers
564
00:24:10,540 --> 00:24:10,780
to make sure we don't pass on
than is required.
565
00:24:10,780 --> 00:24:11,940
than is required.
566
00:24:13,260 --> 00:24:14,740
As a buyer,
567
00:24:14,740 --> 00:24:20,220
Julian Hilliard says it was his job
to put pressure on suppliers.
568
00:24:20,220 --> 00:24:21,820
JULIAN HILLIARD:
Certainly there would be
569
00:24:21,820 --> 00:24:22,060
uncomfortable conversations.
JULIAN HILLIARD:
Certainly there would be
570
00:24:22,060 --> 00:24:23,980
uncomfortable conversations.
571
00:24:23,980 --> 00:24:25,300
There's no question of that.
572
00:24:25,300 --> 00:24:29,380
Now, some people might classify that
as robust business...
573
00:24:30,340 --> 00:24:32,260
..um...discussion.
574
00:24:32,260 --> 00:24:34,460
I guess if I felt
575
00:24:34,460 --> 00:24:36,740
that someone had already given me
576
00:24:36,740 --> 00:24:38,620
everything
they could possibly give me,
577
00:24:38,620 --> 00:24:38,860
everything
and I had to ask for more,
578
00:24:38,860 --> 00:24:39,980
and I had to ask for more,
579
00:24:39,980 --> 00:24:40,220
then, personally,
and I had to ask for more,
580
00:24:40,220 --> 00:24:42,820
then, personally,
I felt that that was probably
581
00:24:42,820 --> 00:24:43,060
then, personally,
a little...a little bit, um...
582
00:24:43,060 --> 00:24:45,300
a little...a little bit, um...
583
00:24:45,300 --> 00:24:46,820
..a little bit of a stretch.
584
00:24:52,220 --> 00:24:56,140
The establishment in 2015
of a Food and Grocery Code of Conduct
585
00:24:56,140 --> 00:24:58,660
was supposed
to take some of this friction
586
00:24:58,660 --> 00:25:02,220
out of the supermarket-supplier
relationship.
587
00:25:03,180 --> 00:25:07,980
Under the code, each supermarket
appoints and pays for an arbiter
588
00:25:07,980 --> 00:25:08,220
Under the code, each supermarket
to handle its complaints.
589
00:25:08,220 --> 00:25:10,060
to handle its complaints.
590
00:25:11,260 --> 00:25:13,260
ROD SIMS:
The Grocery Code of Conduct
591
00:25:13,260 --> 00:25:13,500
ROD SIMS:
is, quite frankly, a disgrace.
592
00:25:13,500 --> 00:25:15,500
is, quite frankly, a disgrace.
593
00:25:15,500 --> 00:25:15,700
You have a code with no penalties.
is, quite frankly, a disgrace.
594
00:25:15,700 --> 00:25:18,900
You have a code with no penalties.
595
00:25:18,900 --> 00:25:20,980
Now, let me just emphasise that.
596
00:25:20,980 --> 00:25:23,180
That is like having a speed limit
597
00:25:23,180 --> 00:25:24,700
throughout one of our cities
598
00:25:24,700 --> 00:25:26,420
of 60 kilometres an hour,
599
00:25:26,420 --> 00:25:27,980
that's the speed limit,
600
00:25:27,980 --> 00:25:28,220
then someone says,
that's the speed limit,
601
00:25:28,220 --> 00:25:29,820
then someone says,
"What happens if I go 80?"
602
00:25:29,820 --> 00:25:30,060
then someone says,
"Nothing. There's no penalty."
603
00:25:30,060 --> 00:25:32,300
"Nothing. There's no penalty."
604
00:25:32,300 --> 00:25:34,140
So, the law is a joke.
605
00:25:34,140 --> 00:25:35,940
The code of conduct is a joke.
606
00:25:39,660 --> 00:25:41,140
Why do you think it is
607
00:25:41,140 --> 00:25:44,540
that Woolworths
has never had a single complaint
608
00:25:44,540 --> 00:25:44,780
that Woolworths
under the Grocery Code of Conduct?
609
00:25:44,780 --> 00:25:47,020
under the Grocery Code of Conduct?
610
00:25:47,020 --> 00:25:47,260
I mean, you know, you would
under the Grocery Code of Conduct?
611
00:25:47,260 --> 00:25:50,380
I mean, you know, you would
have to go and ask suppliers
612
00:25:50,380 --> 00:25:51,940
why that's the case.
Well, let me tell you.
613
00:25:51,940 --> 00:25:55,180
Sure.
Your own arbiter, Helen McKenzie...
614
00:25:55,180 --> 00:25:55,420
Sure.
OK. Helen. Yep.
615
00:25:55,420 --> 00:25:56,180
OK. Helen. Yep.
616
00:25:56,180 --> 00:25:56,420
..has said that suppliers
OK. Helen. Yep.
617
00:25:56,420 --> 00:26:01,580
..has said that suppliers
are frightened to complain
618
00:26:01,580 --> 00:26:01,820
..has said that suppliers
and that they fear retribution.
619
00:26:01,820 --> 00:26:03,700
and that they fear retribution.
620
00:26:03,700 --> 00:26:06,180
Look, I think it's just the nature
of any relationship
621
00:26:06,180 --> 00:26:08,180
that there's going
to be that anxiety.
622
00:26:08,180 --> 00:26:11,300
It's a lot stronger word
than 'anxiety'.
623
00:26:11,300 --> 00:26:13,540
So, we engage with our suppliers
every week.
624
00:26:13,540 --> 00:26:16,660
We have robust conversations
every week.
625
00:26:16,660 --> 00:26:18,980
We resolve issues every week.
626
00:26:18,980 --> 00:26:20,460
It's only if you can't do that
627
00:26:20,460 --> 00:26:24,180
that you go to a...to a code arbiter
or anything else.
628
00:26:25,620 --> 00:26:28,660
Coles had no complaints
under the code last financial year
629
00:26:28,660 --> 00:26:31,900
and just five
in the previous two years.
630
00:26:31,900 --> 00:26:32,140
and just five
On three of those occasions
631
00:26:32,140 --> 00:26:33,540
On three of those occasions
632
00:26:33,540 --> 00:26:37,340
it agreed
to compensate the suppliers.
633
00:26:37,340 --> 00:26:39,060
So, they say they fear retribution
634
00:26:39,060 --> 00:26:42,380
and, so, they would not make
a formal complaint.
