Quoth Dolly Downer, via Ken at Surfdom, who observes that the government have been rattled by Rudd’s announcement on supermarkets. The price-monitoring thing is bound to be Swannie’s idea. He’s been getting loads of press in local papers for years - he coordinates his own monitoring. People really do care if a loaf of bread is cheaper at Woollies or Coles today. From memory, you can look on his website to find out - kind of similar to the petrol price watch thingamebobs that newspaper websites often run.
Costello couldn’t have been more clueless on the 7 30 report tonight - no one gives a rats about a quarterly average figure posted on the ABS website for the price of baked beans in each city. What does get to people is the fact not just that food tends to rise much more in price than the CPI but also the way the chains do their own version of what goes on with petrol - raising and lowering prices constantly.
Dollar Sweetie demonstrated yesterday on radio he didn’t know whether a loaf of bread or a carton of milk was more expensive. Blokes like him with six figure salaries wouldn’t care anyway, and would probably whinge mightily if they ever had to do their own shopping, and console themselves with the points they’d earn by whacking it on the platinum Amex. This is the guy who complains that his salary is far below what his mates in Collins St get. None of them would have a clue about how most people live.
I’m coming to hate my local Coles. The prices are more exxy than other Coles around the joint because there’s no competition. They never keep the shelves fully stocked, and I am getting so frustrated with the decline in brand choice as they try to force everyone to buy their own crummy brand. Coles is notorious in Brissie for differential pricing according to perceived wealth of suburb as well. I hope Wesfarmers give them a good shakeout. IGA are opening up the road soon, and I know where I’ll be going, even though Coles is only five mins walk. These sort of issues might be derisory to Dolly, but there’s no doubt that they do tap in well both to people’s lives and their experience in the real economy.
Elsewhere: Over at Catallaxy, the libertarians are furiously defending the rights of a big business duopoly to collectively screw its individual customers. Oh, and it wouldn’t be a good libertarian post these days without a good old “Chavez and Mugabe are evil” angle. Whatever that has to do with ensuring competition in Australian grocery retail, I have no idea. Provide consumers with information? Stamp out price gouging and anti-competitive behaviour? We’re on the road to serfdom!
And over at Catallaxy, they’re comparing it to something that Mugabe or Chavez would come up with.
All this talk is making me think of something I recall reading in Monopoly Capital (which I still need to finish). How inflation may cause prices to rise but they use it as an excuse to raise it even more to add some more to their bottom lines. The drought forces prices up, Coles and Woolies push it up a bit more and hope everyones none the wiser.
Thanks for the link, Oz. Good old libertarians - furiously defending the rights of a big business duopoly to collectively screw its individual customers. Oh, and it wouldn’t be a good libertarian post these days without a good old “Chavez and Mugabe are evil” angle. Whatever that has to do with ensuring competition in Australian grocery retail, I have no idea.
Not quite sure how putting the lid on prices spurs competition. Generally new folks enter a market when they perceive excess profits are being made by the established bunch. I would hazard a guess that trying to shame the majors into keeping a lid on prices would help prevent this from happening.
One difficulty with comparing prices for fresh produce is you also have to take into account quality. One Coles near my parents place is cheaper than one further away, but the quality is also noticeably lower (the one further away is in a more affluent area). How are they going to take those qualitative properties into account?
Though I do my fruit and veg shopping at the more specialised markets rather than supermarkets - not only is it cheaper, but the quality is much better. I don’t really understand why more people don’t do it (except for laziness).
Look, if it’s good politics I suppose I’m not going to object too loudly but it does strike me as rather cynical politicking.
Does anybody seriously think that Labor would start imposing price controls on supermarkets?
I don’t think they’re suggesting that. But stamping out price gouging and anti-competitive behaviour seems something that people shouldn’t be worried about, and indeed should applaud. That’s why I’m puzzled by the Catallaxy mob’s reaction.
