The Woolworths board and senior management didn’t know what hit them at yesterday’s AGM and today they are surveying arguably the biggest single hit to the company’s once great brand.

Never before have chairman James Strong and CEO Michael Luscombe been forced to engage in such detail about their iniquitous 12,000-strong pokies operation.

And never before has it generated so much media attention. The 6pm channel Seven news ran it third from the top wrapping in the comments from Tim Costello and Nick Xenophon out of Canberra with the shareholder action and finishing with one shareholder declaring they were going to sell out.

The AFR’s page 48 lead was headlined “Strong take stand in favour of pokies”. The pokies controversy even made this story on The Wall Street Journal website.

In what must be his umpteenth interview with Ali Moore over the years, James Strong looked very uncomfortable batting off these awkward questions broadcast on Lateline Business about why Wesfarmers had moved on kids in venues yet Woolies was resisting.

The whole exercise was a classic case of enough rope because so many of the statements made by Luscombe and Strong just do not stand up to scrutiny.

When challenged about children in venues, the best Luscombe could say was that some people have wedding receptions at their pubs and you can’t ban children from attending weddings.

As a Manningham City Councillor contemplating our new pokies policy, I’ve been to all of the local Woolies pokies venues over the past few weeks and the marketing to children is extraordinary.

For instance, check out this photo from outside the Cherry Hill Tavern in East Doncaster.

stephen

Over at the Doncaster Inn, one of the 10 biggest pokies venues in Melbourne, there was another sign promoting kids birthday parties.

You can clearly see the pokies room from the kids game area at the Doncaster Inn and children are invited to play a game called “A winner every time”. Talk about indoctrination.

As Ian Verrender noted in The SMH , the decision by Woolies to outsource management of its pokies division to Alan Bond’s former business partner Bruce Mathieson has been a financial success that “left Coles eating dust”.

But the social flipside of that financial performance is a pubs empire that overtly markets to children in an attempt to get their parents hooked on the pokies.

All of this was put to the full board in no uncertain terms yesterday.

Paul Bendat from www.pokieact.org lead the charge by teaming up with Senator Nick Xenophon to get the necessary 100 signatures forcing Woolies to send an anti-pokies statement to all 400,000 shareholders.

The company was then hit with numerous negative written questions and come the AGM there were eight different speakers against the pokies, only three of which were associated with our “vocal action group” as James Strong described us.

I gave the board the biggest spray dished out to any company this year. Have a listen.

All up it was a very effective exercise in social activism through shareholder avenues. The only question now is whether the board finally starts to match the Wesfarmers move of exiting the industry or at least agreeing to the recommendations from the latest Productivity Commission report.

If not, it will time to call an EGM and propose changes to the Woolworths constitution that limit involvement in gambling and changes to the board, starting with the “do nothing” chairman James Strong.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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