Speaker 1: I'm Daniel James and you're listening to seven AM. Back
Speaker 1: in twenty twenty four, the Age People See announced it
Speaker 1: would take Colds and Woolworths to court over what it
Speaker 1: says where fake discounts for more than five hundred everyday products.
Speaker 1: If illow tip offs from citizens lose. We've been documenting
Speaker 1: curious price changes on everyday products like chocolates and pasta.
Speaker 1: Now that case is in federal court, with the watchdog
Speaker 1: arguing Coals misled customers with its down down promotions, increasing
Speaker 1: prices just before discounting them again. Coals denies and did
Speaker 1: anything wrong, putting the price jumps down to rising costs.
Speaker 1: A separate case against wil War's over its price dropped
Speaker 1: promotions is expected to follow later today, we're bringing you
Speaker 1: an episode from twenty twenty four where Ruby Jones speaks
Speaker 1: with economist and journalist Peter Martin about the reckoning facing
Speaker 1: Australia's two biggest supermarkets. Is Sunday, February twenty two. This
Speaker 1: episode was first published in October twenty twenty four.
Speaker 2: Peter, let's begin by talking about how this legal case
Speaker 2: was built. Where did the a troble seize investigations.
Speaker 3: Begin Initially it got phone calls. Now it gets a
Speaker 3: lot of phone calls, and it has a lot of
Speaker 3: discretion about what to investigate. In fact, most of the
Speaker 3: things it gets it never investigates. In this instance, there
Speaker 3: were so many that it looked further, and when it
Speaker 3: looked further, it discovered social media. Hundreds of posts from
Speaker 3: I don't know if you call them citizen data analysts
Speaker 3: or citizen data journalists.
Speaker 4: Colsm Wolworth. Pricing is fascinating, and I've got a really
Speaker 4: great example.
Speaker 3: One was from a guy called prist check guy. Now,
Speaker 3: one post on TikTok about Cadbury Caramelo koalas has been
Speaker 3: viewed three hundred and seventy three thousand times.
Speaker 4: Okay, I'm actually a little bit upset by this product,
Speaker 4: and I tell you why. Here was a product that
Speaker 4: was consistently one dollar discounted to eighty cents, one dollar
Speaker 4: discounted to eighty cents, and in one day it just
Speaker 4: jumped up to two dollars. So now it's two dollars
Speaker 4: discounted to one dollar, and calls is calling that a
Speaker 4: half priced.
Speaker 3: That's what the a triple C saw. But then it
Speaker 3: was able to as it has the power to do
Speaker 3: seek data from the parties in this case Coles and Morwitz.
Speaker 3: Now it can only do that legally, normally if it's
Speaker 3: preparing a legal action. So they knew something was coming
Speaker 3: because the A Triple C has been going through the
Speaker 3: data on their computers for some time.
Speaker 2: Okay, so the A Triple C has been trolling the data.
Speaker 2: So what has it said that it's uncovered about just
Speaker 2: how many times these kinds of promotions were happening.
Speaker 3: It's presented five hundred odd cases. It could have presented more,
Speaker 3: but it said that it's wanted to only look at
Speaker 3: cases where prices had been steady for at least six
Speaker 3: months before the action. What happened in the action was
Speaker 3: an increase of a few weeks and then prices being
Speaker 3: discounted to a price that was no lower than the
Speaker 3: price had been for months before. And the products of
Speaker 3: the kind we all use aren't It's Timtams Kellogg Cereal
Speaker 3: stay free pads. Those are some of the ones for
Speaker 3: Warlworths Energizer, batteries, for coals, liber tampons, Ness Cafe, instant coffee.
Speaker 3: If the A Triple C can establish that people took
Speaker 3: them at their word. That's a key part of the
Speaker 3: a trible c case, it says, and it needs to
Speaker 3: establish this that people were led to believe that Coals
Speaker 3: and Woolworths were looking after them by delivering lower prices.
Speaker 3: In other words, that people didn't think it was a trick.
Speaker 3: It has a strong case to argue that it's misleading
Speaker 3: and deceptive.
Speaker 2: As this court case is launched, how would you describe
Speaker 2: the way the public feels about the big two supermarket chains.
Speaker 3: I think the public hates the big two supermarket chains,
Speaker 3: but it wasn't always like this. It's an appalling come
Speaker 3: down in terms of public image. During COVID, Coles and
Speaker 3: Woolworth's got together, they ensured we got toilet paper, all
Speaker 3: of the things we needed. Warlworths, they were a me
Speaker 3: year ago, in September, the most trusted brand in Australia
Speaker 3: according to Roy Morgan. Now that same company, Woolworths, is
Speaker 3: Australia's fifth least trusted brand. I think they probably always
Speaker 3: behaved badly where they could. That's a guess. Don't hold
Speaker 3: me to that. We'll see what comes out in court.
