Toastmasters Speech #9 – The not so friendly giants

I hate Coles. I hate that I can’t get what I want to eat from there anymore. In the last year they have taken my favourite products from childhood off the shelf.  Like delicious Rosella tomato soup that we’d take in a thermos to the snow on family trips when I was 5. And did you know you can’t even buy Cottee’s chocolate topping anymore. How are you supposed to make a milkshake? Has anyone else noticed that you can’t get what you used to? You can’t even find half the vegetables you want anymore.  I mean compared to what you in supermarkets overseas we have nothing!

I was having a whinge about this to my flatmate and how I hate the new Coles in Manly even more than the old new Coles and we had our first fight because of it. He told me he was sick of me whinging about it and maybe I should get a car so I could drive somewhere different to do my shopping.

But Woollies is no better and I think I’m justified in my whinging. We are losing choice and getting sucked in to using the Coles and Woollies brands instead of our favourites and one day we won’t be able to buy anything but theirs.

I’ve done some homework and while this topic is so big I could go on all night, I’ll try to give you a summary  of why I can’t find my favourite products and what we should do about it.

Firstly –here are some facts.

  • We have more supermarkets per capita than America and 3 times that per capita of Britain.
  • Together Coles and Woollies own about 6500 stores in Australia and growing. That gives them 70% of      Australian market share. In the UK the 2 biggest supermarkets only have about 48% and it’s about 20% in the US.
  • Coles & Woollies not only own supermarkets but also alcohol stores, petrol stations, and other retail like Kmart and Officeworks.
  • Woolworths is Australia’s largest owner of poker machines (13,480 machines) and the largest seller of tobacco and alcohol causing obvious social problems.
  • About 23 cents in every household dollar goes back to them.

This is huge power. In fact it’s the most severe concentration of power in the world. And it’s getting worse. So much for keeping prices down.  Our grocery bills are up 41% since 2000.

So what is actually happening?

Well it’s all a massive scam and we are all contributing to them getting bigger and bigger.

Firstly – we are buying their home brands.  I do it myself even though I know I shouldn’t.  They are affordable and for example I can’t taste the difference between Coles white rice and Sunrice brand so I’d rather save a couple of bucks.  But they are so sneaky – sometimes you buy their products accidentally because they’ve made them look like a brand you used to know.

These supermarket owned brands already have a 25% market share and it is expected to rise to 30% in the near future.   This means we are going to have even less variety and gives them even more power.

And having their own products also gives them power over the supply chain not just us the consumers.  And this is the second big problem.  They dictate to the farmers and suppliers.  In the past they used to buy from wholesale markets but now they go straight to the growers and negotiate a season of produce – choosing the size, shape, weight, colour and setting the price.

Driving hard bargains is forcing many growers and manufacturers out of the industry. The industry has changed so much that now about 90 per cent of their fresh produce now comes direct from a about 7 or 8 massive producers geographically spread over Australia. These types of massive farms are called Aggregators and with their size comes economies of scale so they are very efficient and it’s hard for small family farms to compete unless they barely make a profit.

With their own brands and the control over the growers comes control over the seeds that are getting planted. And this is where it gets really scary. They are patenting seeds.  And they are making growers plant seedless fruit and veg so eventually we won’t be able to even get seeds anymore without using theirs. This makes our food supply vulnerable to climate shocks and environmental damage and puts the population at risk in the long term.

But you can see how incredibly smart the supermarkets are. If I was a shareholder I would be really happy with them for making a profit by such clever methods. They are doing it under our noses and most people are completely blind to it. The supermarkets are technically not doing anything against the law and somehow ACCC investigations have stated that consumers are actually benefitting but it’s pretty clear to me that there’s something not right and it is putting our future in jeopardy some way or the other – if only for lack of choice at dinner time.

So what can you do to slow down their growth and decrease their power?

  • Make  the effort to spend your money elsewhere.  The only way we can break this monopoly is to buy direct from farmers and through farmers markets
  • Avoid the home brands – it’s going to cost us more in the long run anyway, once competition is reduced and prices increase again… Try to choose local, independent Australian owned brands, over generic supermarket house brands and pay that little bit more.
  • If  you must buy a home brand, read the label and look for ‘Product of      Australia’ and ‘Made in Australia” over imported.

Shopping this way is important for the long term health of our nation. We need to  reduce the ability that this duopoly has to control what we are eating – both from a variety of what we put on the dinner table but also because what’s happening with the seeds.

So finally I’d like to read a quote by a chef Stefano de Pieri who I think sums it up nicely.

”We have to stop this race for the cheapest and nastiest and basically corporatised agriculture. It leaves us culturally poor. “It means we will end up with three types of grapes, two types of oranges, one type of cheese. That’s the thing that worries me; when you sacrifice prices you sacrifice all of that richness, which is cultural, which is community, which is tradition, which is gastronomy.”