Speaker 1: From Schwartz Media, Am Ruby Jones. This is seven.
Speaker 2: AM when the Atriple c announced it would be suing
Speaker 2: Coals and Woolworths of a fake discounts on more than
Speaker 2: five hundred products.
Speaker 1: It did so on the back of tip offs from
Speaker 1: citizen sluths who had been documenting curious price changes on
Speaker 1: everyday products like chocolates and tampons. The Consumer Watchdog is
Speaker 1: alleging the big two supermarkets knowingly misled customers and sold
Speaker 1: tens of millions of dollars worth of products that way.
Speaker 1: With more market share than almost any other grocery chains
Speaker 1: in the world, and with the cost of food skyrocketing,
Speaker 1: Coals and Woolworth's are now faced with a choice on
Speaker 1: weather and how to defend themselves today. Economics editor of
Speaker 1: The Conversation and contributor to the Saturday Paper, Peter Martin
Speaker 1: on the reckoning ahead for Coals and Woorworths. It's Wednesday,
Speaker 1: October second. Peter, Let's begin by talking about how this
Speaker 1: legal case was built. Where did the ah troble seize
Speaker 1: investigations begin.
Speaker 3: Initially, it got phone calls. Now it gets a lot
Speaker 3: of phone calls, and it has a lot of discretion
Speaker 3: about what to investigate. In fact, most of the things
Speaker 3: it gets it never investigates. In this instance, there were
Speaker 3: so many that it looked further, and when it looked further,
Speaker 3: it discovered social media hundreds of posts from I don't
Speaker 3: know if you call them citizen data analysts or citizen
Speaker 3: data journalists.
Speaker 4: Colsm woo Worth pricing is fascinating, and I've got a
Speaker 4: really great example.
Speaker 3: One was from a guy called price check Guy. Now,
Speaker 3: one post on TikTok about Hadbury 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 price.
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 1: Okay, so the A Triple C has been trolling the data.
Speaker 1: So what has it said that it's uncovered about just
Speaker 1: how many times these kinds of promotions were happening.
Speaker 3: It's only presented five hundred odd cases. It could have
Speaker 3: presented more, but it said that it's wanted to only
Speaker 3: look at cases where prices had been steady for at
Speaker 3: least six months before the action. What happened in the
Speaker 3: action was an increase of a few weeks and then
Speaker 3: prices being discounted to a price that was no lower
Speaker 3: than the price had been for months before. And the
Speaker 3: products of the kind we all use aren't It's Timtams
Speaker 3: Kellogg Cereal stay free pads. Those are some of the
Speaker 3: ones for Warlworths Energizer, batteries for coals, liber tampons, Ness Cafe,
Speaker 3: instant coffee. If the A Triple C can establish that
Speaker 3: people took them at their word, that's a key part
Speaker 3: of the Atrible C case, it says, and it needs
Speaker 3: to establish this that people were led to believe that
Speaker 3: Coals and Woolworths were looking at after them by delivering
Speaker 3: lower prices. In other words, that people didn't think it
Speaker 3: was a trick. It has a strong case to argue
Speaker 3: that it's misleading and deceptive.
Speaker 1: As this court case is launched, how would you describe
Speaker 1: 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, Colson Woolworths
Speaker 3: got together. They ensured we got toilet paper, all of
Speaker 3: the things we needed. Woolworths, they were a me year ago,
Speaker 3: in September, the most trusted brand in Australia according to
Speaker 3: Roy Morgan. Now that same company, Woolworths is Australia's fifth
Speaker 3: least trusted brand. I think they probably always behaved badly
Speaker 3: where they could. That's a guess. Don't hold me to that.
Speaker 3: We'll see what comes out in court. But when prices
Speaker 3: shot up up in twenty twenty two, we saw, according
Speaker 3: to the ABS, in two and a half years, a
Speaker 3: 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 triple'll see report says Woolworths widened its
Speaker 3: margins in that time of high inflation. We started paying attention.