Speaker 3: But when prices shot up in twenty twenty two, we saw,
Speaker 3: according to the ABS, in two and a half, here's
Speaker 3: a sixteen percent jump in prices. Previously that increased only slowly.
Speaker 3: You know, a lot of that was just passing on costs.
Speaker 3: But the a trip we'll see report says Woolworths widened
Speaker 3: its margins in that time of high inflation. We started
Speaker 3: paying attention. We saw the pain every time we went shopping.
Speaker 3: We were horrified at what.
Speaker 5: We saw robust competition.
Speaker 1: I mean sums, the former head of the A Triple
Speaker 1: C says that we had one of the most concentrated supermarkets,
Speaker 1: lying it's not true.
Speaker 3: And then we saw the walk out from a four
Speaker 3: Corners interview from the chief executive of Allworth's earlier this year.
Speaker 1: His words are the wide by the way, I don't
Speaker 1: think you would impugne his integrity and his understanding of
Speaker 1: competition law. I'm just saying the world has got much
Speaker 1: more competitive. He retired eighteen months ago.
Speaker 6: He's not okay, Well, can we teck that out?
Speaker 3: Is that we saw the same chief executive, as a
Speaker 3: result of that, being threatened with imprisonment when he refused
Speaker 3: to give a clear answer to a Senate inquiry. I've
Speaker 3: answered the Questionna.
Speaker 7: You have not answered the question, mister Vanderci. Honestly, I'm
Speaker 7: not interested in your spin or you bullshit. This is
Speaker 7: a Senate inquiry answer. The question was your return on
Speaker 7: equity twenty six percent in the last financial year, which
Speaker 7: is more than two and a half time.
Speaker 3: It's been really one, I suppose image blunder after another,
Speaker 3: although none of them are as serious I think in
Speaker 3: the mind of the public as this.
Speaker 2: Coming up after the break, Will Coles and Willworth's fight back.
Speaker 2: Peter Coles and Willworth's are being sued by the HBLEC
Speaker 2: over allegedly misleading customers with these illusory discounts on everyday items.
Speaker 2: Have the supermarket said about how they planned to respond.
Speaker 3: Coles says it will respond and that's all. It issued
Speaker 3: a statement to the Stock Exchange almost immediately after the
Speaker 3: able C statement, which tends to indicate it thought it
Speaker 3: was coming, and Woolworth's merely said it would continue to
Speaker 3: engage with the Commission, which also indicates that it's been
Speaker 3: engaging about this reluctantly letting the Commission inside its computers
Speaker 3: for some time.
Speaker 2: Do they have any chance of beating it?
Speaker 3: It's an awful case to win. In fact, winning might
Speaker 3: be even worse. What do you mean You wouldn't need
Speaker 3: to let people inside your pricing practices. Everything would come
Speaker 3: out in court. We saw this with Quantus. Quantus sold
Speaker 3: those ghost flights, flights that had already canceled, and when
Speaker 3: it made its submission to the Federal Court, using the
Speaker 3: same provision of the Australian Consumer Law, it said people
Speaker 3: did not buy tickets when they bought them for a flight,
Speaker 3: they bought quote, a bundle of rights that enabled them
Speaker 3: for various things. Now this made Quantus a laughing stock.
Speaker 3: Does Coles want that? What Quantus did was to settle
Speaker 3: out of court for a total of one hundred and
Speaker 3: twenty million dollars And I think it regarded that as
Speaker 3: fairly good value for money. And it's interesting that Walworth's
Speaker 3: has not said it will fight it in court.
Speaker 2: Okay, there's probably a lot of conversations happening behind the
Speaker 2: scenes then about how both companies should handle this. I
Speaker 2: would say, so, tell me about the possible penalties.
Speaker 3: Labor increased the penalties shortly after it was elected. The
Speaker 3: penalty was ten million dollars for an instance of misleading
Speaker 3: and deceptive conduct. That's increased to fifty million. I don't
Speaker 3: think anyone thinks that they'll add five hundred cases together
Speaker 3: and multiply them by either ten or fifty million, that
Speaker 3: that would be an extraordinary amount of money. There is
Speaker 3: a provision in the law actually which says if it's
Speaker 3: too complicated to calculate, there can be an award of
Speaker 3: thirty percent of a measure of turnover, which would be enormous.