So Rudd proposes that the ACCC monitor and publish supermarket prices, improving the accuracy of the information that consumers have available to make decisions, bringing the retail food market in the real world a little close to the standard economic models that rely on the assumption that agents in the market have access to “perfect information”.
And the Catallaxians object to this?
As soon as I get over today’s bout of absurdity overload, I’ll have to check out the comments on HeathG’s post and find out what the principled objections are. Think there’s an “if any” missing from that last sentence somewhere.
By the way, there is already legislation on pricing. Another fine initiative of the Hawke/Keating governments to civilise capitalism!
I must say I’m now really looking forward to the coming election debate where that old standby classic question, “Do you know what’s the price of a 700ml container of milk?” will surely surface again with a new twist or too.
“Under my Goverment’s proven track record of sensible economic management, all Australian families will never feel the need to ask that question.”
“Our innovative and family friendly policies will allow you not just to price, but also buy milk online.”
“Is that a 700ml container of full cream milk, or skinny milk, or protein rich milk, or skinny milk with added fibre, or protein rich low fat milk, or protein rich milk low fat with added fibre or soy milk with extra vitamins?”
Hmmm….
http://www.news.com.au/story/0,23599,22056693-421,00.html
Costello:
It’s all about the economic management!
Who’s defending a duopoly? Libertarians argue that competition is better than monopolies or duopoly. If a company finds itself in a position of local monopoly, it will exploit that. Libertarians argue that regulations should be minimal in order to provide as low a regulatory barrier to new entrants. More regulations, especially pricing regulations, would simply put off new entrants from entering the market.
Here’s a question for you: In a suburb with only a state funded school, who do you complain to about lack of competition when the quality of the school is poor?
Typical theology.
The cost of the “regulation” which is not what this proposal is anyway would not be borne by the retailers. As Gummo said, it’s something that aims to increase transparency in a market.
As to “new entrants”, what piffle. Do you really think it’s the “cost of regulation” that creates a barrier to the establishment of a Woollies or an independent retailer in a suburb with only a Coles? We’ve lost a service station in New Farm because of the land values rendering retail business uneconomic. Try to find one in Bondi. There’s a reason why Aldi establishes itself in the outer suburbs - and it’s not a full range competitor, but a low end discounter. And what do you imagine the cost of the supply chains, logistics, bargaining power with suppliers, etc. would be to a new entrant as opposed to the duopoly? Not to mention the way that the established business uses economies of scale to kill competition through discounting. You “libertarians” are living in a fantasy land which effectively justifies the continued market power of big business. It’s no surprise that it’s been Labor governments that have been the only ones who’ve done anything to ensure more competitive consumer markets in Australia.
Sure but then you oppose measures which would promote it because you have a fetish for opposing state action. The result being - markets become oligopolistic and duopolistic.
More spin from the Shemaham re Rudd’s plan.
It’s a grab for headlines that’s worked and shown how adept Rudd is politically, but it’s not a tax policy or an anti-inflation blueprint that could really have an impact.
Diddums.
Frank: it’d obviously lead to people realising the massive markup going into Dennis’s snags
“The Price of Carrots Will Be Determined By Mr. Rudd?”
Well, as long as the price of carrots is not determined by Mr. Fudd, I don’t have a problem with it.
So Kim, what is your solution? Are you going to legislate for competition? Force Aldi to open stores in inner city areas? Requisition land from landowners and hand it to competitors?
I don’t think inner city affluent suburbs are struggling to afford to pay their grocery bills, so who is your competition policy aimed at? Suburbs that only have Myers rather than Target and Big W’s? If Aldi are building in cheaper areas where incomes are lower and are lowering the price of groceries, where is the problem?
Regulatory cost is only one component. As you’ve pointed out, land values are another, and in areas where land value is high generally points to high incomes, people who can afford expensive groceries. Arguing about the rich having expensive groceries is hardly very progressive of you.
Anyway, land value doesn’t make your petrol station uneconomic, the land owner is only trying maximise their return. Even profitable businesses can be using resources that others value more greatly and are therefore prepared to pay a price for. It is called efficiently allocating resources according to the greatest need, and someone’s need to build on your local petrol station’s land outweighed your need to buy petrol locally.