Speaker 3: We saw the pain every time we went shopping. We
Speaker 3: were horrified at what we.
Speaker 1: Saw robust competition.
Speaker 3: I mean, seems the former head of the A Triple
Speaker 3: C says that we had one of the most concentrated supermarkets,
Speaker 3: lying it's not true. And then we saw the walkout
Speaker 3: from a four Corners interview from the chief executive of
Speaker 3: Allworths earlier this year.
Speaker 4: His words are the wide by the way, I don't
Speaker 4: think you would impugne his integrity and his understanding of
Speaker 4: competition law.
Speaker 2: I'm just certain the world has got much more competitive.
Speaker 1: He retired eighteen months ago. He's not okay, Well, can
Speaker 1: we take 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.
Speaker 5: I've answered the question.
Speaker 6: You have not answered the question, mister Banderci. Honestly, I'm
Speaker 6: not interested in your spin or you bullshit. This is
Speaker 6: a Senate Inquiry answer the question was your return on
Speaker 6: equity twenty six percent in the last financial year, which
Speaker 6: 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.
Speaker 1: This coming up after the break, Will Coles and Willworth's
Speaker 1: fight back. Peter Coles and Willworth's are being sued by
Speaker 1: the HBLEC over allegedly mislead in customers with these illusory
Speaker 1: discounts on everyday items. What have the supermarket said about
Speaker 1: how they plan 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 Wolworth'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 1: 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 1: Okay, there's probably a lot of conversations happening behind the
Speaker 1: scenes then about how both companies should handle this.
Speaker 3: I would say, so.
Speaker 1: 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 or fifty million.
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 Worworths 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: cas Gottlib, the chair of the A Triple C, has
Speaker 3: said she wants this to set an example, so they
Speaker 3: don't want nothing. In fact, they probably will not be
Speaker 3: satisfied with a genuine promise to fix the behavior. They want.
Speaker 3: Want this to set an example in the same way
Speaker 3: as the Quantus case did.
Speaker 1: So the ATA will see they're seeking significant penalties. But Peter,
Speaker 1: 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 atrible C to investigate their pricing practices.
Speaker 3: On an ongoing basis.
Speaker 5: So what we're announcing today is all about more resources
Speaker 5: for more investigation and more enforcement and more sites for competition.
Speaker 5: And he that's what.
Speaker 3: Talked about negotiating with state governments and through them local
Speaker 3: councils to sort of unpick planning logjams.
Speaker 5: In addition to this crackdown, I'll also work closely with
Speaker 5: states and territories to progress a reform of planning and
Speaker 5: zoning regulations as fast as possible so that we can
Speaker 5: boost competition in the supermarket sector by opening up more
Speaker 5: sites for news 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 1: And just finally, so we've heard Jim Thomas say that
Speaker 1: cracking down on zuper markets that's about relieving cost of
Speaker 1: living pressure. So do you think that what has been announced,
Speaker 1: so this h POC funding boost and more land potentially
Speaker 1: becoming available for new super markets, do you think these
Speaker 1: measures are going to do that to make the cost
Speaker 1: 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 oouncing 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 listen.
Speaker 3: This a bit 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 1: Peter, thank you so much for your.
Speaker 3: Tan A great pleasure.
Speaker 1: Also in the news today, Israel's military has launched ground
Speaker 1: rates in the border area of southern Lebanon. The IDF
Speaker 1: says are against hes boler targets and infrastructure. The raids
Speaker 1: follow two weeks of intensive air strikes by Israel on
Speaker 1: targets in Lebanon, and the ABC's managing director has apologized
Speaker 1: to staff who experienced racist trey after a review found
Speaker 1: overwhelming evidence of racism at the public broadcaster. The listen
Speaker 1: Loudly Acts Strongly reviewed, detailed anonymized examples of racism and
Speaker 1: discrimination from current and former staff, and made fifteen recommendations
Speaker 1: to improve the workplace. I'm Ruby Jones. This is seven am.
Speaker 1: Thanks for listening.