Australia has fastest-rising food prices of any major developed nationBy John Rolfe
From: The Daily Telegraph
November 09, 2009 12:01AM
http://www.news.com.au/money/money-matters/australia-has-fastest-rising-food-prices-of-any-major-developed-nation/story-e6frfmd9-1225795572738
Costs Rising
John Rolfe of the Daily Telegraph has reported that “Australia has the fastest rising food prices of any major developed nation”. His claim of rising grocery costs to the tune of 40 per cent are quite alarming given that most Australians are already struggling with the escalating costs of mortgages and fuel. Rolfe notes Australia’s unique and volatile position in comparison to other countries. Australia’s rate of increase is “a quarter quicker than prices have risen in Britain, twice as fast as in France and nearly three times the speed of Germany”
Reasons Why?
Rolfe attributes this trend not to the fodder of usual suspects including drought, the GFC, rising transport costs, recent natural disasters or government influence, instead he squarely points the finger of blame at the unique supermarket duopoly that exists in Australia. University of NSW professor Frank Zumbo’s confirms the main reason is the “cosy” duopoly of Woolworths and Wesfarmers (owners of Coles).
The question that is raised is how a duopoly can continue to exist in an environment where the government is selling out on everything for the sake of the almighty dollar. Privatisation has been an important tool of government in Australia for the past two decades. We need only to look at the sale of prisons, airports, Telstra, water, gas and electricity services to see that nothing is immune.
Australia however has one of the most concentrated grocery markets in the world. The ABS suggests Woolworths and Wesfarmers account for almost 80% of supermarket sales, over 50% of alcohol retail, 44% of petrol retail and 25% of all retail in Australia.
Government Influence
With the governments’ recent shut down of consumer watch dog Choice’s attempt at a Grocery Choice website one wonders what the dollar value is for the government to so blatantly support the duopoly.
The question is how we can as consumers combat this issue. Woolworths and Coles give more shelf space to their own brand items. Name brand products are disappearing off the shelves – with only the top selling items remaining. This means less variety, or choice, and the loss of familiar brands from the aisles. For supermarkets, it creates a shift in bargaining power further down the supply chain; Australian farmers and wholesalers have little choice but to sell through the supermarkets’ own brands and are forced to compete with cheaper, often heavily subsidised, foreign imports.
What can we do?
• Shop at independent grocers and small supermarkets.
• Choose local, independent Australian owned brands, over generic supermarket house brands.
• If you’re buying a home brand, read the label and look for “Product of Australia’ and ‘Made in Australia’’ over imported.
Reasons Why?
Rolfe attributes this trend not to the fodder of usual suspects including drought, the GFC, rising transport costs, recent natural disasters or government influence, instead he squarely points the finger of blame at the unique supermarket duopoly that exists in Australia. University of NSW professor Frank Zumbo’s confirms the main reason is the “cosy” duopoly of Woolworths and Wesfarmers (owners of Coles).
The question that is raised is how a duopoly can continue to exist in an environment where the government is selling out on everything for the sake of the almighty dollar. Privatisation has been an important tool of government in Australia for the past two decades. We need only to look at the sale of prisons, airports, Telstra, water, gas and electricity services to see that nothing is immune.
Australia however has one of the most concentrated grocery markets in the world. The ABS suggests Woolworths and Wesfarmers account for almost 80% of supermarket sales, over 50% of alcohol retail, 44% of petrol retail and 25% of all retail in Australia.
Government Influence
With the governments’ recent shut down of consumer watch dog Choice’s attempt at a Grocery Choice website one wonders what the dollar value is for the government to so blatantly support the duopoly.
The question is how we can as consumers combat this issue. Woolworths and Coles give more shelf space to their own brand items. Name brand products are disappearing off the shelves – with only the top selling items remaining. This means less variety, or choice, and the loss of familiar brands from the aisles. For supermarkets, it creates a shift in bargaining power further down the supply chain; Australian farmers and wholesalers have little choice but to sell through the supermarkets’ own brands and are forced to compete with cheaper, often heavily subsidised, foreign imports.
What can we do?
• Shop at independent grocers and small supermarkets.
• Choose local, independent Australian owned brands, over generic supermarket house brands.
• If you’re buying a home brand, read the label and look for “Product of Australia’ and ‘Made in Australia’’ over imported.
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