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Tuesday, 29 May 1973
Page: 2748


Mr MORRIS (Shortland) - In speaking to Appropriation Bills Nos (5) and (6) 1972-73 now before this House I want, in the short time available to me, to enlarge on remarks I made here a few weeks ago on an adjournment debate in relation to the crystallisation of ownership of the food retailing industry of Australia and the subsequent reduction in competition and market access. Division 140 of the estimates for the Attorney-General's Department shows an additional appropriation for 1972-73 of $49,000 for the Office of the Commissioner of Trade Practices. The pending changes and strengthening of the Restrictive Trade Practices Act are long overdue, and it would seem to me that additional assistance is required in the Attorney-General's Department to expedite the legislation needed.

This Government has indicated its intention to abandon the restrictive trade practice proposals of the previous Government and to replace them with an improved, modernised version of the Industries Preservation Act embodying an outright prohibition of all horizontal agreements, similar to that which applies to resale price maintenance. Where people suffer as a result of restrictive practices the law would rely on civil remedies to enable them to recover damages.

Since World War II there has been a number of changes in the food retailing industry - some desirable, some undesirable. Available statistics show that annual turnover in the food retailing industry has grown from $ 1.600m in 1956-57 to $2,040m in 1961-62 to $3, 273m in 1968-69. This represents a food retail turnover per head of $105, $192 and $272 for each of the respective years. These figures reveal a greater than 100 per cent growth in turnover during the year 1956- 57 to 1968-69 yet during this period the number of establishments selling these goods decreased from 138,500 to 57,000 outlets. For the year 1970-71 the 5 largest firms were responsible for 18 per cent of turnover whilst the 10 largest firms were responsible for 29 per cent of total sales in Australia.

Several reasons have been advanced for the reduction in the number of outlets. The attractiveness of economies of size - the grouping together of outlets into regional centres with a form of one stop shopping - airconditioning, provision of childminding centres and parking facilities are benefits that the smaller trader has found much harder to match. The so-catted free delivery offered by large chains is however a dubious benefit to the housewife for which varying fees are charged. Another reason that has limited the entry of new food retailers has been the growing capital investment required. We have seen a conversion of the food retailing industry from a labour intensive one to a capital intensive one. The extension of trading hours will Increase the pressure and rate of decline of the smaller man and ultimately the range and quality of service available to the consumer.

The reduction in the number of retail food outlets, the growth of gigantic chains and the massive entry of overseas participation in the food industry brought about a number of practices that operate against the interests of the consumer but in a kind of selfaccelerating, self-preserving kind of way for the major companies involved. We should remember that as long ago as 1968-69 expenditure on food was $272 per head or in excess of $5 per week per man, woman and child in Australia.

Price rings and special deals between manufacturers and the giant retailers placed the smaller retailer and wholesaler in a position where they could not compete. In fact, even today the Attorney-General's Department is inquiring into a number of instances of preferential treatment where some long-standing wholesalers can buy products more cheaply from a giant chain store than they can from the manufacturer because of preferential pricing policy by the manufacturer or special deals that have been made by the manufacturer with the giant retailer concerned. This practice, in effect, forces out other retailers and wholesalers and thousands have gone to the wall in the period mentioned.

What of the so called specials and cheaper prices offered the consumer by the large retailer? In almost any mid-week newspaper one can read of specials 'Under Cost - Limit 2' or some similar number. However, ask any special shoppers how many times they have gone to a store, particularly the giant chains, on the morning the limit specials were advertised, even at the time the store opened for business, only to be told the store had sold out or that there may be some more tomorrow or another day. This practice has been further refined now to what is called 'hour specials' in which case a special price is applicable for a period of one hour, between, say, 2 p.m. and 3 p.m. only.

What happens in many cases is that people read these advertisements, particularly the needy, the pensioners, the battlers who h;-.-e to scrimp and save every cent under the legacy of inflation we have inherited from tie previous Government, and they travel distances to get to the particular store only to be told: 'We sold out'. In a branch of one giant chain store the practice is followed sometimes of putting on a small display of the limit specials in an out of the way section of the store but putting on a very large display of the product in a multiple pack at the normal shelf price in a well trafficked section of the store. This is deliberate deception on the part of the retailer concerned and I hope that persons who have experienced this kind of thing will write in to my colleague, the honourable member for Adelaide (Mr Hurford), in his capacity as Chairman of the Joint Parliamentary Standing Committee on Prices, telling him the circumstances.

The theory of the practice of limit selling is that people are attracted into the store with the carrot of limit under cost specials to expose them to any array of other goods, and as I said earlier the consumers most receptive to this practice are the needy. At the same time other smaller retailers in the industry cannot compete against these supposedly lower prices. The practice of limit specialling is an evil one, a deliberate deception practised in the main by the giant chains in some States of Australia to gain a greater share of the Australian food market - and it has worked. I hope that legislation can be brought into this Parliament to prevent its continuation.

As far back as 12 November 1963 the Hon. Sir Thomas Playford, then Premier and Treasurer of the Liberal Government of South Australia, brought in the. Prices Act (Amendment) Bill to the South Australian Parliament to prohibit limit specialling. On page 1590 of 12 November 1963 South Australian Assembly Hansard he said:

First there is the practice of offering goods for sale by retail, usually at or below cost with a limit on the number of goods which may be bought at a certain price.

He went on to say:

Secondly, there is the practice of advertising goods for sale which are not either possessed by the trader at all or possessed in much smaller numbers than implied in the advertisement.

He further mentioned the placing of misleading advertisements either by description or implication. He described how pressure was brought to bear on manufacturers and wholesalers by traders demanding greater discounts or lower prices than customary by threatening either not to sell the manufacturer's product or locating it in a poor selling position in the store. Referring to the legislation he said that it was a familiar form of legislation in America. It had been adopted in the. United States and had resulted in small traders not being placed in an unfair trading position as compared with that of the larger business..

The comment made by Sir Thomas Playford almost 10 years ago is as valid today as when he made it, with the exception of South Australia. I believe that if a trader offers a product for sale at a price he should be required to make available to a prospective purchaser whatever quantity of the product he has to sell and for which the purchaser can pay in legal tender.

I support the Bills before the House.







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