635
00:26:42,380 --> 00:26:42,620
Well, that is not in line
and, so, they would not make
a formal complaint.
636
00:26:42,620 --> 00:26:44,300
Well, that is not in line
637
00:26:44,300 --> 00:26:48,380
with the culture
that we have at Coles.
638
00:26:48,380 --> 00:26:49,500
And that is why
639
00:26:49,500 --> 00:26:49,740
And that is why
I think most issues are actually
resolved in the first instance
640
00:26:49,740 --> 00:26:53,100
I think most issues are actually
resolved in the first instance
641
00:26:53,100 --> 00:26:53,340
I think most issues are actually
by our suppliers and our farmers
642
00:26:53,340 --> 00:26:54,780
by our suppliers and our farmers
643
00:26:54,780 --> 00:26:56,820
having a conversation
with our category teams.
644
00:26:56,820 --> 00:26:58,260
So, you think it's working well?
645
00:26:58,260 --> 00:27:00,820
I'm not saying
that anyone is not complaining.
646
00:27:00,820 --> 00:27:03,140
I'm saying
that a lot of these issues
647
00:27:03,140 --> 00:27:06,980
are getting raised with our category
teams and being worked through.
648
00:27:10,340 --> 00:27:14,340
The Food and Grocery Code of Conduct
is now under review,
649
00:27:14,340 --> 00:27:14,580
The Food and Grocery Code of Conduct
with a push to make it mandatory
650
00:27:14,580 --> 00:27:16,260
with a push to make it mandatory
651
00:27:16,260 --> 00:27:20,260
and to impose fines
on those who breach it.
652
00:27:20,260 --> 00:27:22,580
The federal government
is also reviewing
653
00:27:22,580 --> 00:27:22,820
The federal government
Australia's competition laws.
654
00:27:22,820 --> 00:27:24,300
Australia's competition laws.
655
00:27:25,540 --> 00:27:29,620
Brad Banducci is adamant
competition is fierce,
656
00:27:29,620 --> 00:27:33,900
even going as far
as talking up rivals like Aldi.
657
00:27:35,420 --> 00:27:38,940
They've got 590 stores.
Aldi - they're an amazing business.
658
00:27:38,940 --> 00:27:41,180
Uh... They drive incredible value.
659
00:27:41,180 --> 00:27:41,380
Uh... They drive incredible value.
They have 10% of the market, though.
660
00:27:41,380 --> 00:27:43,260
They have 10% of the market, though.
661
00:27:43,260 --> 00:27:44,540
It's not the percentage they have.
662
00:27:44,540 --> 00:27:46,140
They're in every community,
663
00:27:46,140 --> 00:27:47,580
and it makes customers have a choice
664
00:27:47,580 --> 00:27:50,580
between a Woolworths, a Coles
and an Aldi at minimum.
665
00:27:50,580 --> 00:27:53,940
And, by the way, just up the road
is a Costco warehouse.
666
00:27:53,940 --> 00:27:57,340
Sorry, you're saying that actually
there is really robust competition?
667
00:27:57,340 --> 00:27:58,100
Yeah...
668
00:27:58,100 --> 00:28:00,220
Rod Sims,
the former head of the ACCC,
669
00:28:00,220 --> 00:28:00,460
Rod Sims,
says that we have one of the most
670
00:28:00,460 --> 00:28:02,220
says that we have one of the most
671
00:28:02,220 --> 00:28:04,380
concentrated supermarkets
in the world.
672
00:28:04,380 --> 00:28:05,820
Is he lying?
It's not true. It's not true.
673
00:28:05,820 --> 00:28:06,060
Is he lying?
And it's... It is not true.
674
00:28:06,060 --> 00:28:08,740
And it's... It is not true.
675
00:28:08,740 --> 00:28:10,460
This community over here,
676
00:28:10,460 --> 00:28:13,980
there will be three Coles stores
within two kilometres of it,
677
00:28:13,980 --> 00:28:15,620
at least one Aldi store,
678
00:28:15,620 --> 00:28:17,260
a series of independents,
679
00:28:17,260 --> 00:28:19,340
ability to within 24 hours
680
00:28:19,340 --> 00:28:23,380
have a quarter of our store
delivered to you by Amazon.
681
00:28:23,380 --> 00:28:25,420
It is an incredibly
competitive market.
682
00:28:25,420 --> 00:28:26,940
The risk people have is...
I'm sorry,
683
00:28:26,940 --> 00:28:29,460
the former ahead
of the Competition Commission says...
684
00:28:29,460 --> 00:28:31,940
You know that...
..his words are...
685
00:28:31,940 --> 00:28:32,900
Retired.
686
00:28:32,900 --> 00:28:34,380
By the way.
687
00:28:34,380 --> 00:28:36,860
I don't think you would impugn
his integrity
688
00:28:36,860 --> 00:28:39,100
and his understanding
of competition law.
689
00:28:39,100 --> 00:28:41,380
I'm just saying the world
has got much more competitive.
690
00:28:41,380 --> 00:28:41,620
I'm just saying the world
He retired 18 months ago. He's not...
691
00:28:41,620 --> 00:28:44,260
He retired 18 months ago. He's not...
692
00:28:44,260 --> 00:28:47,220
OK, let's... Well, can we
take that out? Is that OK?
693
00:28:48,180 --> 00:28:50,460
I should... I mean, he IS retired,
694
00:28:50,460 --> 00:28:52,740
but I shouldn't have said that,
Angus.
695
00:28:52,740 --> 00:28:54,620
Are we going to leave it in there?
If we are...
696
00:28:54,620 --> 00:28:58,940
Well, I mean, we're on the record.
You said it. I mean, you know...
697
00:28:58,940 --> 00:29:01,020
Let's move on. But... Yeah.
(WOMAN SPEAKS INDISTINCTLY)
698
00:29:01,020 --> 00:29:01,260
Let's move on. But... Yeah.
Yeah, no, I think I'm done, guys.
699
00:29:01,260 --> 00:29:03,500
Yeah, no, I think I'm done, guys.
700
00:29:03,500 --> 00:29:06,100
Uh... You know,
I do this with good intent.
701
00:29:06,100 --> 00:29:07,940
You know,
I don't do this with bad intent.
702
00:29:07,940 --> 00:29:08,180
You know,
You're walking out? Really?
703
00:29:08,180 --> 00:29:09,420
You're walking out? Really?
704
00:29:09,420 --> 00:29:11,900
No, no, no.
