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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