The petrol station owner could have raised the price of fuel to match the return they could get by selling the land, only you’d cry wolf that they were price gouging, and you would have driven to the nearest petrol station that charged less, which is what you are presumably doing now anyway. No one has stopped you from buying fuel nor reduced its availability, only its convenience and the marginal cost of having to drive further to get it. You can’t dictate that people should provide you with services, not unless you’re prepared to back it up with violence.
Arguing that deep discounting by the majors is bad in a thread about over priced groceries is like complaining that there is too much water in a drought. What do you want them to do, keep the prices at the same level as before or compete nicely and just accept that their competition is going to take some of their custom? How do you think the shareholders of the company feel about you dictating to them how much they can earn from their investment? Sure enough, people will stop investing in retail, and there will be even less shops and choice and prices will be higher.
Economic reality has a way of working around any type of regulation, people simply will divert resources as they see fit. If one avenue is restricted, they will pursue another. It takes a pretty tricky government to prevent all alternative uses of resources except those that it approves. The Russians tried, the Chinese tried it, the North Koreans, even the Germans tried it, and they all turned out fantastic experiments, didn’t they?
That’s not necessarily so at all. Inner city suburbs - at least in Brisbane - still have a large population on very low and/or fixed incomes - welfare recipients and pensioners for instance (ownership of valuable real estate doesn’t translate to cash in many cases).
Aside from that, all I see in your response is yet more justification for the market power of large business.
There’s no magic bullet but vigorous enforcement of competition law would help. I take it that’s regarded as unwarranted interfence by the state by “libetarians”? Fine, but you won’t get competitive markets then - it’s a recognition that these markets in which economies of scale are key and capital costs a huge barrier to effective competitors entering need to be regulated. If you oppose that, fine. But stop pretending that markets will magically ensure competition.
Oh, and if some kind libertarian could enlighten me about what’s so wrong about promoting consumer access to pricing information, I’d be grateful.
And what happens if one of these unregulated avenues screws you financially or even worse sells you fatally tainted foodstuffs?
Yes I know, sue ‘em and/or let the market route around them. I’m really starting to get the impresson that a true hardcore libertarian paradise will basically be populated by the quick, the dead and lotsa lotsa lawyers.
Y’know, the big problem with serious libertarian dreams of a better world is that their functional reality rests on the concept of a bunch of committed individualists all hoping that everyone else who makes their quotidian life function thinks just like them.
Many really impractical, sometimes murderous, often ludicrous and frequently disfunctional systems for organising large human communities have tried out over the past 20,000 years or so - like theocracy, facism and communism to name just a few.
And pretty all of them got at least a decade or two run, and often much more, among large homo sapien groupings before collapsing under their internal contradictions nad/or being taken out by smarter, tougher competitors.
Except libertarianism. No one has ever tried or wants to try it on a big scale. There have been odd cults and remote communities who took a punt on it. But in the long run, it seems most humans don’t want to retreat to the primate tribes from whence we came.
“But, but, but we think there should be regulation and organisation around some key factors like defence and legal systems” I hear some say. In that case, you’ve already accepted the concept of the tyranny of the masses and now basically sound like an Enron lobbyist - ie: just regulate what’s good for us particular guys getting richer and absolutely no more.
Disclaimer: I’m in full philosphical accord with the libertarian attitude that what you do with your body and with consenting adults, provided it does no harm to the life of others, should not be subject to the reguation of others.
What I do object to is the often fanatical belief held by die hard libos that Government is an unnecessary evil and that anyone who doesn’t get it is an enemy and not a potential convert. Which to be fair though, is a fairly typical cult mentality.
And just to twist the knife a bit, I find it very amusing that so many of the Aus blogsphere hardcore libos seem to hail from the suburbs of Australia’s five big cities, one of the most cosseted and tax payer subsidised environments on the planet.
