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RICHARD GOYDER & COLES DEFENSE ON THE STAND THAT FARMERS HAVE ON SUPERMARKETS

COLES SUPERMARKETS ARE NOT THE PROBLEM THAT FARMERS THINK

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Wesfarmers boss Richard Goyder has mounted a spirited defense of the Perth-based conglomerate’s supermarket business Coles at the company’s annual general meeting saying it was too simplistic to blame all of the ills of the nation’s farming and food sectors on the way the chain interacted with suppliers.

He pointed to other disruptions in the Australian economy which were costing productivity and growth including streams of red tape and the strong Australian dollar.

Mr Goyder told shareholders gathered for the meeting this afternoon that he was ‘‘a bit perplexed’’ when Coles was continually attacked for the challenges facing communities.

‘‘I get a bit perplexed when Coles is blamed for many of the challenges in the farming-food sector today,’’ he said.

‘‘The farming and food industries do have challenges today, as they have had for many years.

‘‘They are not helped by our strong currency, as well as productivity issues, and cumbersome regulations.

‘‘But, it is just too easy, too simplistic to blame the supermarkets for a lot of these difficulties.’’

Coles and its arch rival Woolworths have come under continued assault from some politicians, suppliers, consumer groups and competition authorities over their perceived market power and treatment of food suppliers.

The ACCC has led much of the charge, promising investigations into Coles and Woolworths’ treatment of suppliers as well as their use of shopper docket schemes that give sizeable discounts to supermarket owned petrol stations.

Mr Goyder said Coles staff, customers and investors had benefited greatly from when Wesfarmers bought the struggling business in 2007 and resuscitated it to become much better operator.

‘‘While we have a strong market presence,’’ Mr Goyder said at the AGM today, ‘‘although our market share is less than most commentators express, we know what happens if you don’t look after your customers, you get Coles of 2007.’’

He said suggestions Coles and Woolworths market shares should be capped at 20 per cent like in the US would be ‘‘a sure fire recipe for higher prices for Australian consumers’’.

Mr Goyder said the ACCC had debunked the benefits of a 20 per cent market share cap at a Senate select committee in 2012.

He said Coles under Wesfarmers’ ownership had increased competition in the Australian grocery sector.

‘‘Indeed, previous ACCC reports have estimated that grocery prices would be 17 per cent higher in towns where a major supermarket such as Coles does not operate.’

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November 7th, 2013
Topic: SUPERMARKETS Tags: ,

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