Woolies and Coles to pass on import savings? Pull the other one, mate … it plays Waltzing Matilda.

Guest Blogger: Sharyn Lilleyauthor

ABC TV’s Q&A show recently had politicians and authors on the show. Surprisingly, given how large the topic is, the subject of the Productivity Commission’s report into abolishing our current Parallel Import Restrictions only came up in the last few minutes. However that was long enough for Finance Minister, Lindsay Tanner to say something that really made me angry.

Regular readers are going to be aware that the UK and the US are most definitely not lifting their own industry protection. Further, that the UK does not levy VAT on books sold there, and that the US, with its massive population of over three hundred and four million people, have equally massive print runs, creating an economy of scale very few other countries could hope to compete with.

Of course this is also why we currently find so many remaindered books in places like Go-Lo, and The Reject Shop. The US has thousands of remaindered books, because they print so many.

So what did Mr Tanner say to rile me?  http://www.abc.net.au/news/stories/2009/08/27/2669201.htm It was his comment in response to Richard Flanagan, on the subject of the big retailers who want the PIRs abolished, Richard said, “The evidence is that they are not serving the Australian consumer. Why hand the book industry to them as well?”

Mr Tanner replied: “I don’t agree with your assessment. I don’t think Coles and Woolworths are by any means saintly organisations, but I tell you what, the ….. positive impact on price on a lot of products over the years, which nobody notices, has been very significant”.

Positive impact? I sat down and immediately sent this letter to him.

Mr Tanner,

I refer to your appearance on the ABC1’s show Q&A last night. Specifically your comment about the significant positive impact on prices of Coles and Woolworths.

Under the previous Labor Government, Paul Keating lowered the trade tariffs on imports, assuring Australians that this would bring cheaper food. I believe one of the members of the committee that presented the Jet Fresh working paper, was our current Treasurer, Wayne Swan. I remember the exhortations of cheaper food well. I was one of those who lost their job because of the cheap imports, and demands by the large retailers, that closed down many local small market gardens.

I would like to draw your attention to a recent test undertaken by Craig Kelly, of the Southern Sydney Retailers Association, that proves how comprehensively the big retailers take advantage of the Australian consumers, owing to the dysfunctional market conditions that prevail in our country. I quote from the report:

“The ACCC Grocery Inquiry tipped us off. At the inquiry, Woolworths admitted under cross examination that they make a higher margin on their product, they make higher profits and higher mark-ups in Australia than they do in New Zealand,” Craig said.

Some of the price comparisons of his test on Australian made and/or packed goods, that are then transported to New Zealand, that are not subject to GST here, but are in New Zealand:

Vegemite NZ – $2.93 in New Zealand dollars. $2.99 in Australia. But convert to Australian dollars, the Kiwi buy is $2.33 and if you take off the GST, it’s $2.07.Kraft Peanut Butter – $4.44 in Auckland. $3.95 in Australia. Convert to Australian dollars,$3.52. Take off the GST, it’s $3.13.
And our Golden Circle Pineapple Pieces – $1.48 at Woolies in Auckland $1.89 here. In Australian dollars it’s $1.17 and with no GST down to $1.04.

The full report can be found here: http://au.todaytonight.yahoo.com/article/5671473/consumer/paying-aussie-products-nz

Mr Flanagan asked you why would you hand the book industry to the giant retailers?

If this current Labor Government chooses to follow the skewed and limited options examined and offered by the Productivity Commission’s report I believe our future generations will be asking the same question, for I know many farming families have already faced the “Why didn’t you fight harder?” question.

A better option for the Australian book buyers, and the Australian publishing industry would be a comprehensive series of round table talks with all parties involved: the printing industry representatives; educators(teachers, librarians); main stream publishing houses; small press; authors; booksellers, independent, online and large chain retail; in each State and Territory. A series of talks to enable us to have a decent base line of unit costs; to look at how people are accessing books, and a workable guide for allowances in technological advances. Talks that would enable the industry as a whole to see where fat could be trimmed in order to lower the RRP on books.

Thank you for your time, I hope you will consider well the real price of opening up our markets when our major trading partners are not lifting their own protections.

Sharyn Lilley

P.S. Positive impact on prices? Sure, unless you are one of those farmers surviving on $15,000 a year. Or one of the thousands who lost their jobs in an industry they loved. The biggest difference between our grocery market and New Zealand’s is the Woolies and Coles duopoly – there, there is one multinational giant and one New Zealand owned and run company.

It seems keeping a local in business in the country is an advantage.

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2 thoughts on “Woolies and Coles to pass on import savings? Pull the other one, mate … it plays Waltzing Matilda.

  1. I cannot understand why our governments (of whichever ideology) feel the overwhelming desire to hold ourselves to a different standard to other countries, if they are protecting THEIR markets, why the hell aren’t we protecting OURS??? The so-called level playing field doesn’t exist while the other team has a wall in front of their goal posts.

  2. Addendum: The comment that so riled me by Mr Tanner, the one that implied he had considered knowledge of this ‘positive impact’ over a number of years, was cast in to doubt for me today with his reply to my letter.

    Dear Ms Lilley

    Thanks for your email. I’m not in a position to debate the Australia/New Zealand comparison you make, but I’d caution you against drawing any conclusions based from the date you cite. Prices change all the time in supermarkets and factors like exchange rate movements and wage differentials complicate the comparison.

    Yours sincerely

    Lindsay Tanner

    Apart from the implicit backpedalling on his televised remarks that no one noticed the big retailers positive impact on prices, I found this caution rather patronising, so I replied.

    Dear Mr Tanner,

    I have read the Productivity Commission’s report several times, and not noticed a break down of wage differentials, exchange rates, taxation rates and varying price discounting in supporting data for their comparisons of book prices. If they examined this issue thoroughly, why was this not included?

    Once more I ask that you consider well the real costs involved in opening up our market, when our competitors are not relinquishing their own protection.

    Thank you
    Sharyn Lilley

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