Can we just talk to Brad for a sec?
705
00:29:11,900 --> 00:29:13,620
Let me just...
We'll just have a minute.
706
00:29:13,620 --> 00:29:15,540
We'll just pause.
We'll be finished in a sec.
707
00:29:15,540 --> 00:29:15,780
We'll just pause.
Come here for a...
708
00:29:15,780 --> 00:29:17,060
Come here for a...
709
00:29:28,900 --> 00:29:30,580
Let's keep going.
710
00:29:35,580 --> 00:29:38,260
AD VOICEOVER: Australia,
we've never been more excited
711
00:29:38,260 --> 00:29:38,500
AD VOICEOVER: Australia,
because whenever...
712
00:29:38,500 --> 00:29:39,740
because whenever...
713
00:29:39,740 --> 00:29:42,060
The supermarkets
are feeling the pressure.
714
00:29:42,060 --> 00:29:44,660
It means you're getting great value
hands down.
715
00:29:44,660 --> 00:29:47,740
One tactic they've been using
to get the public back on side
716
00:29:47,740 --> 00:29:51,780
is the lure of specials,
as seen in their slick ads.
717
00:29:53,540 --> 00:29:55,580
AD VOICEOVER: At Woolworths,
we can help you spend less...
718
00:29:55,580 --> 00:30:00,380
In recent months the big two have
both announced store-wide price cuts.
719
00:30:00,380 --> 00:30:00,620
In recent months the big two have
That's today's fresh food people.
720
00:30:00,620 --> 00:30:03,140
That's today's fresh food people.
721
00:30:12,220 --> 00:30:17,220
I'm on my way to see Rosie Thomas,
the campaigns director at CHOICE.
722
00:30:18,940 --> 00:30:21,540
I've brought some groceries with me.
723
00:30:23,980 --> 00:30:26,700
So, what can you tell us
about these ones?
724
00:30:26,700 --> 00:30:26,940
So, what can you tell us
Ah. I recognise these products.
725
00:30:26,940 --> 00:30:28,620
Ah. I recognise these products.
726
00:30:28,620 --> 00:30:30,260
So, these barbecue briquettes,
727
00:30:30,260 --> 00:30:30,500
this is the product where we caught
So, these barbecue briquettes,
728
00:30:30,500 --> 00:30:34,460
this is the product where we caught
Coles out raising locked prices.
729
00:30:34,460 --> 00:30:39,020
It was not just one item
where Coles had misled consumers.
730
00:30:39,020 --> 00:30:40,060
Band-Aids?
Yes.
731
00:30:40,060 --> 00:30:42,220
Again, there was
a locked-price promise,
732
00:30:42,220 --> 00:30:44,620
but then they put up prices
before they should have.
733
00:30:44,620 --> 00:30:48,100
After CHOICE complained
to the ACCC about the briquettes
734
00:30:48,100 --> 00:30:48,340
After CHOICE complained
Coles conceded there were 20 items
735
00:30:48,340 --> 00:30:51,060
Coles conceded there were 20 items
736
00:30:51,060 --> 00:30:53,020
where prices had not been locked
737
00:30:53,020 --> 00:30:53,260
for as long
where prices had not been locked
738
00:30:53,260 --> 00:30:56,300
for as long
as the retailer had promised.
739
00:30:56,300 --> 00:30:58,180
I'm surprised by this one.
Cornflakes?
740
00:30:58,180 --> 00:31:00,460
Yeah, Cornflakes,
a staple in so many households,
741
00:31:00,460 --> 00:31:02,660
and people were paying more
than they should have.
742
00:31:02,660 --> 00:31:05,540
So, Coles was caught red-handed.
743
00:31:05,540 --> 00:31:09,260
They've started refunding
the amounts
744
00:31:09,260 --> 00:31:09,540
to any consumers who have
Flybuys accounts or shopped online,
They've started refunding
the amounts
745
00:31:09,540 --> 00:31:14,500
to any consumers who have
Flybuys accounts or shopped online,
746
00:31:14,500 --> 00:31:16,660
but there will still
be a large number of consumers
747
00:31:16,660 --> 00:31:16,900
but there will still
be a large number of consumers
who bought these products in store,
748
00:31:16,900 --> 00:31:18,700
who bought these products in store,
749
00:31:18,700 --> 00:31:21,380
and, unless they show up
with receipts,
750
00:31:21,380 --> 00:31:21,620
and, unless they show up
they're not going to get refunds.
751
00:31:21,620 --> 00:31:22,860
they're not going to get refunds.
752
00:31:22,860 --> 00:31:25,180
And, so, we really want to know
what Coles is doing
753
00:31:25,180 --> 00:31:28,540
with that extra money
that it's held on to unfairly.
754
00:31:28,540 --> 00:31:32,060
So, despite having misled
the consumers on 20 occasions,
755
00:31:32,060 --> 00:31:35,380
there has been
no tangible punishment for Coles?
756
00:31:35,380 --> 00:31:37,900
Not yet,
other than refunding the money,
757
00:31:37,900 --> 00:31:40,540
which they really
shouldn't have kept to begin with.
758
00:31:40,540 --> 00:31:40,780
which they really
Do you know how much you've refunded?
759
00:31:40,780 --> 00:31:42,220
Do you know how much you've refunded?
760
00:31:42,220 --> 00:31:42,420
We have refunded substantially more
Do you know how much you've refunded?
761
00:31:42,420 --> 00:31:45,340
We have refunded substantially more
762
00:31:45,340 --> 00:31:49,020
than what the benefit was to Coles
763
00:31:49,020 --> 00:31:49,220
than what the benefit was to Coles
from the increase in price.
764
00:31:49,220 --> 00:31:50,780
from the increase in price.
765
00:31:50,780 --> 00:31:52,900
And I think what's important to me
766
00:31:52,900 --> 00:31:54,380
is that we have worked hard
767
00:31:54,380 --> 00:31:54,620
to understand
is that we have worked hard
768
00:31:54,620 --> 00:31:56,860
to understand
what went wrong with the processes
769
00:31:56,860 --> 00:31:59,860
so that they don't happen
going forward.
770
00:31:59,860 --> 00:32:01,580
Can you give us the figures
of how much
771
00:32:01,580 --> 00:32:04,100
customers spent
and what you refunded?
772
00:32:04,100 --> 00:32:05,340
I don't think that's appropriate
773
00:32:05,340 --> 00:32:07,820
that we get into
that level of detail.