Interesting timing. Acnielsen starts polling today doesn’t it?
“Look, if it’s good politics I suppose I’m not going to object too loudly but it does strike me as rather cynical politicking.”
It is good politics. The takeout message is that Kevin is intent on lowering supermarket prices. He won’t, of course, but no-one ever suffered politically from boldly stating an aspiration to do so. I’m not sure how much time Kevin and Therese would have available to spend poring over comparative, multi-site food retail outlet pricing data, before ripping into the weekly shop, but it’s the thought that counts.
As others have pointed out, prices vary widely by outlet within the big chains dependent on location, customer demographic and competition, so a flat, Coles-Woolies pricing comparison wouldn’t tell you a whole lot.
Carrots are about two dollars a kilo. One of the cheapest of all vegetables.
Whereas parsnips can be as much as $8 a kilo and leeks are sometimes sold for $2 each.
What does get to people is the fact not just that food tends to rise much more in price than the CPI but also the way the chains do their own version of what goes on with petrol - raising and lowering prices constantly.
Yes, well, the ACCC has been rather active on that front without making any discernible difference.
Costello couldn’t have been more clueless on the 7 30 report tonight - no one gives a rats about a quarterly average figure posted on the ABS website for the price of baked beans in each city.
But amongst Rudds proposals were - the regular publishing of a list of prices:
The ACCC will establish a dedicated website to publish this pricing snapshot - this very act will serve to increase transparency in the market place and in so doing exert greater competitive pressure on the retail market.
So Rudd’s proposal, in essence, appears to be that the regulators should do what they already do, only more so.
OK, sorry for misunderstanding what Labor is proposing to do. How could libertarians possibly be unhappy with a more informed market? Isn’t that Adam Smith’s wet dream?
Kevin Rudd will not affect these prices at all and nor should he. This is the lowest and most foolish brand of populist politics.
But you are right Mark - its a smart political move - and that’s what you care about.
You don’t like Coles - apart from Aldi it is cheapest - and plan to shop ‘up the road’. That’s what its all about - competition and choice. Why not a sensible post that emphasised these issues?
In fact, Rudd has no reasonable basis for his inquiry at all:
And Mr Rudd admitted he had no evidence of anti-competitive conduct by supermarket chains
Harry, at the moment supermarkets all know each other’s prices, but consumers don’t.
If such a website changed that information assymmetry, couldn’t consumers use that information to shop where it’s cheapest and thus save money?
Rudd says that he’ll order the ACCC to inquire into grocery prices because he thinks Coles and Woolworths oligopoly might be gouging consumers with high prices of groceries.
Costello and Downer and their acolytes at Catallaxy denounce this as an economically illiterate stunt.
Which it is - but a very cunning one.
But a few weeks ago the Government ordered the ACCC to inquire into petrol prices because it thinks the petrol retailing oligopoly might be gouging consumers with high prices of petrol.
Who are the two largest petrol retailers in Australia? Coles and Woolworths.
Hmmm … Is this a case of my cunning stunt good?, your cunning stunt bad?
What Robert and others said - how the hell can publishing prices, and therefore better informing the consumer, be called “regulation”?
Harry is right, by the way, Aldi is by far the cheapest place to get shopping, and while they don’t have the ninety billion different brands sold at Coles I find this is a good thing since you get the shopping done a lot faster when you don’t have to expend time and psychic energy on deciding between eleven sorts of milk. It is adequite, as Lindsay Lohan would say.
It’s the essential contradiction at the heart of anyone who fetishes free trade and competition. Unfettered competition leads to increasing concentration of capital and monopoly which in turn spells the end of free trade.
It reminds me of a Gillies sketch, circa mid-80s. A new right figure makes a speech proposing slavery fro small business:
It’s the essential contradiction at the heart of anyone who fetishes free trade and competition. Unfettered competition leads to increasing concentration of capital and monopoly which in turn spells the end of free trade.
Marx was making the same prediction a century ago, Robert, and free trade still exists. There is no contradiction.
