1 00:00:00,080 --> 00:00:04,200 Speaker 1: The Commerce Commission reckons, we need fewer items on sale 2 00:00:04,519 --> 00:00:08,479 Speaker 1: at the supermarket. Yes, that means less yoga on special 3 00:00:08,520 --> 00:00:11,639 Speaker 1: for four ninety nine or year one dollar ninety nine 4 00:00:11,720 --> 00:00:15,920 Speaker 1: chocolate bar at the checkout. Basically, they want less price 5 00:00:16,120 --> 00:00:20,400 Speaker 1: yo yoeing. In general, this is counterintuitive. The job of 6 00:00:20,440 --> 00:00:23,200 Speaker 1: the Commerce Commission, through the Grocery Commissioner, is meant to 7 00:00:23,239 --> 00:00:27,320 Speaker 1: score us cheaper prices and boost competition. Right, So what 8 00:00:27,760 --> 00:00:31,680 Speaker 1: the lord's good name is going on here? This morning 9 00:00:31,720 --> 00:00:34,440 Speaker 1: they've announced they want to change the rules around what 10 00:00:34,520 --> 00:00:39,199 Speaker 1: the supermarkets can charge the suppliers, so your food stuff's 11 00:00:39,240 --> 00:00:42,520 Speaker 1: in your woolworst. They purchase about fifteen billion dollars worth 12 00:00:42,520 --> 00:00:45,680 Speaker 1: of goods from suppliers every year, and when they do this, 13 00:00:46,440 --> 00:00:50,520 Speaker 1: the suppliers will discount prices buy about five billion dollars 14 00:00:50,560 --> 00:00:55,840 Speaker 1: a year through rebates, discounts and promotional payments. This ensures 15 00:00:55,840 --> 00:00:58,640 Speaker 1: that their stock is on sale so that we buy 16 00:00:58,680 --> 00:01:03,000 Speaker 1: it because everyone loves a bargain. The supermarket Zar says, 17 00:01:03,160 --> 00:01:06,560 Speaker 1: if you're a new, smaller supermarket chain opening up, you 18 00:01:06,600 --> 00:01:08,840 Speaker 1: can't compete with that because you don't have the buying 19 00:01:08,880 --> 00:01:11,320 Speaker 1: power in the economies of scale, So your prices would 20 00:01:11,319 --> 00:01:13,800 Speaker 1: be higher, you wouldn't be able to compete. Now, this 21 00:01:13,840 --> 00:01:16,640 Speaker 1: is where I think the Czar takes one of many 22 00:01:16,720 --> 00:01:20,320 Speaker 1: leaps of faith. They reckon that we consumers are overall 23 00:01:20,640 --> 00:01:25,399 Speaker 1: worse off because of these specials and discounts. They say, 24 00:01:25,480 --> 00:01:29,759 Speaker 1: consumers lose out because prices jump around more. This can 25 00:01:29,840 --> 00:01:32,480 Speaker 1: mean the average price is more expensive and it's harder 26 00:01:32,480 --> 00:01:35,559 Speaker 1: for consumers to assess the value of products. Well, can't 27 00:01:35,600 --> 00:01:39,120 Speaker 1: we read the label? They don't offer any evidence this 28 00:01:39,240 --> 00:01:42,560 Speaker 1: is actually happening, nor do they offer any evidence that 29 00:01:42,640 --> 00:01:45,839 Speaker 1: a change would make things cheaper. Leap of faith number 30 00:01:45,840 --> 00:01:48,160 Speaker 1: two is that this saving will be passed on to 31 00:01:48,240 --> 00:01:51,960 Speaker 1: the consumer via the supermarket. Is there not a flaw 32 00:01:52,040 --> 00:01:57,880 Speaker 1: in this logic? Does essentially banning discounts really make prices cheaper? 33 00:01:58,520 --> 00:02:03,000 Speaker 1: If so, by how much much? Five billion dollars? Remember 34 00:02:03,000 --> 00:02:05,880 Speaker 1: the industry's revenue is twenty five billion dollars a year. 35 00:02:06,120 --> 00:02:08,560 Speaker 1: If all of the discounts were handed down their chain 36 00:02:08,600 --> 00:02:11,960 Speaker 1: of command to US shoppers, we're expected to believe general 37 00:02:12,000 --> 00:02:16,480 Speaker 1: prices would fall by what twenty percent? Remember when they 38 00:02:16,520 --> 00:02:19,520 Speaker 1: set up the Grocery Commission under Labor, we were told 39 00:02:19,600 --> 00:02:22,480 Speaker 1: the supermarkets were making excess profits of three hundred and 40 00:02:22,480 --> 00:02:25,720 Speaker 1: sixty five million dollars a year. So we're well, well 41 00:02:25,760 --> 00:02:28,480 Speaker 1: and above that now, aren't we. There's a bunch of 42 00:02:28,480 --> 00:02:31,200 Speaker 1: other changes they've announced as well. Some of the stuff 43 00:02:31,240 --> 00:02:35,480 Speaker 1: is just proposed, its suggestions, it's voluntary. Some stuff needs 44 00:02:35,520 --> 00:02:39,160 Speaker 1: consultation and then reviews and twelve months and blah blah 45 00:02:39,160 --> 00:02:43,160 Speaker 1: blah more reports. By the time this is finished, I 46 00:02:43,240 --> 00:02:46,239 Speaker 1: will not only have lost the will to shop, but 47 00:02:46,280 --> 00:02:50,480 Speaker 1: potentially lost the will to live. For more from early 48 00:02:50,600 --> 00:02:53,639 Speaker 1: edition with Ryan Bridge. Listen live to News Talk set 49 00:02:53,720 --> 00:02:57,680 Speaker 1: Be from five am weekdays, or follow the podcast on iHeartRadio.