774
00:32:07,820 --> 00:32:08,860
Cheap! Cheap!
775
00:32:08,860 --> 00:32:10,380
SONG: # Really, really cheap
776
00:32:10,380 --> 00:32:10,620
# Really, really cheap
SONG: # Really, really cheap
777
00:32:10,620 --> 00:32:12,580
# Really, really cheap
Really, really cheap... #
778
00:32:12,580 --> 00:32:14,860
Here's the thing you need to know
about specials -
779
00:32:14,860 --> 00:32:15,100
Here's the thing you need to know
they're not really that special.
780
00:32:15,100 --> 00:32:17,420
they're not really that special.
781
00:32:17,420 --> 00:32:19,260
Grocery suppliers and brands
782
00:32:19,260 --> 00:32:19,500
are often expected to fund these
Grocery suppliers and brands
783
00:32:19,500 --> 00:32:23,460
are often expected to fund these
promotions, not the supermarkets.
784
00:32:23,460 --> 00:32:23,700
are often expected to fund these
# The word on the street... #
785
00:32:23,700 --> 00:32:25,060
# The word on the street... #
786
00:32:25,060 --> 00:32:28,620
That means suppliers need to set
their recommended retail price
787
00:32:28,620 --> 00:32:28,860
That means suppliers need to set
at a higher level
788
00:32:28,860 --> 00:32:30,180
at a higher level
789
00:32:30,180 --> 00:32:30,420
knowing they will have to offer
at a higher level
790
00:32:30,420 --> 00:32:35,180
knowing they will have to offer
deep discounts for much of the year.
791
00:32:35,180 --> 00:32:37,700
(WHISTLING
OF WOOLWORTHS THEME MUSIC)
792
00:32:37,700 --> 00:32:42,060
I'm guessing that the normal price
of this is probably over $30.
793
00:32:42,060 --> 00:32:42,300
I'm guessing that the normal price
In fact, yes, it is. $31.
794
00:32:42,300 --> 00:32:44,940
In fact, yes, it is. $31.
795
00:32:44,940 --> 00:32:46,660
It's on special for $14.50.
796
00:32:46,660 --> 00:32:50,500
Who would ever pay over $30
for that item?
797
00:32:50,500 --> 00:32:54,460
So, why do they even have
the recommended retail price?
798
00:32:54,460 --> 00:32:54,740
I guess they have to set a price
and then they'll promote off it.
So, why do they even have
the recommended retail price?
799
00:32:54,740 --> 00:32:57,820
I guess they have to set a price
and then they'll promote off it.
800
00:32:57,820 --> 00:33:00,540
You might ask yourself,
or I would ask myself, you know,
801
00:33:00,540 --> 00:33:00,820
You might ask yourself,
or I would ask myself, you know,
would it be better to have that
sweet-spot price around about $22
802
00:33:00,820 --> 00:33:05,180
would it be better to have that
sweet-spot price around about $22
803
00:33:05,180 --> 00:33:07,180
and just sell it for $22 every day?
804
00:33:07,180 --> 00:33:11,380
The trouble with that is it would
then just blend into everything else
805
00:33:11,380 --> 00:33:15,660
because it wouldn't have
the nice, big, flashy ticket on it.
806
00:33:15,660 --> 00:33:18,060
You are attracted to those tickets.
807
00:33:18,060 --> 00:33:22,140
It helps to drive
people into the supermarkets.
808
00:33:22,140 --> 00:33:25,740
It helps everyone feel
that they're getting a better deal.
809
00:33:25,740 --> 00:33:28,540
So, how would you categorise
a special?
810
00:33:28,540 --> 00:33:28,780
So, how would you categorise
Oh...a little bit like a drug.
811
00:33:28,780 --> 00:33:31,260
Oh...a little bit like a drug.
812
00:33:35,460 --> 00:33:38,180
Behind the success
of Coles and Woolworths
813
00:33:38,180 --> 00:33:42,460
is a workforce
of more than 300,000 people.
814
00:33:42,460 --> 00:33:46,740
They are two of Australia's
largest private-sector employers.
815
00:33:47,580 --> 00:33:50,460
But the announcement
of record profits
816
00:33:50,460 --> 00:33:53,140
has caused friction
on the shop floor.
817
00:33:55,620 --> 00:33:58,500
So, I've decided to get
a few groceries on the way home
818
00:33:58,500 --> 00:33:58,740
So, I've decided to get
through Coles Click&Collect.
819
00:33:58,740 --> 00:34:00,700
through Coles Click&Collect.
820
00:34:00,700 --> 00:34:00,940
Yep, here we are.
through Coles Click&Collect.
821
00:34:00,940 --> 00:34:03,380
Yep, here we are.
OK, going in here now.
822
00:34:12,620 --> 00:34:14,340
That was super easy.
823
00:34:14,340 --> 00:34:18,180
Drive in, two minutes later -
groceries in the back of the car.
824
00:34:20,700 --> 00:34:22,500
But now I'm going to meet someone
825
00:34:22,500 --> 00:34:25,700
who quite possibly
helped pick and pack my order.
826
00:34:25,700 --> 00:34:27,980
Hey! How are you?
Hi. Good. How are you?
827
00:34:27,980 --> 00:34:29,420
How was your shift?
Oh! Long.
828
00:34:29,420 --> 00:34:30,700
Yeah?
Yeah, long.
829
00:34:30,700 --> 00:34:34,420
It's a stifling day,
typical for this time of year.
830
00:34:34,420 --> 00:34:39,740
Ana tells me it's just as hot
inside her store as it is out here.
831
00:34:39,740 --> 00:34:41,380
So, how hot did it get in there?
832
00:34:41,380 --> 00:34:41,580
It got up to 34, 35 degrees. Yeah.
So, how hot did it get in there?
833
00:34:41,580 --> 00:34:44,220
It got up to 34, 35 degrees. Yeah.
834
00:34:44,220 --> 00:34:45,700
It was 34 degrees in there?!
835
00:34:45,700 --> 00:34:45,940
Yeah. 34. Yeah. At least.
It was 34 degrees in there?!
836
00:34:45,940 --> 00:34:48,620
Yeah. 34. Yeah. At least.
Wow. That must be uncomfortable.
837
00:34:48,620 --> 00:34:48,900
Yeah. 34. Yeah. At least.
Wow. That must be uncomfortable.
Yeah, it was.
It was very uncomfortable.
838
00:34:48,900 --> 00:34:50,500
Yeah, it was.
