The retail duopoly that rules the nation

Coles and Woolworths are the duopoly who control what we buy. Peter Strong, CEO of the Council of Small Business Australia (COSBOA) explores their role in Australian retail and what needs to be done to create a level playing field. 

One thing about owning a bookshop is that it gives me a background of classic literature. The ones that I like to promote are the George Orwell novels 1984 and Animal Farm and a whole array of dystopian works based on the take over of society by big business, big government and big unions.

Another thing is that 1984, the year, may have passed but 1984, the metaphor, has come to life and it is allowed to do so by the Animal Farm ethics displayed by many in positions of power.

There is a new hegemony that has taken control of what we see, what we eat and drink, what music we hear, what colours are before our eyes and what we buy. The hegemony consists of the duopoly, the big retail landlords and the associated big union.

Let me name some of them – Coles and Woolworths are the duopoly who control what we buy; Westfields, Stocklands, Centro and the Queensland Investment Corporation are the core of the landlords who through informal alliances with the duopoly have developed monopolies on retail space in communities and towns across the nation;  the SDA, the Shop Distributive and Allied Employees’ Association, is the union that supports these others in their activities as their membership is to be found, in the main, in the duopoly.

There are also many, many big businesses who do not practice the scorched earth policy of the hegemony. This includes the banks.  Many people would argue that the banks also destroy small businesses, and that can be true, yet the banks are attempting to correct some of their past practices and develop better understanding of small business people and better ways to communicate.  I will not include any company into the hegemony if they are honestly attempting to work with the small business community.

The Hegemony are changing our culture mainly through controlling retail, retail space and the supply chain to retail. They control town centres and ensure that the only businesses that can survive are those inside their mall. They control planning processes to the point where local government will have their decisions over ruled in a planning court if they do not accede to what the umbrella hegemony desire. The umbrella group has the funds, the industrial might, the market power and the barristers needed to outlast governments in any court of law.

They have the money of poker machine income to finance their court cases. They have the profits they make from tobacco products to fund the changing of our culture. They dominate through their supermarkets but also through their liquor outlets, First Choice and Dan Murphy’s, and also through their hardware market domination through Wesfarmers/Coles owned Bunnings and Woolworths will soon add their own hardware chain to the market place.

We need to divest the duopoly and change contract law to ensure that the big landlords are not able to destroy people and due process through bullying and misuse of their power. Failing that we need a royal commission into how this was allowed to happen and what can be done to stop the destruction of our culture.

We do not need dystopian novels to know what the future might hold without due process and due diligence on competition and corporate behaviour.

I and those of us in COSBOA will continue to fight for the rights of the self employed and the consumer.  The right to have fair access to the market place, the right to the same security and fairness in contracts, the right to pursue due process in law without being overwhelmed by the might of the few who will win the legal battles through attrition and use of bullying tactics, not through being right.

Peter Strong is the CEO of the Council of Small Business Australia (COSBOA). He has spent much of the last 30 years in change management at the business, community and national level. He has worked for the Australian Government and with NGOs, as well as consultancies with the World Bank and the United Nations. Peter has worked on national small business and employment policy and internationally on projects aimed at assisting countries and regions experiencing substantial economic and social change.  Peter was instrumental in setting up business incubators and small business support services in various countries and throughout Australia.  This includes the first women’s business incubator in China. Peter participates in various advisory groups to the Australian government including with the Australian Tax Office, the ACCC, ASIC, Treasury and the Department of Innovation.