On my Soapbox

One of the news items this week has been an announcement from the Prime Minister, saying that there will be an inquiry into grocery prices in Australia.
There is a duopoly in the Australian grocery market and from what I can tell (I don't follow these things closely) Woolworths is becoming so powerful and Coles doing so badly that we're very close to a monopoly.
What this means, of course, is that Woolworths basically controls the market. They control the prices given to our farmers for their produce and they also control the prices paid by the consumer. The general trend is to pay less and less to the producers and ask more and more of the buyer. The profit margins on some products has grown hundreds of percent in relatively few years and everyone but the supermarket is suffering for it.

Another issue which is strengthening the stranglehold on the market is the increasing number and variety of "house brands". Once upon a time the supermarkets would produce a discount range of products, the "No Frills" line. The consumer could choose the discount brand or they could choose a more upmarket product produced by another company. These days the supermarkets have a discount brand, a mid-range brand and an upmarket product all of their own and all priced just a teensy bit under the competitor.They are squeezing the suppliers through being powerful buyers. They are squeezing the consumer by eliminating competition from other retailers and they are cornering the market by making sure that once we enter the shop we are more likely to choose their brand as well.

I have considered a boycott of the big supermarkets or at least the biggest but truth be told, the smaller suppliers just can't compete on varierty and usually can't compete on price. To shop independently would also require more travel. It would be incredibly difficult to boycott the big two and that is the whole problem.

As I thought about this situation one of the reports I heard talked about an inquiry into the price of an "average basket of groceries". I wondered what an "average basket" is?
A basket for a family? for a couple? for elderly people? young and busy?

I thought about my spending habits: I don't generally buy fruit & veg at the supermarket or meat, fish and poultry. I prefer independent specialist suppliers (You know, the old fashioned butcher and green grocer.) but I'll bet that these products are included in an average basket. I also buy bread from the local bakery and bread would have to be part of an average basket.

Eventually it dawned on me that my shopping habits are part way towards a solution. If we purchase as much as we can from other retailers and choose independent brands when we do enter a big supermarket, if we all do this all of the time we could create a shift in the market. We could shake the stronghold enough to drop profits and then maybe the big companies would have a little more respect for the market. The independent manufacturers and the independent retailers would have more power in the market and the monopoly/duopoly would be broken. Good news for us all.