That’s a laugh, TimT. Had a look at the WTO rules lately? International trade could hardly be more regulated.
And I pointed out the difference between what Rudd is proposing and what Costello says the ABS does in the post.
I would be happy for KRudd to bring in just some … ‘Truth in Adverstising’ I’ve heard it called.
You shouldn’t have to compare the price of beans for 117 gms to the price of beans for 100 gms. Sometimes they deliberately try to confound the consumer to make it harder to compare prices. I know this is probably more the fault of product makersrather than supemarket chains, but it’s kinda related.
Phil
According to the latest report Woolworths made Earnings Before Interest and Tax (EBIT) of 3.81%. This is hardly spectacular.
The last years’ dividends for Woolworths were 64 cents. The last closing price was about $28.00.
For shareholders, that represents about 2.5% return on capital.
If Woolworths is ripping off its customers, then shareholders aren’t seeing the loot.
It would appear that one reason for the duopoly is that Woolworths and Coles have screwed margins down to a point where competitors can’t compete across the range of services provided by Woolworths and Coles.
“If Woolworths is ripping off its customers, then shareholders aren’t seeing the loot.”
The Woolworths share price has gone up 20% in the last 6 months alone.
Isn’t what Rudd is proposing basically pricing transparency that is already in place in some other countries like the US?
So? That has nothing directly to do with profit. The money the sellers are making from their sale of a Woolworths share doesn’t come out of the till at Woolies. It comes from the bigger mug who comes along to buy the share.
In any case, even if you price the share at $20.00, the return on investors’ capital is only 3.4%, if that investor bought the share at $20.00. (Folks who bought the share at $5.00, however, are making a very tidy 13.6% return on their capital.)
That’s the magic of capitalism for you.
Meanwhile, Howard weaves electoral magic in Tassie.
http://www.abc.net.au/news/stories/2007/07/12/1976563.htm
I’m confused.
Is the ‘duopoly’ accused of charging too much for groceries, and screwing over the consumers? Or of charging too little for groceries and screwing over the competition?
Yes, but you can bet your Woolworths shares on the fact that this senior moment won’t be splashed all over News Ltd outlets like a similar error from one Kim Beazely was a few months back.
He was mistaken about the increasing concentration of capital, though. Capital has never been so fluid. Not only Marxism but trade unionism, which seeks to monopolise labour to create bargaining power with monopoly capital, is foundering in the face of highly mobile capital.
I was referring to TimT on Marx in my earlier post.
Costello’s contribution last night was real let-them-eat-cake stuff. In the past couple of weeks, the government has taken its focus away from marginal seat campaigning and Rudd has been playing catch-up on Aboriginal and defence issues. With this supermarket thing, Rudd is firmly back on top on nobody is talking about the F-22 v F-35 v Sukhoi thing.
Hasn’t hurt the shareprice today - Woolworths up 1.5%….. the market seems relaxed with potential change.
The return to the shareholder is the capital gain on the share price and the dividend. You’ve got to look at the two in combination. Some companies don’t pay any dividends. Microsoft didn’t until recently, and its shareholders still did extremely well, not just those that got in at the beginning.
EBIT margins for supermarket companies look thin but this is misleading because the volumes of sales are so large.
The Woolworths share price is going up because it’s a profitable, well managed company, which is expected by investors to make even bigger profits.
Phew, who would have thought this proposal could produce so much angst?
It’s well known that Coles and Woolworths use their market dominance in unconsionable ways already - they have been fined in the past for their anti-competitive prices. Trouble is, by the time they pay their desultory fine, they have acheived their aim of crippling their competitor so it just becomes a ‘cost of doing business’ and well worth the longer term return.
Neither of them really deserves our business but where I live there is no alternative. So, we are left with their rotting overpriced fruit n veg and endure their inadequate number of cashiers because we have no choice.
And don’t get me started on their apples.
In the UK, the supermarkets incorporated a shelf tag that gave you the comparative price e.g. the price per 100g or 100mL; this was 16 years ago. Such is the hollowness of the ‘competition’ here in Oz that this simple innovation is still beyond our grand duopoly.
