WEBVTT - Inside the Coles and Woolworths 'fake' discounts case 0:00:01.360 --> 0:00:05.240 From Schwartz Media, Am Ruby Jones. This is seven. 0:00:05.040 --> 0:00:12.800 AM when the Atriple c announced it would be suing 0:00:12.880 --> 0:00:15.840 Coals and Woolworths of a fake discounts on more than 0:00:15.880 --> 0:00:17.079 five hundred products. 0:00:17.360 --> 0:00:19.320 It did so on the back of tip offs from 0:00:19.360 --> 0:00:23.120 citizen sluths who had been documenting curious price changes on 0:00:23.200 --> 0:00:27.920 everyday products like chocolates and tampons. The Consumer Watchdog is 0:00:27.920 --> 0:00:32.560 alleging the big two supermarkets knowingly misled customers and sold 0:00:32.720 --> 0:00:35.480 tens of millions of dollars worth of products that way. 0:00:36.240 --> 0:00:39.400 With more market share than almost any other grocery chains 0:00:39.440 --> 0:00:42.120 in the world, and with the cost of food skyrocketing, 0:00:42.479 --> 0:00:44.920 Coals and Woolworth's are now faced with a choice on 0:00:45.000 --> 0:00:49.920 weather and how to defend themselves today. Economics editor of 0:00:49.960 --> 0:00:53.600 The Conversation and contributor to the Saturday Paper, Peter Martin 0:00:54.160 --> 0:01:03.200 on the reckoning ahead for Coals and Woorworths. It's Wednesday, 0:01:03.320 --> 0:01:19.400 October second. Peter, Let's begin by talking about how this 0:01:19.520 --> 0:01:22.520 legal case was built. Where did the ah troble seize 0:01:22.560 --> 0:01:23.680 investigations begin. 0:01:24.400 --> 0:01:26.560 Initially, it got phone calls. Now it gets a lot 0:01:26.600 --> 0:01:28.880 of phone calls, and it has a lot of discretion 0:01:29.160 --> 0:01:32.600 about what to investigate. In fact, most of the things 0:01:32.600 --> 0:01:36.479 it gets it never investigates. In this instance, there were 0:01:36.520 --> 0:01:39.440 so many that it looked further, and when it looked further, 0:01:40.800 --> 0:01:45.280 it discovered social media hundreds of posts from I don't 0:01:45.280 --> 0:01:48.400 know if you call them citizen data analysts or citizen 0:01:48.840 --> 0:01:50.080 data journalists. 0:01:50.200 --> 0:01:52.760 Colsm woo Worth pricing is fascinating, and I've got a 0:01:52.800 --> 0:01:53.600 really great example. 0:01:53.680 --> 0:01:57.000 One was from a guy called price check Guy. Now, 0:01:57.240 --> 0:02:02.920 one post on TikTok about Hadbury Caramelo koalas has been 0:02:03.040 --> 0:02:06.440 viewed three hundred and seventy three thousand times. 0:02:06.560 --> 0:02:08.920 Okay, I'm actually a little bit upset by this product, 0:02:08.960 --> 0:02:10.760 and I tell you why. Here was a product that 0:02:10.840 --> 0:02:14.320 was consistently one dollar discounted to eighty cents, one dollar 0:02:14.760 --> 0:02:17.679 discounted to eighty cents, and in one day it just 0:02:17.760 --> 0:02:20.920 jumped up to two dollars. So now it's two dollars 0:02:20.960 --> 0:02:24.200 discounted to one dollar, and calls is calling that a 0:02:24.240 --> 0:02:24.800 half price. 0:02:25.000 --> 0:02:29.280 That's what the a triple C saw. But then it 0:02:29.400 --> 0:02:31.920 was able to, as it has the power to do, 0:02:32.560 --> 0:02:36.880 seek data from the parties in this case Coles and Morwitz. 0:02:37.120 --> 0:02:39.840 Now it can only do that legally normally if it's 0:02:39.919 --> 0:02:43.160 preparing a legal action. So they knew something was coming 0:02:43.240 --> 0:02:47.640 because the A Triple C has been going through the 0:02:47.760 --> 0:02:49.600 data on their computers for some time. 0:02:54.240 --> 0:02:56.960 Okay, so the A Triple C has been trolling the data. 0:02:57.160 --> 0:03:00.960 So what has it said that it's uncovered about just 0:03:01.160 --> 0:03:04.120 how many times these kinds of promotions were happening. 