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Craig Emerson defends Grocery Choice scrappin -

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Craig Emerson defends Grocery Choice scrapping

Broadcast: 29/06/2009

Reporter: Ali Moore

Consumer Affairs Minister Craig Emerson joins the program to discuss the Government's decision to
scrap the Grocery Choice website.

Transcript

ALI MOORE, PRESENTER: Coles and its rival Woolworths have been accused of scuppering the grocery
price monitoring website 'Grocery Choice' with their refusal to provide price information, the
reason given by the Government for pulling the pin on the project. Grocery Choice was five days
away from being relaunched by the consumer group 'Choice', which took over the website last
December and was developing it with Federal Government funding. But on Friday, Consumer Affairs
Minister Craig Emerson said he'd come to the conclusion the project was not feasible and withdrew
federal support. Choice is understood to be considering whether it will go ahead with its own
version anyway, while the retailers are looking at the possibility of setting up an industry-run
site. But questions are still being asked about the pressure on the Government to dump the project.

I spoke with Consumer Affairs Minister Craig Emerson from Brisbane earlier this evening.

Craig Emerson, welcome to Lateline Business.

CRAIG EMERSON, CONSUMER AFFAIRS MINISTER: Thanks, Ali.

ALI MOORE: You've justified the decision to scrap Grocery Choice because in your words, "getting
the information required was just not feasible". If it wasn't feasible, why allocate some $13
million to the project and spend millions of that before pulling the pin?

CRAIG EMERSON: To ascertain whether it was feasible. The initial approach, as you might recall, was
to have the ACCC put up a website. That didn't give store-by-store price information. and then the
Government engaged Choice to see whether we could provide accurate, timely information for
customers on a store-by-store basis. And when I was appointed to this position, I had a look at the
information. I did have meetings with Choice. I had meetings with the supermarkets. And I must say
it was difficult to get them all together in a room at the same time. But, in the circumstances,
once I got the information from the supermarkets, and also the discussions I had with Choice, I
reached the conclusion that the information that would be available would not be timely, would not
be necessarily accurate on a store-by-store basis, and that was really the objective for people to
be able to make informed choices based on what they believed to be accurate, timely information.

ALI MOORE: And that's despite Choice obviously feeling that the information would be timely and the
website would be worthwhile, and indeed two of the chains, Aldi being one of those two, agreeing to
take part?

CRAIG EMERSON: Yes, there were two phases. One was from 1 July, where Aldi and FoodWorks, as I
understand, would take part in that, but third party information would be provided and it would be
quite limited about Coles and Woolworths and also Franklins should be involved in anything like
this. That third party information would include and maybe even comprise substantially specials,
and I don't know that providing specials information would've given accurate information to
customers about the actual prices some time later, even days later, in those stores. Then in the
longer term, there was supposed to be 5,000 to 7,000 prices. Now, there's more than 2,000
supermarkets in Australia, so we're talking about 10 million to 14 million prices per week, and I
was concerned that without the cooperation of the major supermarkets, that customers would not be
getting accurate, reliable information on which to make their decisions.

ALI MOORE: So why wouldn't the major supermarkets cooperate? Because in terms of it being an
argument of feasibility, the fact that some would would seem to debunk that argument, wouldn't it?

CRAIG EMERSON: Well, I think in the case of Aldi, they have a more limited range of products.
Choice were looking at somewhere around 5,000 or even 7,000. That's a huge data collection task.

ALI MOORE: But Minister, to be fair, the major supermarkets do collect that information - every
time they change a price, it goes into the internal system so it can be read at the cash register.
That information is already collated and collected.

CRAIG EMERSON: Well they indicated to me that passing that information on on a timely basis would
not be easy. They were concerned about such things as legal liability, concerns about allegations
of false and misleading conduct, which though perhaps would not have been upheld in a court because
of various disclaimers including by Choice, could lead customers nevertheless to say that they'd
prepared a shopping basket based on this computerised information, and when they went into that
particular store in that locality, the prices were different and the total bill was different. Now,
we can have lots of disclaimers about that, lots of date stamping, but if the information is not
accurate, then that's a problem for everyone as far as I'm concerned and I think consumers would
say, "Well, we were told that this information is accurate, but it's not."

ALI MOORE: Well I guess this then goes back to my initial question: if it wasn't feasible, why
spend the money on it? Because the reason that you've given for it not being feasible is simply the
vast array of products and the vast array of supermarkets, and that hasn't changed since the moment
this website was put into action. I just wonder what the trigger was? What was new, because you
always knew that there was going to be a vast amount of information?

CRAIG EMERSON: Well, I'll just give you an example of that, Ali. I had not before I became the
Consumer Affairs Minister heard of 5,000 different grocery items being included in this exercise
every week across more than 2,000 stores, 10 million bits of information. Now, it's one thing to
provide consumers with information about a broadly representative basket of grocery items, but if
Choice in this case is expecting the supermarkets to come up with every week 5,000 prices in every
store around Australia, that's an enormous task and I was worried about the inaccuracy of it. I
also - or the potential inaccuracy of it. I also found that it was very difficult to get Choice in
the same room as supermarkets. I did invite Choice to the meetings with supermarkets, contrary to
suggestions that they learned about it on the Thursday night at 8pm. I first raised that on the
Tuesday, again on Wednesday asked them to come, again on Thursday asked them to come, then in
writing on Thursday night. They chose not to come, said they were too busy. Well, OK, that's fair
enough, but when you can't actually get Choice and the supermarkets in the room at the same time,
it doesn't give you a lot of confidence about the capacity of this exercise to succeed in the long
term.

ALI MOORE: In essence, though, it is right to say that it was Coles and Woolworths, it was the big
chains, that caused the death of this?

CRAIG EMERSON: Coles and Woolworths said that they would not be able to supply this information.
The IGA stores, which are small corner stores, local community stores said they would not be able
to supply the information, Franklin's said they would not be able to supply the information. So I
do wonder about the value of a site that purports to represent accurate information that does not
include Coles, Woolworths, Franklin's or IGA.

ALI MOORE: So, are you therefore questioning the credibility of Choice, which has spent a few
millions and obviously feels that they have got a credible site?

CRAIG EMERSON: Well I'm questioning the feasibility of it, Ali. Between 10 million and 14 million
prices each week, each and every week, provided as accurate information. I think that that was an
enormous task and perhaps it was too ambitious. But that was what was being proposed.

ALI MOORE: So, are you now actively talking to the retailers about running a similar sort of
website themselves?

CRAIG EMERSON: I'm prepared to talk to the retailers about that. It would need to be independently
audited. I don't believe that the retailers would have strong incentives to mislead people, but
let's see how those discussions go.

ALI MOORE: Well, can I ask you, Minister, what's being proposed? Is it something - obviously, it's
not feasible for Choice to do it, one would have to imagine it's not feasible for the retailers to
do it either?

CRAIG EMERSON: Well, that's why I'm not raising expectations about Ali. You've said, "Are you
having discussions?" Yes, I will have discussions. I haven't said that it will result in an outcome
with a particular number of items in a particular number of stores. I don't see any harm in having
the discussions, but as far as Grocery Choice is concerned, that is not going ahead. We will have
those discussions. They may or may not be fruitful, but I'll give it my best shot.

ALI MOORE: Would you be prepared to put some of that $13 million, what is left, what was orginially
allocated to Grocery Choice, through to the retailers if they want to run their own site?

CRAIG EMERSON: No, if the retailers want to run their own site, they can fund the running of their
own site.

ALI MOORE: Minister, many thanks for talking to Lateline Business.

CRAIG EMERSON: OK. Thank you, Ali.