I find it interesting too that the business commentators often trumpet Woolies superior logisitics manangement (I’m thinking of Robert Gottslieben in particular) and how this leads to cheaper groceries for the consumer and yet when Choice magazine does their comparison of prices, Coles is invariably cheaper. Go figure.
So, will Rudds proposal change anything? Nah but I agree with Helen and Robert et al; how can greater transparency be a bad thing? Also, I love to see the likes of Downer and Costello with their ersatz knowledge of shopping.
True.
The dividend comes out of the Woolies till. This is related to how much the consumers pay for their Wheaties.
The capital growth comes out of the next mug’s pocket. This has absolutely nothing to do with, how much the consumers have paid for their Wheaties. (However, to be absolutely accurate, it may have something to do with how much the next mug punter on Woolies shares reckons consumers will pay for their Wheaties in future.)
Absoultely. Any of the US ‘free trade’ agreements is similarly enlightening.
The term ‘free trade’ is often obfuscatory. Almost everyone argues for a rules-based trading framework. The real questions are about what the rules should be, who sets them and who enforces them.
We are supposed to understand that regulation of Intellectual Property is a Good Thing while regulation of production processes is a Bad Thing.
(There is a parallel with IR ‘deregulation’ which, as noted here previously, involves thousand of pages of regulation…)
Yes, including those RWDBs who’ll then swim round the fishbowl and argue blue in face that “international law duzzent exist”.
F’n eejits.
Katz, I like Wheaties, now when I have my Wheaties, I won’t enjoy ‘em as much. Next time, could you use Ratsack instead please.
I don’t know if its due to regulation or just something the supermarkets decide to do, but I’ve noticed in the US that many of them do have standardised per/unit prices as well as the total price on the shelves. And it does make it very easy to compare prices. Probably better for people to actually practice their arithmetic regularly though
Seriously though is there really a problem with people not knowing which supermarket is cheaper? Is it that hard for people to just change where they shop occassionally to see what prices in nearby stores are like? Just how lazy are we getting? Perhaps they could introduce a service where you just lodge your shopping list with the government and they go around to the cheapest store and purchase it for you.
Interesting slant on this story from Crikey
It was all a plot to make Alan Jones look at Kevin Rudd favourably.
*Cough* milk comes in 600 ml cartons actually … unless someone’s started one of those ‘Get a bonus 100 ml free’ things.
Kim,
I really enjoyed your Libertarian polemic, but I noticed you failed to address any of my points.
I’m completely in favour of consumers being made more aware of prices, information asymetry is a significant inefficiency in the market, I just don’t see how it is the state’s responsibility to tell you haow much your weetbix and milk cost. If you think that is sensible, maybe you’d like to have a bunch of bureaucrats running around checking the prices on everything for you. Is there anything that the state can’t do for you?
As far as consumers being aware, don’t supermarkets trip over themselves trying to stuff advertising material with price comparisons down your letter box. Alternatively, a nice community based website with voluntarily entered prices of people’s weekly shop that would also put pressure on your local shop to reduce prices would suit the purpose you seek. Someone said that Australia was frightened by innovation, but when you look to a slow moving state for all your consumer innovation, what do you expect?
Shorter Brendan: It accords perfectly with symmetrical information and the ideals of the free market… but ughhh, the State’s doing it!
Brendan Halfweeg wrote:
but the original blog post said:
Do you ever read the articles or just naturally tee off whenever you see something vaguely not associated with the liberal party on the basis that it must be evil? Nobody is advocating price setting of milk and weetbix as you suggested.
Actually, I can’t see the point of all this discussion of grocery prices. Once “Whole Foods” markets set up shop in Australia, you’ll never want to grocery-shop anyplace else again anyway, so the whole thing will be moot. No, seriously, they’re fantastic (and I’m not even a stockholder!). Wait a little bit, you’ll see.