0:03:04.880 --> 0:03:08.720 It's only presented five hundred odd cases. It could have 0:03:08.800 --> 0:03:12.000 presented more, but it said that it's wanted to only 0:03:12.000 --> 0:03:15.000 look at cases where prices had been steady for at 0:03:15.080 --> 0:03:19.440 least six months before the action. What happened in the 0:03:19.480 --> 0:03:22.720 action was an increase of a few weeks and then 0:03:22.800 --> 0:03:27.200 prices being discounted to a price that was no lower 0:03:27.480 --> 0:03:30.720 than the price had been for months before. And the 0:03:30.760 --> 0:03:34.400 products of the kind we all use aren't It's Timtams 0:03:34.480 --> 0:03:37.920 Kellogg Cereal stay free pads. Those are some of the 0:03:37.960 --> 0:03:44.160 ones for Warlworths Energizer, batteries for coals, liber tampons, Ness Cafe, 0:03:44.240 --> 0:03:47.440 instant coffee. If the A Triple C can establish that 0:03:47.920 --> 0:03:50.680 people took them at their word, that's a key part 0:03:50.720 --> 0:03:53.680 of the Atrible C case, it says, and it needs 0:03:53.760 --> 0:03:58.240 to establish this that people were led to believe that 0:03:58.360 --> 0:04:01.200 Coals and Woolworths were looking at after them by delivering 0:04:01.240 --> 0:04:03.720 lower prices. In other words, that people didn't think it 0:04:03.800 --> 0:04:06.360 was a trick. It has a strong case to argue 0:04:06.400 --> 0:04:08.240 that it's misleading and deceptive. 0:04:08.920 --> 0:04:12.160 As this court case is launched, how would you describe 0:04:12.360 --> 0:04:16.080 the way the public feels about the big two supermarket chains. 0:04:16.839 --> 0:04:19.840 I think the public hates the big two supermarket chains, 0:04:20.480 --> 0:04:24.599 but it wasn't always like this. It's an appalling come 0:04:24.720 --> 0:04:29.720 down in terms of public image. During COVID, Colson Woolworths 0:04:29.760 --> 0:04:32.719 got together. They ensured we got toilet paper, all of 0:04:32.760 --> 0:04:36.240 the things we needed. Woolworths, they were a me year ago, 0:04:36.400 --> 0:04:40.320 in September, the most trusted brand in Australia according to 0:04:40.400 --> 0:04:45.200 Roy Morgan. Now that same company, Woolworths is Australia's fifth 0:04:45.600 --> 0:04:51.679 least trusted brand. I think they probably always behaved badly 0:04:52.040 --> 0:04:55.360 where they could. That's a guess. Don't hold me to that. 0:04:55.760 --> 0:04:59.320 We'll see what comes out in court. But when prices 0:04:59.560 --> 0:05:03.080 shot up up in twenty twenty two, we saw, according 0:05:03.160 --> 0:05:06.200 to the ABS, in two and a half years, a 0:05:06.240 --> 0:05:11.160 sixteen percent jump in prices. Previously that increased only slowly. 0:05:12.080 --> 0:05:14.240 You know, a lot of that was just passing on costs. 0:05:14.320 --> 0:05:17.920 But the A triple'll see report says Woolworths widened its 0:05:18.000 --> 0:05:22.239 margins in that time of high inflation. We started paying attention. 0:05:22.760 --> 0:05:25.680 We saw the pain every time we went shopping. We 0:05:25.680 --> 0:05:27.000 were horrified at what we. 0:05:26.920 --> 0:05:28.320 Saw robust competition. 