It was very uncomfortable.
839
00:34:50,500 --> 00:34:50,740
Yeah, it was.
It makes your job harder to do.
840
00:34:50,740 --> 00:34:52,180
It makes your job harder to do.
841
00:34:53,140 --> 00:34:56,700
Where Ana works
isn't any ordinary Coles supermarket.
842
00:34:56,700 --> 00:34:56,940
Where Ana works
It's what's known as a 'dark store'.
843
00:34:56,940 --> 00:35:00,260
It's what's known as a 'dark store'.
844
00:35:00,260 --> 00:35:04,900
While it looks like a supermarket
with aisles, a deli and bakery,
845
00:35:04,900 --> 00:35:05,140
While it looks like a supermarket
there are no customers.
846
00:35:05,140 --> 00:35:06,540
there are no customers.
847
00:35:07,500 --> 00:35:12,660
Inside, dozens of staff fill orders
for delivery or click and collect.
848
00:35:14,460 --> 00:35:18,660
These photos show
just how hot it can get.
849
00:35:18,660 --> 00:35:20,500
Coles wouldn't expect its customers
850
00:35:20,500 --> 00:35:24,260
to endure temperatures of 34 degrees
while they shop,
851
00:35:24,260 --> 00:35:27,380
but for staff
this is just part of the job.
852
00:35:30,540 --> 00:35:32,780
I catch up with Ana again at home.
853
00:35:33,820 --> 00:35:36,420
Every summer
there's people who feel dizzy.
854
00:35:36,420 --> 00:35:38,940
Every summer there's people whose
sweat's just dripping off them
855
00:35:38,940 --> 00:35:40,420
and they want to sit down.
856
00:35:40,420 --> 00:35:43,980
But you get a 15-minute break
in a five-hour shift,
857
00:35:43,980 --> 00:35:47,460
so, I think
it's not really enough for...
858
00:35:47,460 --> 00:35:50,900
One 15-minute break doesn't
really allow you time to recover
859
00:35:50,900 --> 00:35:54,460
and then go back to work
and still keep up the same pace.
860
00:35:54,460 --> 00:35:57,300
The pace Ana's talking about
is quick.
861
00:35:57,300 --> 00:36:01,420
Workers gathering items
for online orders are timed
862
00:36:01,420 --> 00:36:01,660
Workers gathering items
and there are targets set.
863
00:36:01,660 --> 00:36:03,900
and there are targets set.
864
00:36:03,900 --> 00:36:05,820
There is a industry standard
of a pick rate
865
00:36:05,820 --> 00:36:06,060
There is a industry standard
of about 180 items per hour.
866
00:36:06,060 --> 00:36:08,300
of about 180 items per hour.
867
00:36:08,300 --> 00:36:11,140
Our warehouse,
particularly during busy periods,
868
00:36:11,140 --> 00:36:15,900
will push you to go above and beyond
that, which might be 210, 220.
869
00:36:15,900 --> 00:36:20,460
In the past, they have displayed
the names of pickers, um...
870
00:36:20,460 --> 00:36:23,820
..where the ones who are falling
behind the official pick rate
871
00:36:23,820 --> 00:36:24,060
..where the ones who are falling
will be displayed in red.
872
00:36:24,060 --> 00:36:25,500
will be displayed in red.
873
00:36:25,500 --> 00:36:25,740
How does it make you feel
will be displayed in red.
874
00:36:25,740 --> 00:36:28,620
How does it make you feel
being, effectively, publicly shamed
875
00:36:28,620 --> 00:36:28,860
How does it make you feel
for not working hard enough?
876
00:36:28,860 --> 00:36:30,460
for not working hard enough?
877
00:36:30,460 --> 00:36:33,020
It's not fair to people
with different abilities,
878
00:36:33,020 --> 00:36:36,220
different capabilities,
different reasons
879
00:36:36,220 --> 00:36:38,140
for what speed they can maintain.
880
00:36:38,140 --> 00:36:40,300
We prioritise,
881
00:36:40,300 --> 00:36:40,500
um...team-member safety
We prioritise,
882
00:36:40,500 --> 00:36:42,020
um...team-member safety
883
00:36:42,020 --> 00:36:46,540
as something that is absolutely
crucial, uh...in our business.
884
00:36:46,540 --> 00:36:46,820
as something that is absolutely
crucial, uh...in our business.
And, so, ensuring
that there is an environment, um...
885
00:36:46,820 --> 00:36:50,380
And, so, ensuring
that there is an environment, um...
886
00:36:50,380 --> 00:36:53,700
..including temperature,
that is safe for our team member
887
00:36:53,700 --> 00:36:53,940
..including temperature,
would be something that, um...
888
00:36:53,940 --> 00:36:56,180
would be something that, um...
889
00:36:56,180 --> 00:36:58,020
..we would definitely
want to have a look at
890
00:36:58,020 --> 00:36:59,420
and understand
why that has happened.
891
00:36:59,420 --> 00:36:59,660
and understand
Is it acceptable
892
00:36:59,660 --> 00:37:00,980
Is it acceptable
893
00:37:00,980 --> 00:37:04,100
that your team members
have to work in 35-degree heat?
894
00:37:04,100 --> 00:37:06,620
And what I've said
is I will take away that issue
895
00:37:06,620 --> 00:37:10,140
and we will have a look at it
because it doesn't sound right.
896
00:37:11,980 --> 00:37:14,220
After the interview
with Four Corners,
897
00:37:14,220 --> 00:37:17,100
Coles said
it had put measures in place
898
00:37:17,100 --> 00:37:19,340
to help employees on hot days,
899
00:37:19,340 --> 00:37:23,140
including providing them
with chilled neckties.
900
00:37:23,140 --> 00:37:26,300
Oh, nice!
Yeah, cool, I'm here for support.
901
00:37:26,300 --> 00:37:26,540
Oh, nice!
Oh, yeah! That's great.
902
00:37:26,540 --> 00:37:28,500
Oh, yeah! That's great.
903
00:37:28,500 --> 00:37:28,740
Ana is part of the first national
Oh, yeah! That's great.
904
00:37:28,740 --> 00:37:32,340
Ana is part of the first national
strike by supermarket workers
905
00:37:32,340 --> 00:37:32,580
Ana is part of the first national
in Australian history.
906
00:37:32,580 --> 00:37:34,340
in Australian history.
907
00:37:35,300 --> 00:37:37,220
PROTESTER: What do we want?!
PROTESTERS: A living wage!
