One of Australia’s leading industry executives, Pacific Brands chairman Peter Bush, says that the future of Australia’s iconic retail and grocery suppliers is in doubt as Coles and Woolworths continue to dominate the sector.
Bush believes that smaller companies are likely to fold as the two supermarket giants expand into new market segments, according to the Australian.
“We are going to probably see in the next 10 years some quite iconic local brands just disappear off the face of the earth,” said Bush told the Australian.
“If you are a small supplier and you want to have your product listed with the major chains – anywhere, whether it is in liquor, apparel or on the supermarket shelf- it’s going to cost a lot of money. It is pretty tough.”
His comments have come as the duopoly enters final negotiations for a voluntary code of conduct with food and grocery manufacturers.
Assistant treasurer David Bradbury has warned that the government may develop a mandatory code of conduct if negotiations for the voluntary code did not equate to a “meaningful” outcome.
The ACCC is also examining the impact of private-label groceries on competition in the supermarket sector. Coles had recently warned suppliers that they risk not being given new business if they are deemed inefficient.