0:05:28.320 --> 0:05:30.480 I mean, seems the former head of the A Triple 0:05:30.560 --> 0:05:35.359 C says that we had one of the most concentrated supermarkets, 0:05:35.600 --> 0:05:39.359 lying it's not true. And then we saw the walkout 0:05:39.440 --> 0:05:43.400 from a four Corners interview from the chief executive of 0:05:43.480 --> 0:05:45.200 Allworths earlier this year. 0:05:45.400 --> 0:05:49.800 His words are the wide by the way, I don't 0:05:49.839 --> 0:05:52.599 think you would impugne his integrity and his understanding of 0:05:52.640 --> 0:05:53.480 competition law. 0:05:53.720 --> 0:05:55.960 I'm just certain the world has got much more competitive. 0:05:56.360 --> 0:06:00.480 He retired eighteen months ago. He's not okay, Well, can 0:06:00.520 --> 0:06:01.120 we take that out? 0:06:01.200 --> 0:06:04.560 Is that we saw the same chief executive as a 0:06:04.600 --> 0:06:10.719 result of that, being threatened with imprisonment when he refused 0:06:10.720 --> 0:06:13.479 to give a clear answer to a Senate inquiry. 0:06:13.640 --> 0:06:14.640 I've answered the question. 0:06:15.200 --> 0:06:19.880 You have not answered the question, mister Banderci. Honestly, I'm 0:06:19.960 --> 0:06:23.520 not interested in your spin or you bullshit. This is 0:06:23.560 --> 0:06:28.240 a Senate Inquiry answer the question was your return on 0:06:28.279 --> 0:06:31.280 equity twenty six percent in the last financial year, which 0:06:31.320 --> 0:06:32.600 is more than two and a half time. 0:06:32.720 --> 0:06:36.760 It's been really one, I suppose, image blunder after another, 0:06:37.320 --> 0:06:39.919 although none of them are as serious I think in 0:06:39.960 --> 0:06:41.800 the mind of the public as. 0:06:41.600 --> 0:06:46.800 This coming up after the break, Will Coles and Willworth's 0:06:46.800 --> 0:06:57.800 fight back. Peter Coles and Willworth's are being sued by 0:06:57.839 --> 0:07:02.240 the HBLEC over allegedly mislead in customers with these illusory 0:07:02.360 --> 0:07:07.080 discounts on everyday items. What have the supermarket said about 0:07:07.120 --> 0:07:08.680 how they plan to respond? 0:07:09.400 --> 0:07:12.680 Coles says it will respond and that's all. It issued 0:07:12.720 --> 0:07:16.400 a statement to the Stock Exchange almost immediately after the 0:07:16.720 --> 0:07:19.880 able C statement, which tends to indicate it thought it 0:07:19.960 --> 0:07:23.640 was coming. And Wolworth's merely said it would continue to 0:07:23.760 --> 0:07:27.280 engage with the Commission, which also indicates that it's been 0:07:27.360 --> 0:07:31.960 engaging about this reluctantly letting the Commission inside its computers 0:07:31.960 --> 0:07:32.680 for some time. 0:07:33.440 --> 0:07:36.680 Do they have any chance of beating it? 0:07:36.680 --> 0:07:39.640 It's an awful case to win. In fact, winning might 0:07:39.720 --> 0:07:42.400 be even worse. What do you mean you wouldn't need 0:07:42.440 --> 0:07:47.360 to let people inside your pricing practices? Everything would come 0:07:47.400 --> 0:07:51.440 out in court. We saw this with Quantus. Quantus sold 0:07:51.440 --> 0:07:55.560 those ghost flights, flights that had already canceled, and when 0:07:55.600 --> 0:07:58.080 it made its submission to the Federal Court, using the 0:07:58.120 --> 0:08:03.160 same provision of the Australian Consumer Law, it said people 0:08:03.240 --> 0:08:06.960 did not buy tickets when they bought them for a flight, 0:08:07.480 --> 0:08:11.160 they bought quote, a bundle of rights that enabled them 0:08:11.200 --> 0:08:15.600 for various things. Now this made Quantus a laughing stock. 0:08:16.480 --> 0:08:21.000 Does Coles want that? What Quantus did was to settle 0:08:21.000 --> 0:08:23.840 out of court for a total of one hundred and 0:08:23.920 --> 0:08:27.160 twenty million dollars And I think it regarded that as 0:08:27.200 --> 0:08:30.640 fairly good value for money. And it's interesting that Walworth's 0:08:30.760 --> 0:08:33.079 has not said it will fight it in court. 