David,
I never said that the state would set the prices, just tell you the prices. Can you read posts as well?
I’m not pro-Liberal either. Howard is probably sitting in Kirribili wondering why he didn’t think up this bit of fluff himself and he’ll probably have a team of bureaucrats working to make sure it becomes a reality before the election, just to take the puff out of Rudd’s sails. It is still a bad idea.
Dave,
So, if someone is already doing it, why does the state need to step in?
Because it can do it more effectively across a wider range of locations, Brendan. So, to clarify, you’re all for attempts to remedy assymetry of information, but completely opposed if those attempts are made by the state. Why?
Perhaps because it would involve spending BRENDAN’S MONEY THAT IS RIPPED OFF HIM THROUGH THE TAX SYSTEM, when it should be provided by TEH PRIVATE SECTOR. If consumers really wanted this sort of information they would be willing to pay for it and the service would run at a profit.
If consumers weren’t willing to pay for accurate price information then suppliers of goods and services might leap into the breach and provide the information to these hypothetical information brokers and even pay to get it published.
Actually, as an information broker, operating in a properly profitable free market way, you might be able to charge both parties for your services - a modest fee for the consumer, but a sliding scale of fees to your information providers, depending on how often they want information about their products and services published, how prominently and so on.
So I guess that’s the objection - the whole thing could, hypothetically at least, be organised on a for-profit basis, sparing the taxpayers a lot of expense.
For an alternative summary of the libertarian view, Gummo, go here:
http://catallaxyfiles.com/?p=3004#comment-43464
Where’s this “University of Adrian You Moron” then?
Not one of the approved ones where you are taught that oligopoly doesn’t exist, that Mugabe and Chavez are the same as Kevin Rudd, and that taxeating, thievery and fractional reserve banking are the root of all evil. Or something.
I do agree they’ve got very nice stuff in their stores but isn’t the alternative name for Whole Foods, “Whole Paycheck”?
I’m just a bit skeptical that they’ll get information that is useful to most people. As I mentioned before, how do you take into account quality of fresh produce? Are they going to monitor all the different brands of each type of item. One supermarket may be much cheaper for one no-brand good, but really expensive for a specific branded version of the same good, and perhaps average for a different branded version of the same good.
If you want to gather enough information that its actually useful then there are going to be lots of really busy people. If not, then they can be quite misleading as your basket of goods is quite different to those being monitored.
Gummo, although I am concerned about my own tax situation, I am more interested in the idea that
a) services that can be provided privately or voluntarily should be
b) the state is often less efficient and less responsive to consumer demands
c) such a service would be subject to the whims of politicians
Kim
WTF? I don’t think you understand what “theology” means.
Actually neither monopolies nor duopolies, ipso facto, are antithetical to competition
Robert Merckel
OUCH! You sure slammed into that one, didn’t you? Remember, Adam Smith is one of Labor’s patron saints according to Kevin Rudd.
From “Howard’s Brutopia” The Monthly November, 2006.
Robert Bollard
You are confusing “concentration” with “centralisation.” Increasing “concentration” of capital is the cause of the ‘tendency for the average rate of profit to fall.’ Increasing “centralisation” of capital can flow from this, but it also has independent dynamics that lead to monopolies and so on.
I hope this helps.
Coles & Woollies aren’t just ripping off consumers by increasing margins, deleting product lines and providing poor in-store services, they also screw suppliers all the way back to farmers.
And the Govt has this helpful advice from it’s Report by the Agriculture and Food Policy Reference Group to the Minister for Agriculture, Fisheries and Forestry FEBRUARY 2006
http://www.agfoodgroup.gov.au/publications/creating_our_future/creating_our_future_part_b.pdf
In other words - another farmer providing the same product at a lower price, is going to help existing famers/suppliers dealing with Coles & Woolies? …..WTF?
The reality is of course VERY DIFFERENT:
http://www.theage.com.au/articles/2004/05/15/1084570998472.html
Against this background:
I wonder if Rudd is also dog whistling to small food producers, manufacturers and suppliers with an intention to take on Coles/Woolies?