Speaker 3: That's probably not going to happen. The Commissioners certainly said
Speaker 3: it wants those firms Coson Woorworths to donate money to
Speaker 3: charities that provide food to people in need. I think
Speaker 3: what it wants is a big number. In interviews, Gina
Speaker 3: cass Gottlib, the chair of the arible C, has said
Speaker 3: she wants this to set an example, so they don't
Speaker 3: want nothing. In fact, there probably will not be satisfied
Speaker 3: with a genuine promise to fix the behavior. They want
Speaker 3: this to set an example in the same way as
Speaker 3: the Quantus case did.
Speaker 2: So the ACHA will see they're seeking significant penalties. But Peter,
Speaker 2: what else is the government doing beyond that?
Speaker 3: Well, just this week on Tuesday, the Treasurer ramped up
Speaker 3: the pressure on supermarkets. Further, he announced an extra thirty
Speaker 3: million dollars to the atriple C to investigate their pricing
Speaker 3: practices on an ongoing basis.
Speaker 6: So what we're announcing today is all about more resources
Speaker 6: for more investigation and more enforcement and more sites for competition.
Speaker 3: And he that's what talked about negotiating with state governments
Speaker 3: and through them local councils to sort of unpick planning logjams.
Speaker 6: In addition to this crackdown, I'll also work closely with
Speaker 6: states and territories to progress a reform of planning and
Speaker 6: zoning regulations as fast as possible so that we can
Speaker 6: boost competition in the super market sector by opening up
Speaker 6: more sites for new stores.
Speaker 3: The biggest thing, according to the draft report of the
Speaker 3: atrible C Inquiry, that stops people going to a competitive
Speaker 3: supermarket apart from inertia, is that there isn't one, and
Speaker 3: that's because regulations make it hard to start a new
Speaker 3: one and in some instances, and the Commission named two
Speaker 3: a suspicion of land banking. That is to say that
Speaker 3: Coles and Wolworth's buy a spot, they might say that
Speaker 3: one day they're going to have a supermarket on it,
Speaker 3: but The key effect in the meantime is that no
Speaker 3: one else can. And there's even something bigger that certainly
Speaker 3: the Greens and the Coalition as it happens once, and
Speaker 3: that's that the a trible C applying to the Federal
Speaker 3: Court gets the right to force supermarkets to divest, maybe
Speaker 3: sell ten percent of their stores, maybe sell stores in
Speaker 3: some states, maybe find an entire arm of the business
Speaker 3: and hive it off. The Coalition supports that, labor does not.
Speaker 3: It happens in the US and it's happened in the UK.
Speaker 3: What's so different about Australia. Why should Australia be less?
Speaker 3: I suppose free market in the sense of promoting competition
Speaker 3: by breaking companies up than the US or the UK.
Speaker 2: And just finally, so we've heard Jim Thomas say that
Speaker 2: cracking down on zuper markets that's about relieving cost of
Speaker 2: living pressure. So do you think that what has been
Speaker 2: announced so this HC funding boost and more land potentially
Speaker 2: becoming available for new super markets, do you think these
Speaker 2: measures are going to do that to make the cost
Speaker 2: of living more affordable for people.
Speaker 3: I do think they'll have an effect if they're surrounded
Speaker 3: by pressure from all sides. And you know, frankly, the
Speaker 3: government's announcing a new thing every few days and there'll
Speaker 3: be the major inquiry reporting in February. If they're surrounded
Speaker 3: by pressure on all sides, they have the ability to
Speaker 3: listen this bid. Like quantits. You Quantus charges high fares,
Speaker 3: but it can cut them when there's competition or when
Speaker 3: it's under scrutiny.
Speaker 2: Peter, thank you so much for your time, A great pleasure.
Speaker 1: I'm Daniel James seven am. Will be back tomorrow with
Speaker 1: an episode on Elon Musk's plan to launch a million
Speaker 1: satellites into orbit to power AI. What will that do
Speaker 1: to the night sky and what happens if the satellites collide.
Speaker 5: Near where I live in Saskatchewan, Canada, a SpaceX Crew
Speaker 5: Dragon trunk, big pieces of it, landed on to farmland.
Speaker 5: Farmers found these giant pieces guide in contact with an
Speaker 5: astronomer and then had to figure out how do you
Speaker 5: deal with pieces of foreign countries spacecraft on your farm?
Speaker 1: Right, Thanks for listening. We'll be back tomorrow