0:08:34.120 --> 0:08:36.720 Okay, there's probably a lot of conversations happening behind the 0:08:36.760 --> 0:08:40.319 scenes then about how both companies should handle this. 0:08:40.640 --> 0:08:41.360 I would say, so. 0:08:42.160 --> 0:08:44.000 Tell me about the possible penalties. 0:08:44.960 --> 0:08:49.240 Labor increased the penalties shortly after it was elected. The 0:08:49.280 --> 0:08:53.920 penalty was ten million dollars for an instance of misleading 0:08:53.920 --> 0:08:57.760 and deceptive conduct. That's increased to fifty million. I don't 0:08:57.760 --> 0:09:01.280 think anyone thinks that they'll add five hundred cases together 0:09:01.679 --> 0:09:04.880 and multiply them by either ten or or fifty million. 0:09:04.920 --> 0:09:08.920 That would be an extraordinary amount of money. There is 0:09:08.960 --> 0:09:11.480 a provision in the law actually which says if it's 0:09:11.520 --> 0:09:16.000 too complicated to calculate, there can be an award of 0:09:16.320 --> 0:09:22.160 thirty percent of a measure of turnover, which would be enormous. 0:09:23.240 --> 0:09:28.520 That's probably not going to happen. The Commissioners certainly said 0:09:28.760 --> 0:09:34.800 it wants those firms Coson Worworths to donate money to 0:09:35.160 --> 0:09:39.360 charities that provide food to people in need. I think 0:09:39.400 --> 0:09:43.120 what it wants is a big number. In interviews, Gina 0:09:43.240 --> 0:09:47.440 cas Gottlib, the chair of the A Triple C, has 0:09:47.679 --> 0:09:50.760 said she wants this to set an example, so they 0:09:50.760 --> 0:09:54.960 don't want nothing. In fact, they probably will not be 0:09:55.040 --> 0:10:00.000 satisfied with a genuine promise to fix the behavior. They want. 0:10:00.000 --> 0:10:02.440 Want this to set an example in the same way 0:10:02.440 --> 0:10:03.640 as the Quantus case did. 0:10:05.480 --> 0:10:10.240 So the ATA will see they're seeking significant penalties. But Peter, 0:10:10.360 --> 0:10:12.800 what else is the government doing beyond that? 0:10:13.559 --> 0:10:17.480 Well, just this week on Tuesday, the Treasurer ramped up 0:10:17.720 --> 0:10:21.880 the pressure on supermarkets further. He announced an extra thirty 0:10:21.960 --> 0:10:26.400 million dollars to the atrible C to investigate their pricing practices. 0:10:26.640 --> 0:10:28.120 On an ongoing basis. 0:10:28.400 --> 0:10:32.959 So what we're announcing today is all about more resources 0:10:33.440 --> 0:10:39.120 for more investigation and more enforcement and more sites for competition. 0:10:39.360 --> 0:10:40.560 And he that's what. 0:10:40.920 --> 0:10:45.440 Talked about negotiating with state governments and through them local 0:10:45.520 --> 0:10:50.439 councils to sort of unpick planning logjams. 0:10:50.800 --> 0:10:54.400 In addition to this crackdown, I'll also work closely with 0:10:54.480 --> 0:10:59.880 states and territories to progress a reform of planning and 0:11:00.040 --> 0:11:03.360 zoning regulations as fast as possible so that we can 0:11:03.360 --> 0:11:08.040 boost competition in the supermarket sector by opening up more 0:11:08.120 --> 0:11:09.480 sites for news stores. 