908
00:37:37,220 --> 00:37:38,820
When do we want it?!
Now!
909
00:37:38,820 --> 00:37:41,340
They walked off the job
several times last year
910
00:37:41,340 --> 00:37:43,980
asking for better wages
and conditions.
911
00:37:43,980 --> 00:37:45,660
When do we want it?!
Now!
912
00:37:49,020 --> 00:37:52,420
Coles is not just putting pressure
on staff and suppliers.
913
00:37:52,420 --> 00:37:52,660
Coles is not just putting pressure
There's a whole other area
914
00:37:52,660 --> 00:37:54,220
There's a whole other area
915
00:37:54,220 --> 00:37:54,460
where the supermarket giant is taking
There's a whole other area
916
00:37:54,460 --> 00:37:58,380
where the supermarket giant is taking
advantage of its market power.
917
00:37:58,380 --> 00:38:02,020
It's using this power
to push its own products
918
00:38:02,020 --> 00:38:02,260
It's using this power
without being upfront with consumers.
919
00:38:02,260 --> 00:38:04,860
without being upfront with consumers.
920
00:38:07,860 --> 00:38:09,460
You may not realise it,
921
00:38:09,460 --> 00:38:12,900
but Coles is a big player in wine.
922
00:38:16,100 --> 00:38:20,820
I've come to the Coles-owned Vintage
Cellars to pick up a bottle of red.
923
00:38:20,820 --> 00:38:22,700
There's no shortage of choice,
924
00:38:22,700 --> 00:38:27,420
but, like many consumers, I go
for a mid-price wine at eye level.
925
00:38:27,420 --> 00:38:27,660
but, like many consumers, I go
Just that one, thanks.
926
00:38:27,660 --> 00:38:28,940
Just that one, thanks.
927
00:38:31,900 --> 00:38:33,340
So, I decided on this one -
928
00:38:33,340 --> 00:38:35,580
the Two Churches Preacher Shiraz.
929
00:38:35,580 --> 00:38:37,060
I really like the label,
930
00:38:37,060 --> 00:38:40,660
but what really got me
was the story on the back.
931
00:38:40,660 --> 00:38:43,500
(DRAMATIC MUSIC PLAYS)
932
00:38:43,500 --> 00:38:48,060
It tells a tale of German immigrants
coming to South Australia,
933
00:38:48,060 --> 00:38:48,300
It tells a tale of German immigrants
of two Lutheran priests who fell out
934
00:38:48,300 --> 00:38:50,660
of two Lutheran priests who fell out
935
00:38:50,660 --> 00:38:55,460
and built rival churches
at opposite ends of the same village.
936
00:38:56,660 --> 00:39:00,020
Online it's promoted
as a tale from the Barossa Valley,
937
00:39:00,020 --> 00:39:03,020
where the priests
disagreed on almost everything
938
00:39:03,020 --> 00:39:07,700
except the quality of grapes grown
in the now-famous wine region.
939
00:39:14,660 --> 00:39:19,180
So, I'm here in the Barossa to find
out where these grapes are grown.
940
00:39:19,180 --> 00:39:19,420
So, I'm here in the Barossa to find
There it is.
941
00:39:19,420 --> 00:39:21,180
There it is.
942
00:39:32,860 --> 00:39:35,580
So, this is it,
the Light Pass Immanuel Church,
943
00:39:35,580 --> 00:39:35,820
So, this is it,
just like on the bottle here,
944
00:39:35,820 --> 00:39:37,340
just like on the bottle here,
945
00:39:37,340 --> 00:39:40,140
and over there -
that's the rival church.
946
00:39:40,140 --> 00:39:40,380
and over there -
It's just such a great story.
947
00:39:40,380 --> 00:39:41,540
It's just such a great story.
948
00:39:42,500 --> 00:39:45,140
(BIRDS TWITTER)
949
00:39:45,140 --> 00:39:47,820
Is this the home of Two Churches?
950
00:39:47,820 --> 00:39:50,860
I couldn't tell you that
from this bottle.
951
00:39:50,860 --> 00:39:54,220
Adrian Hoffmann is a fifth-generation
grape grower from the Barossa
952
00:39:54,220 --> 00:39:58,500
and says there's no
Two Churches vineyard around here.
953
00:39:58,500 --> 00:40:01,940
I think they're sort of misleading
the consumer to a certain degree.
954
00:40:01,940 --> 00:40:02,180
I think they're sort of misleading
It sounds like a Barossa story,
955
00:40:02,180 --> 00:40:03,420
It sounds like a Barossa story,
956
00:40:03,420 --> 00:40:03,660
but, um...yeah,
It sounds like a Barossa story,
957
00:40:03,660 --> 00:40:05,540
but, um...yeah,
you can't be guaranteed
958
00:40:05,540 --> 00:40:08,060
it's Barossa fruit,
unfortunately, so...
959
00:40:08,060 --> 00:40:10,300
So, where is the home
of Two Churches wine?
960
00:40:10,300 --> 00:40:12,900
And what about the address
on the back? What does that tell me?
961
00:40:12,900 --> 00:40:14,500
Well, that's the first thing
I'd sort of go to.
962
00:40:14,500 --> 00:40:14,740
Well, that's the first thing
You look at where it's produced.
963
00:40:14,740 --> 00:40:15,980
You look at where it's produced.
964
00:40:15,980 --> 00:40:18,900
And this says
it's Hawthorn East, Victoria.
965
00:40:29,660 --> 00:40:32,180
So, here I am in suburban Melbourne.
966
00:40:32,180 --> 00:40:34,180
Turns out
this is the closest there is
967
00:40:34,180 --> 00:40:37,060
to a home
for the Two Churches Shiraz.
968
00:40:37,060 --> 00:40:40,420
Not that it says Coles
anywhere on the bottle.
969
00:40:40,420 --> 00:40:44,860
Coles says it has
around 260 private label wines
970
00:40:44,860 --> 00:40:45,100
Coles says it has
available through its liquor stores.
971
00:40:45,100 --> 00:40:47,380
available through its liquor stores.
972
00:40:48,380 --> 00:40:50,980
ROD SIMS:
I mean, the test under law is
973
00:40:50,980 --> 00:40:51,260
would a reasonable consumer
be misled?
ROD SIMS:
I mean, the test under law is
974
00:40:51,260 --> 00:40:53,140
would a reasonable consumer
be misled?
