Graeme Samuel embarked on a media blitz after the launch of the ACCC’s 700-page grocery inquiry report yesterday and sounded very well informed on all the issues.
This should come as no surprise given the nation’s long-serving competition cop is one of the sharpest intellects corporate Australia has produced who also has considerable personal experience with retailing.
Samuel was a director of music retailer Brashes when it collapsed in 1993 and his family also has extensive retail interests, most notably through its shareholding in the burgeoning DFO chain which has had numerous legal fights with the big boys such as Westfield. The scale of Samuel’s retail interests and potential conflicts was canvassed in this Crikey story in February 2006.
The ACCC came out strongly on restrictive planning laws in its report, focusing on the way competitors lodge objections to rival developments and big retail chains sign leases with landlords which prohibit competitors from being allowed to open up in the same centre.
It is ironic in the extreme that Samuel’s family continues to profit directly from the only retail developments exempted from state planning laws – those at Federally regulated airports.
The DFO chain has specialised in airport developments and Samuel retained his interest in its operations at Brisbane Airport, Essendon Airport and Moorabbin airport after becoming ACCC chairman.
That said, there are plenty of other worthwhile revelations in the ACCC report which has put Woolworths under the pump, especially given that grocerychoice.gov.au reveals it is more expensive than Coles in 52 of the 61 regions.
The ultimate measure of any regulatory response against Woolworths will be from its reported profits and share price. The stock is up another 2% to $26 today so shareholders and analysts are clearly not at all worried about Kevin Rudd.
This is largely because the ACCC doesn’t have any powers of forced divestiture, which is what the nation needs to wind back the 70% market share that Coles and Woolies have in the dry grocery market.
The fall of Franklins in 2001, when Woolworths picked up 67 of its best stores, marked the moment when its power really got out of hand, so it is no surprise that the share price has almost tripled since then.
Forcing Coles and Woolies to sell a combined 50 stories to the demonstrably cheaper Aldi would do the trick, but no-one is talking about introducing such powers which operate in other countries such as the USA.
Listen to last night’s discussion about the ACCC report with Lindy Burns on 774 ABC Melbourne.