Dick Smith defends Coles and Woolworths over market dominance in Australia
Australian business entrepreneur Dick Smith, director of the Dick Smith Foods brand, has said that people should stop blaming Coles and Woolworths for their size and market dominance.
In a submission to the Senate Select Committee Inquiry into Australia’s Food Processing Sector, Mr Smith said Coles and Woolworths’ market dominance is a result of Australian politics and the economic system – not greed.
Dick Smith’s food company was formed in 1999 to provide Australian owned and produced alternatives to products from foreign-owned food companies.
In the company submission, Mr Smith said, “It’s just a result of all of us desiring ever increasing growth in profits and returns on our investments,” Mr Smith said. “The situation has been caused by us and our political masters who don’t show the leadership that is necessary to tell us the downside of the extreme capitalism that we are now heading towards because of the limits of growth.”
“Unsustainable economic system” causing problems in food industry
According to Mr Smith, current industry problems have little relevance to the size of the two major food retailers but more Australia’s present economic system.
Mr Smith said, “Most people know that there is a limit to growth in a finite world and as we start to get closer to the limits businesses are forced to extremes to keep profits increasing.
“I am disappointed that our politicians are not communicating to Australians that our present economic system is not sustainable. The Boards and CEOs of Coles and Woolworths know they will lose their jobs if they do not keep exponentially increasing profits every year.
“The reason we now have a situation where the Chief Executive of Coles, Ian McLeod, gets AU$16M a year including bonuses (and it’s claimed in the media that it could be as high as AU$30M next year), whilst Australian process workers at Heinz are losing their jobs and farmers are ploughing back their crops, is nothing to do with the “greed” of Coles.
“It is all to do with our economic system, where shareholders will sell their shares if profits don’t increase perpetually, exponentially and endlessly.”
Mr Smith said that the prime reason Coles has refused to stock Dick Smith Foods products is that they are about 30 cents more expensive, and that they believe Australian consumers will not support this extra cost.
The Senate Select Committee is due to report to the Senate by 30 June 2012