975
00:40:53,140 --> 00:40:53,380
would a reasonable consumer
Now, if on the label of the bottle
976
00:40:53,380 --> 00:40:55,620
Now, if on the label of the bottle
977
00:40:55,620 --> 00:40:57,540
you're telling a story
978
00:40:57,540 --> 00:40:57,740
you're telling a story
that's unrelated to the product,
979
00:40:57,740 --> 00:41:00,260
that's unrelated to the product,
980
00:41:00,260 --> 00:41:04,860
then I think that runs
a serious risk of being misleading.
981
00:41:04,860 --> 00:41:05,100
then I think that runs
Why not put your name on it?
982
00:41:05,100 --> 00:41:05,940
Why not put your name on it?
983
00:41:05,940 --> 00:41:09,660
Why not say it's Coles Chardy
or Supermarket Shiraz?
984
00:41:09,660 --> 00:41:13,020
Why are you hiding
the fact that you own this brand?
985
00:41:13,020 --> 00:41:13,300
So, in terms of communicating
with customers,
Why are you hiding
the fact that you own this brand?
986
00:41:13,300 --> 00:41:17,660
So, in terms of communicating
with customers,
987
00:41:17,660 --> 00:41:21,580
there are practices across
many retailers and many industries
988
00:41:21,580 --> 00:41:21,860
there are practices across
many retailers and many industries
where brand...
Take that point -
989
00:41:21,860 --> 00:41:23,340
where brand...
Take that point -
990
00:41:23,340 --> 00:41:25,340
shouldn't you say...shouldn't
you be honest with the consumer
991
00:41:25,340 --> 00:41:25,580
shouldn't you say...shouldn't
and say, "This is a Coles wine"?
992
00:41:25,580 --> 00:41:28,460
and say, "This is a Coles wine"?
993
00:41:28,460 --> 00:41:30,220
But WHY do it?
994
00:41:30,220 --> 00:41:33,340
We're very comfortable
that the branding approach
995
00:41:33,340 --> 00:41:34,980
that we have in our liquor brands
996
00:41:34,980 --> 00:41:38,020
is one that resonates
with customers.
997
00:41:38,020 --> 00:41:38,260
is one that resonates
After our interview,
998
00:41:38,260 --> 00:41:39,700
After our interview,
999
00:41:39,700 --> 00:41:42,940
Coles removed any reference
to the Barossa
1000
00:41:42,940 --> 00:41:46,420
from its online promotion
of Two Churches.
1001
00:41:51,340 --> 00:41:55,100
From prime shelf space
to prime real estate,
1002
00:41:55,100 --> 00:41:55,340
From prime shelf space
there's a more fundamental issue
1003
00:41:55,340 --> 00:41:56,860
there's a more fundamental issue
1004
00:41:56,860 --> 00:41:57,100
stifling competition
there's a more fundamental issue
1005
00:41:57,100 --> 00:42:00,100
stifling competition
in this country -
1006
00:42:00,100 --> 00:42:00,340
stifling competition
access to land.
1007
00:42:00,340 --> 00:42:02,580
access to land.
1008
00:42:02,580 --> 00:42:05,900
An industry insider
has told Four Corners
1009
00:42:05,900 --> 00:42:10,500
about a tactic
used to keep competitors out.
1010
00:42:10,500 --> 00:42:13,900
It involves buying up
so-called spoiler sites
1011
00:42:13,900 --> 00:42:14,140
It involves buying up
right across the country.
1012
00:42:14,140 --> 00:42:15,900
right across the country.
1013
00:42:15,900 --> 00:42:20,020
A prime example
is on Sydney's Upper North Shore.
1014
00:42:20,980 --> 00:42:23,300
Woolworths has spent almost a decade
1015
00:42:23,300 --> 00:42:26,300
trying to redevelop
this council car park
1016
00:42:26,300 --> 00:42:29,700
into a shopping centre
and supermarket.
1017
00:42:29,700 --> 00:42:32,100
In exchange for access to the land
1018
00:42:32,100 --> 00:42:37,180
Woolworths is offering to build
a new library and community hall.
1019
00:42:37,180 --> 00:42:37,420
Woolworths is offering to build
It's already purchased three shops.
1020
00:42:37,420 --> 00:42:40,740
It's already purchased three shops.
1021
00:42:40,740 --> 00:42:42,820
If Woolworths gets the green light,
1022
00:42:42,820 --> 00:42:43,060
they'll be part
If Woolworths gets the green light,
1023
00:42:43,060 --> 00:42:46,420
they'll be part
of the new shopping complex.
1024
00:42:46,420 --> 00:42:51,620
But they also have the added benefit
of keeping rivals out.
1025
00:42:52,820 --> 00:42:54,940
ROD SIMS:
Oh, look, it's a huge problem,
1026
00:42:54,940 --> 00:42:56,980
but you can understand
why it's happened.
1027
00:42:56,980 --> 00:42:57,220
but you can understand
Coles and Woolworths
1028
00:42:57,220 --> 00:42:58,620
Coles and Woolworths
1029
00:42:58,620 --> 00:43:03,340
want to maintain as concentrated
a market as possible.
1030
00:43:03,340 --> 00:43:07,220
There's no doubt
it's aimed at reducing competition.
1031
00:43:07,220 --> 00:43:11,820
So, therefore you can say
it's anti-competitive in that sense.
1032
00:43:11,820 --> 00:43:12,060
So, therefore you can say
Proving that is tricky.
1033
00:43:12,060 --> 00:43:15,540
Proving that is tricky.
1034
00:43:18,140 --> 00:43:22,100
Does Woolworths
use land acquisition or land banking
1035
00:43:22,100 --> 00:43:24,340
as a way to reduce competition?
1036
00:43:24,340 --> 00:43:27,380
BRAD BANDUCCI: So, that's not
something that we actively do.
1037
00:43:27,380 --> 00:43:27,620
BRAD BANDUCCI: So, that's not
We do, in some cases buy land.
1038
00:43:27,620 --> 00:43:29,180
We do, in some cases buy land.
1039
00:43:29,180 --> 00:43:29,420
This is one of the pieces of land
we've bought and developed.
We do, in some cases buy land.
1040
00:43:29,420 --> 00:43:32,340
This is one of the pieces of land
we've bought and developed.
1041
00:43:32,340 --> 00:43:35,340
Uh... But it's not a way
of trying to drive competition.