0:11:09.679 --> 0:11:12.720 The biggest thing, according to the draft report of the 0:11:13.280 --> 0:11:17.000 atrible C Inquiry, that stops people going to a competitive 0:11:17.040 --> 0:11:21.200 supermarket apart from inertia, is that there isn't one, and 0:11:21.520 --> 0:11:25.200 that's because regulations make it hard to start a new 0:11:25.240 --> 0:11:29.920 one and in some instances, and the Commission named two 0:11:30.880 --> 0:11:33.679 a suspicion of land banking. That is to say that 0:11:34.000 --> 0:11:37.880 Coles and Wolworth's buy a spot, they might say that 0:11:37.920 --> 0:11:40.080 one day they're going to have a supermarket on it, 0:11:40.360 --> 0:11:42.200 but the key effect in the meantime is that no 0:11:42.240 --> 0:11:46.480 one else can. And there's even something bigger that certainly 0:11:46.840 --> 0:11:51.439 the Greens and the Coalition as it happens once and 0:11:51.559 --> 0:11:55.120 that's that the a trible c applying to the Federal 0:11:55.160 --> 0:12:00.720 Court gets the right to force supermarkets to divest, maybe 0:12:00.760 --> 0:12:03.560 sell ten percent of their stores, maybe sell stores in 0:12:03.640 --> 0:12:07.440 some states, maybe find an entire arm of the business 0:12:07.520 --> 0:12:12.640 and hive it off. The Coalition supports that, labor does not. 0:12:13.240 --> 0:12:16.160 It happens in the US and it's happened in the UK. 0:12:16.920 --> 0:12:21.720 What's so different about Australia. Why should Australia be less? 0:12:22.080 --> 0:12:25.920 I suppose free market in the sense of promoting competition 0:12:26.040 --> 0:12:28.760 by breaking companies up than the US or the UK. 0:12:30.040 --> 0:12:32.440 And just finally, so we've heard Jim Thomas say that 0:12:32.679 --> 0:12:35.600 cracking down on zuper markets that's about relieving cost of 0:12:35.600 --> 0:12:38.479 living pressure. So do you think that what has been announced, 0:12:38.559 --> 0:12:42.480 so this h POC funding boost and more land potentially 0:12:42.480 --> 0:12:45.280 becoming available for new super markets, do you think these 0:12:45.280 --> 0:12:49.640 measures are going to do that to make the cost 0:12:49.640 --> 0:12:51.400 of living more affordable for people. 0:12:51.880 --> 0:12:55.880 I do think they'll have an effect if they're surrounded 0:12:55.880 --> 0:12:59.360 by pressure from all sides. And you know, frankly, the 0:12:59.400 --> 0:13:03.320 government's oouncing a new thing every few days and there'll 0:13:03.360 --> 0:13:07.800 be the major inquiry reporting in February. If they're surrounded 0:13:07.800 --> 0:13:11.079 by pressure on all sides, they have the ability to listen. 0:13:11.080 --> 0:13:14.560 This a bit like quantits. You Quantus charges high fares, 0:13:15.200 --> 0:13:18.319 but it can cut them when there's competition or when 0:13:18.320 --> 0:13:20.160 it's under scrutiny. 0:13:21.000 --> 0:13:22.600 Peter, thank you so much for your. 0:13:22.520 --> 0:13:24.400 Tan A great pleasure. 0:13:37.200 --> 0:13:40.840 Also in the news today, Israel's military has launched ground 0:13:40.920 --> 0:13:44.200 rates in the border area of southern Lebanon. The IDF 0:13:44.320 --> 0:13:48.600 says are against hes boler targets and infrastructure. The raids 0:13:48.640 --> 0:13:51.680 follow two weeks of intensive air strikes by Israel on 0:13:51.760 --> 0:13:57.880 targets in Lebanon, and the ABC's managing director has apologized 0:13:57.880 --> 0:14:01.800 to staff who experienced racist trey after a review found 0:14:01.840 --> 0:14:05.920 overwhelming evidence of racism at the public broadcaster. The listen 0:14:06.000 --> 0:14:10.480 Loudly Acts Strongly reviewed, detailed anonymized examples of racism and 0:14:10.520 --> 0:14:15.160 discrimination from current and former staff, and made fifteen recommendations 0:14:15.200 --> 0:14:19.160 to improve the workplace. I'm Ruby Jones. This is seven am. 0:14:19.200 --> 0:14:19.960 Thanks for listening.