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Thursday, 29 March 1973
Page: 943


Mr MORRIS (Shortland) - This evening I want to bring before the House some matters relating to food price increases and certain practices that exist in the food retailing industry at the present time. We have heard for many years from the Opposition, the former Government, that price increases are always the result of wage increases, that demands for wage increases result in further price increases, and that there is really only one reason for a price increase and that is a wage increase.


Mr Street - We have never said that.


Mr MORRIS - We know that your memories are short and your minds befuddled, but 1 accept your comment. The situation is that there are many reasons for price increases within the food retailing industry which have no relationship whatsoever to costs, wage structures or wage increases. Over the past 23 years of Liberal-Country Party economic mismanagement the worker of this country has seen a steady eroding of the real purchasing power of his wage. Some price increases are caused by the fluctuations in world market prices and in the international supply and demand situation. Cost increases can occur as a result of these fluctuations and as a result of increases in the cost of raw materials, which the honourable gentlemen opposite are presently benefiting from in the field of meat prices, wool prices and honey prices. However, other price increases are not caused by wage demands or wage increases.

The larger and more insidious area is that in which large scale price increases are made without justification, without the appearance of those seeking the increase before a tribunal and without reference to any public authority or to public opinion. I refer to unfair trade practices, sharp trade practices and restrictive trade practices which currently prevail in commerce in this country and particularly, a» I said earlier, in the food industry. Over the last 23 years we have seen a steady progression in Australia towards a condition of oligopoly in the food industry, both in the manufacturing and retailing of food. We have seen the gradual elimination of the little man, noi only from the retailing but also from the manufacturing and wholesale fields. In fact, from all areas of activity in the industry there has been an elimination of the little man. It has been very hard to understand why this has happened over the past 23 years, bearing in mind that the interests of commerce ought to have been the interests of the then LiberalCountry Party Government. We have seen the gradual takeover of Australian food industries by mammoth overseas corporations and multinational corporations, and the crushing of the smaller man, the smaller retailer. The wiping out of the interests of the small man has helped to remove the competition that ought to exist in the economy and in the community to provide a check not only on prices but on services as well.

I will not go into detail this evening about the companies and commodities concerned. I reserve that for a later occasion, lt is sufficient to say at this stage that most of the Australian food manufacturers and food retailers are presently foreign owned. I defy any member of this Parliament to get up in the morning and traverse the course of a natural day without, as the result of eating or drinking, sending some profit content out of this country. Yesterday in this House 1 directed to the Minister representing the Attorney-General (Senator Murphy) a question regarding the refusal of a British-owned and controlled company to supply a confectioner in my electorate with confectionery, of all things. The confectioner has been in operation for many years and is a man who serves the little people. He is the in-between man, not a gigantic retailer, not a gigantic merchandiser.

Tonight I want to mention another practice that forces on the consumer price increases without any regard to cost, market demand or any semblance of competition. The practice of chain stores and the major retailers is to demand from manufacturers promotional subsidies which over a year run into hundreds of thousands of dollars in the case of some of the larger retailers. This is a situation in which major retailers can virtually extort from a manufacturer several hundred dollars a week for the right to have his product located in a particular position in the retail store. This cost has to be borne by the manufacturer. In some cases a quantity of products is supplied to the retailer by the manufacturer at a specially reduced price, even in some cases at below cost, in order to maintain the national image of the product. The special price at which these goods are supplied is such that an independent wholesaler, let alone a retailer purchasing through a wholesaler, cannot even compete on the open market. The result is that, of a quantity of goods purchased by the retailer, some are fed on to the market, some are fed out to the consumer and some are held back to be sold at a much higher price at a later stage. Consequently the manufacturer does not derive any benefit.

The cost of this subsidy and of this lower price at which the products are supplied to the major retailer has to be borne by the manufacturer over the whole range of his production so that the price of every unit of his production carries some content for the cost of this promotion. That promotion cost which is borne by the manufacturer as a hidden cost that he cannot justify to the public is passed on to all consumers. This means that that segment of the retailing industry which manages to buy on promotion gets the benefit of a cost which is borne by that sec tion of the industry which does not participate in the sharing of this promotion 01 receive any benefit from a lower cost. This method of major retailers holding manufacturers to ransom has meant the breaking down of the manufacturers' approach to the retail industry. These retailers can virtually tell the manufacturers to market on the retailers' terms or the product will not he marketed at all. At the same time the major retailer is supplied at a price which is in many cases lower than that available to the legitimate wholesalers whose function it is to supply smaller retailers. Again it is the public which has to pay the price of all this.

The practice I have outlined is one which I hope will be among the first things to he looked at by the prices justification tribunal when it comes into operation and I hope it will be closely examined as well by the Joint Standing Committee on Prices. This is a practice in which only the large retailers and marketers of products can participate. This Government has a clear mandate and responsibility to bring into operation anti-restrictive trade practices legislation and along with it a prices justification tribunal. The Australian consumers have a responsibility to organise themselves and to start to act in a manner by which they can combat price increases. There has been some reflection of that attitude in the United States of America in the last week where, there has been a strong reaction to the tremendous price of meat. I heard that as a result sales had fallen by 70 per cent. I think it was in New York that this occurred. Food is one commodity that people cannot do without. They have to buy some kind of food whether it is the cheaper chicken or the dearer meat but they cannot exist without it. They can defer the purchase of other products. In this way the oligopoly in the food industry has as much power as, or greater power than, an oligopoly in a non-food industry has.

I conclude on this note. Whilst this situation has developed over the past 23 years, 10 years ago in South Australia the then Liberal Premier, Sir Thomas Playford, introduced into the South Australian Parliament a Bill called, as I recall it, the Prices Bill 1963 which forced retailers offering products for sale at a price to have, on their premises reasonable quantities of that product. In addition to the last practice I mentioned, major retailers advertise extensively products for sale at a price which must attract people into their stores. When the consumers arrive as early as 8.50 or 9 a.m. on the day the product is advertised for sale there is very little of the product available, if any at all. As long ago as 10 years Sir Thomas Playford wrote into that Act a requirement that reasonable quantities of the product had to be available for sale.







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