We can only hope.
(a) is pure ideology, (b) is irrelevant in this instance as the proposal is about providing consumers with information (plus a supermarket oligopoly is in a pretty good position to remain profitable while remaining inefficient and unresponsive to consumer demands). Point [c] might have a bit of merit - politicians are notoriously dishonest and corrupt, unlike the decent, upright businessmen who merely bribe them.
Other comments have pointed out that the duopoly do screw over their suppliers, & that breeches of the Trades Practices Act are not vigorously pursued.
Having endured employment at Woolworths while studying, I can assure you that they do actively collude with their competitor as regards pricing weekly specials.
They actively employ a five tiered pricing structure, where each supermarket is ranked according to its surrounding socio-economic demographic - prices & the type of stock for sale is entirely determined by this ranking. (Don’t shop at Woollies Neutral Bay).
The fluctuations in fresh produce prices is entirely artificial. Strategically placed storage facilities such as Somersby which supplies much of Sydney, can cold-store produce for up to 12 months at a time. Woolworths will also buy entire crops from farmers direct, months before harvesting. Not via produce markets.
& aren’t both Coles & Woollies under investigation for holding fuel prices artificially high at their petrol stations?
Off to your local growers market the lot of you. & if you don’t have one - well start one.
Substitute “metaphysics” should you wish.
So Gummo,
You don’t think that voluntary behavious is superior to coerced behaviour? If not, you are a bigger fool than your moniker suggests.
For the purposes of illustration, I could suggest that a government programme might involve hundreds of bureaucrats running around checking prices, each of them requiring a salary and benefits. A voluntary scheme could be as simple as people typing in their grocery receipts into an online form, with minimal administration and the added bonus of the data coming from “real shoppers” not drones sent to check the prices of a centrally determined “common basket of goods”.
If you think voluntary or privately supplied information sources are less reliable, you have no excuse for using Wikipedia or reading Amazon.com’s recommendations or picking up a Yellow Pages. Remember that Yellow Pages is a for profit information source!
Alternatively, if you really suggest that shops should be forced to submit prices to a central body, then you will be adding to their administrative responsibilities, marginally increasing their fixed costs. Particularly as you’ve already noticed, that Coles do not set the prices centrally, each store prices their goods according to their own markets. So instead of a clerk dedicated to opening a till at peak times, you’ll have a clerk dedicated to making sure the shop has submitted their prices on time.
Either way, there is a real cost involved, the cost of the bureaucrat or the cost of the coordinator within each store. Is this really more efficient to a voluntary system in which the only costs are the costs of maintaining the server which could be covered by donation or advertising?
There is some hope for you though, at least you don’t trust politicians to administer any programme without politizing it.
Good points Brendan about how such a price comparison scheme could work quickly and easily through shoppers downloading data into a central database.
But why do you assume a Government auspiced and supervised initiative along such lines would involve hundreds of bureaucrats? These days, SES level civil servants get bonuses for cutting costs and staff, not adding them.
I see no reason why, whether it’s the public or private sector, that an annual budget of around $300,000, mainly going towards some people that know how use web 2.0 tools, shouldn’t be able to create a comprehensive grocery prices wiki. (plus another half mill or so up front to promote its existence and invite contributions, a sunk cost that both the private and public sectors would happily entertain, especially if it gets the relevant CEO or Minister a nice photo and several column inches in general and trade media.)
The question then is who takes overall responsibilty for the credibilty of the data it offers.
Interesting here that you cite Wikipedia and Amazon. Are you aware of the regular bitchfights and accusations over shaping and stacking information and reviews on those sites? And if you disagree with their data, who do you hold responsible and how?
Or to put it another way, would you trust the Australian Food and Grocery Council, the Australian Consumers Association or a bunch of pissed off shoppers from a particular locality to run a trulely impartial price comparison wiki?
At least with Governments, you can sack the bastards every few years. And they know it, especially when it comes to what are literally bread and butter issues here.