1042
00:43:35,340 --> 00:43:35,580
Uh... But it's not a way
It'll be through,
1043
00:43:35,580 --> 00:43:36,820
It'll be through,
1044
00:43:36,820 --> 00:43:37,020
It'll be through,
"We need a store in a new area,"
1045
00:43:37,020 --> 00:43:38,340
"We need a store in a new area,"
1046
00:43:38,340 --> 00:43:40,460
and, so, you'll buy some land
1047
00:43:40,460 --> 00:43:40,700
and wait for the community
and, so, you'll buy some land
1048
00:43:40,700 --> 00:43:44,060
and wait for the community
to start moving into the area.
1049
00:43:45,260 --> 00:43:50,460
German supermarket giant Kaufland
would likely disagree.
1050
00:43:50,460 --> 00:43:54,740
It halted plans
to open supermarkets here in 2020.
1051
00:43:54,740 --> 00:44:00,420
A lack of suitable locations
was cited as one of the reasons.
1052
00:44:00,420 --> 00:44:00,660
A lack of suitable locations
(ENGINES ROAR)
1053
00:44:00,660 --> 00:44:03,060
(ENGINES ROAR)
1054
00:44:08,700 --> 00:44:11,500
The government
is making all the right noises
1055
00:44:11,500 --> 00:44:14,700
about tackling the power
of Coles and Woolworths.
1056
00:44:15,660 --> 00:44:18,660
Our government
is prepared to take action
1057
00:44:18,660 --> 00:44:20,980
to make sure that Australians
1058
00:44:20,980 --> 00:44:21,220
to make sure that Australians
are not paying $1 more
than they should
1059
00:44:21,220 --> 00:44:24,660
are not paying $1 more
than they should
1060
00:44:24,660 --> 00:44:24,900
are not paying $1 more
for the things that they need.
1061
00:44:24,900 --> 00:44:26,580
for the things that they need.
1062
00:44:26,580 --> 00:44:26,820
All of these processes
are about one thing,
for the things that they need.
1063
00:44:26,820 --> 00:44:29,420
All of these processes
are about one thing,
1064
00:44:29,420 --> 00:44:32,380
and that's about seeing
if we can exert more competition.
1065
00:44:33,340 --> 00:44:36,060
But, to actually bring down prices,
1066
00:44:36,060 --> 00:44:37,860
it will need to implement reform
1067
00:44:37,860 --> 00:44:38,100
that previous governments
it will need to implement reform
1068
00:44:38,100 --> 00:44:41,100
that previous governments
have ignored.
1069
00:44:43,500 --> 00:44:45,980
Former Competition boss, Rod Sims,
1070
00:44:45,980 --> 00:44:50,340
says the ACCC needs greater powers
to block mergers,
1071
00:44:50,340 --> 00:44:51,900
making it harder for the big two
1072
00:44:51,900 --> 00:44:57,700
to gobble up rivals, buy land
and move into other industries.
1073
00:44:57,700 --> 00:45:00,780
I think there's no doubt if you want
lower supermarket prices,
1074
00:45:00,780 --> 00:45:04,380
if you want consumers to pay less
for goods in supermarkets,
1075
00:45:04,380 --> 00:45:05,740
change the merger laws.
1076
00:45:07,300 --> 00:45:10,620
The Greens, who are chairing
the upcoming Senate inquiry,
1077
00:45:10,620 --> 00:45:10,860
The Greens, who are chairing
are exploring more radical change,
1078
00:45:10,860 --> 00:45:13,180
are exploring more radical change,
1079
00:45:13,180 --> 00:45:13,420
including breaking up
are exploring more radical change,
1080
00:45:13,420 --> 00:45:17,140
including breaking up
Coles and Woolworths.
1081
00:45:17,140 --> 00:45:17,380
including breaking up
The acid test on the Prime Minister
1082
00:45:17,380 --> 00:45:20,540
The acid test on the Prime Minister
1083
00:45:20,540 --> 00:45:20,780
is not going to be
what reviews or what processes
The acid test on the Prime Minister
1084
00:45:20,780 --> 00:45:24,740
is not going to be
what reviews or what processes
1085
00:45:24,740 --> 00:45:24,980
is not going to be
he's prepared to put in place.
1086
00:45:24,980 --> 00:45:26,620
he's prepared to put in place.
1087
00:45:26,620 --> 00:45:26,860
he's prepared to put in place.
It'll be what action
he is prepared to take.
1088
00:45:26,860 --> 00:45:29,460
It'll be what action
he is prepared to take.
1089
00:45:35,980 --> 00:45:37,460
Whatever happens,
1090
00:45:37,460 --> 00:45:41,980
it's already too late
for cherry grower Michael Cunial.
1091
00:45:43,860 --> 00:45:46,780
So, what do you do? Do you literally
put the bulldozer through here?
1092
00:45:46,780 --> 00:45:49,500
We just get our bulldozer
and start pushing.
1093
00:45:49,500 --> 00:45:49,740
We just get our bulldozer
Yeah.
1094
00:45:49,740 --> 00:45:50,740
Yeah.
1095
00:45:50,740 --> 00:45:52,140
Just push them up into piles.
1096
00:45:56,540 --> 00:45:58,220
I don't mind people making money.
1097
00:45:58,220 --> 00:46:01,220
Everyone's got to make a little bit
of money on the way through.
1098
00:46:01,220 --> 00:46:03,940
But they're just making so much.
1099
00:46:03,940 --> 00:46:06,500
It's getting to the point, you know,
1100
00:46:06,500 --> 00:46:09,140
the industry
can't absorb their greed.
1101
00:46:11,020 --> 00:46:13,260
I don't know what the answer is.
1102
00:46:13,260 --> 00:46:19,420
I'd like to know it because we would
keep reinvesting in our orchards.
1103
00:46:19,420 --> 00:46:19,660
I'd like to know it because we would
But...
1104
00:46:19,660 --> 00:46:21,380
But...
1105
00:46:21,380 --> 00:46:24,060
..I can't see a huge silver lining,
1106
00:46:24,060 --> 00:46:25,380
so, we're out.
1107
00:46:25,380 --> 00:46:27,780
We're just getting out. Yep.
1108
00:46:31,180 --> 00:46:33,220
(THEME MUSIC PLAYS)
1109
00:46:48,420 --> 00:46:50,420
Captions by Red Bee Media
1110
00:46:50,420 --> 00:46:50,660
Copyright
Australian Broadcasting Corporation
Captions by Red Bee Media
1111
00:46:50,660 --> 00:46:52,620
Copyright
Australian Broadcasting Corporation