Legislative Council
12 August 1998
 
 MONOPOLIES

  The Hon. M.J. ELLIOTT: An article appearing in the business section of yesterday's Advertiser entitled `Retail giants reap $37.4 billion' states:
 Retailing giants Woolworths and Coles continued their assault on smaller retailers during 1997-98, squeezing an extra $2.7 billion in sales from the marketplace. Last week Coles Myer posted record sales of $20.6 billion while Woolworths achieved a hefty $16.8 billion.
 The results revealed sales jumps of 7.1 per cent and 8.1 per cent respectively, but retail sales overall rose by just 3.8 per cent in the year ending with the June quarteróthe difference coming from the smaller players. In food and alcohol alone Woolworths bolstered sales by 8.7 per cent to $14.2 billion while Coles increased its share of the kitty by 10.8 per cent to $11.6 billion. The two operators are gaining market share from the independents in the supermarket industry at the rate of over 1 per cent a year.
I note that the Council of Small Business Organisations made comment and that the Australian Hotels Association noted that hotels, pubs and liquor stores had seen 50 per cent of their sales captured by the major retailers since they entered the liquor market earlier this decade. This question of monopolies can no longer be avoided. In fact, as an issue in Australia, it has been avoided for too long. It is interesting to note a comparison between, say, Australia and the United States. Our two largest retailers, Coles and Woolworths, control 31 per cent of the retail industry. If one looks at the industry in the United States, the top 10 retail groups control only 12 per cent of the retail market. The world's largest retailer, Wal-mart, controls only 2.4 per cent of the US retail market, so one can see a degree of relative market power.
 The Hon. L.H. Davis interjecting:
 The Hon. M.J. ELLIOTT: Just shut up. One can see the relativeó
 The Hon. L.H. Davis interjecting:
 The PRESIDENT: Order! I ask the Hon. Mr Elliott not to listen to interjections and proceed with his contribution.
 The Hon. L.H. Davis interjecting:
 The Hon. M.J. ELLIOTT: Shut up.
 The PRESIDENT: I ask the honourable member not to use that language in the Council.
 The Hon. M.J. ELLIOTT: I am sick of his persistent and inane interjections. Monopolies have the capacity to be clearly anti-competitive and they have all sorts of ways of rorting the system and taking advantages that others do not have available to them.
 The Hon. L.H. Davis interjecting:
 The Hon. M.J. ELLIOTT: Yes, there is a difference between publicly and privately owned monopolies in terms of their potential impact within the marketplace. The Council of Small Business Organisations states that approximately 1 per cent of market share lost to large retailers means the loss of approximately 1 800 jobs. The larger retailers tend to use capital investment in lieu of labour.
 It is worth noting that Woolworths is not happy with what it has so far. It is looking at a major expansion into petrol with its first Adelaide station now open and one in Port Pirie. It is looking at quite significant expansion in the liquor industry and it is also lobbying heavily to be allowed to run pharmacies within its operations. There is no doubt in my mind that the United States, under its legislation, would have moved in long ago and broken up companies that operate at that size because they are anti-competitive. I recall when the US felt that the market power of Bell Telephone had become too great, so it moved in at that pointó
 The Hon. T.G. Roberts interjecting:
 The Hon. M.J. ELLIOTT: óand ITT as wellóand forced breakups to ensure that there was real and genuine competition in the marketplace. I gave an example of how small retailers are about to be hit badly by a GST, but one of the reasons that they are going to be hit so badly is that the wholesale price deals that are available to the Woolworths and Coles of this world are just so dramatically lower than those available to other purchasers in the marketplace. It is cheaper for a small retailer to go into Woolworths or Coles and buy the goods they want to sell than to go direct to the wholesaler. There is a wholesale rorting of the tax system going on by the big retailers.
 The PRESIDENT: Order! The honourable member's time has expired.
 
 

 


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