Supermarket dominance “extreme capitalism”: Dick Smith

Dick Smith has slammed the supermarket dominance in Australia, labeling it “extreme capitalism,” and likening it to terrorism.

The Australian entrepreneur was speaking to workers at O-I Glass in Penrith yesterday, where jars for his new range of fruit spreads are being manufactured.

“You are an endangered species,” he told workers at the factory.

“And the reason you’re endangered is you’re a manufacturer here in Australia, which is fantastic.

“We could have actually bought a bottle cheaper from China, but I said ‘no way, we’re as Australian as you can get.’

The ‘As Australian as you can get’ claim is one the Dick Smith Food company has defended, as many criticise it for not being completely local.

“We have a claim that says “Australian as you can get,” because there’s nothing that’s 100 per cent Australian, nor should it be,” he explained.

“In a globalised world, if we want to be able to export, which we do – especially our minerals – we need to import. But it works very much against Australia’s favour.

“People criticize me, they say ‘oh Dick, you’re going on about buying Australian but you used to import from Japan,’ and my answer to that is ‘I sold the best.’

“The Japanese made the best electronics, and that’s why I sold the best electronics and that’s why I sold them.

“The Swiss make the best watches and Australia grows the best food, without any doubt.

“What we should be doing is selling food to the whole world, but we’re not.

“We are now a net importer of fruit and vegetables: absolutely outrageous.

“Of course, we have problems competing with countries.

“I saw in Woolworths there were some peaches and they were from a small country in Africa, and I looked up at the internet and found that 50 per cent of people in that country earn less than five dollars a day, so how could you possibly compete with that?”

"Ruthless retailing"

Smith has slammed the cut throat tactics used by the major supermarkets to win the supermarket wars when questioned by Food Magazine over the latest decision by Coles to halve the price of produce, following the milk price wars last year.

“All [Coles] do is they out the prices of everything else up,” he said.

“You don’t have to be very bright to work out that they’re selling things cheaper but they pay their chief executive five times what they ever paid before and they’re making record profits.

“It’s because everything else is put up slightly.

“So unfortunately, when you see this kind of great con – you think ‘I’ll go to Coles and buy my fruit and veg 50 per cent cheaper – all I can tell you is that I am a businessman and I’m sure you have enough common sense to work out that if someone reduced the price by 50 per cent but then makes more money, what’s going on?

“Everything else is just put up so slightly you wouldn’t notice it.

“It’s ruthless retailing.

“It’s extreme capitalism.

“Capitalism is a great system and we’ve done very well out of it in the western world.

“But anything gets to extreme.

“We’ve seen extremism in religion where people run planes into buildings.

“I see the same happening with capitalism, where you get Rupert Murdoch earning $30 million a year and there are 30 million on food stamps in the Unites States.”

Australians are getting conned

Smith agreed with Simon Coburn from peak growers representative body, AusVeg, that the choosing price over products grown and manufactured locally will lead to a complete dependence on imports.

The new range of fruit spreads he was launching yesterday, which will be packaged in glass made at the Penrith factory, is to compete with the imported fruit jams and spreads dominating Australian shelves.

In particular, Smith has taken aim at the St Dalfour brand which is imported from France, with French writing on the packaging.

“It’s like if you go to a restaurant and the writing’s in French, it’s got to be better!”

“It’s amazing how we get conned.”

He explained that the product is called a fruit spread because it does differ from most commercial jams and marmalades on the market.

“It’s called a ‘fruit spread’ because it’s made without any cane sugar,” Smith said.

“We’ve got a wonderful company called Spring Gulley, Aussie family company in Adelaide who are making the range and the beautiful honey, where I’ve actually picked the three types of honey, Aussie honey.

“And of course, the jar is manufactured here, right here, and I am absolutely so proud that we’re able to get a manufacturer here in Australia that’s employing Australians.

There is a cost to being ‘as Australian as you can get’ though, but Smith baulks at the suggestion Aussie families aren’t willing to spend a little more on providing good food for their kids and jobs for Australians.

“We’ve got a catch, and that is that it’s going to be about 20 cents dearer than the St Dalfour,” he said.

“Now what I’m told by the supermarket buyers is that people only buy the cheapest food.

“I think that’s ridiculous.

“Australians don’t buy the cheapest cars, we buy the middle of the range cars, because Australian families want something that’s quality, that’s safe! We don’t even buy the cheapest pet food!

“Over a billion dollars of pet food is the ‘Dine’ brand, which is 60 per cent dearer.

“So we actually buy the best for out pets, but when it comes to our children, by the look of it, we just buy the cheapest!”

“What I’m saying to Australians is not only is this a better product because it’s taken from beautiful Australian fruit, but you can feel good because you’re supporting Australia.

“You’re supporting farmers, you’re supporting workers.

Smith slammed the decision by Coles not to stock the products, as it continues its campaign to stock the cheapest possible items, despite where they come from.

“We’ve got to get Australians to be willing top pay an extra 20 cents to support the home team.

“Woolworths is taking the five new products, but Coles won’t, mainly on price!

“Coles are letting Australians down, in this particular case.

“I couldn’t believe it.

“[It’s a] beautiful Australian product, but the minute they found out it was 20 cents dearer, their belief was ‘no.’

“If you go into Coles, and Coles have previously been good supporters of Australia, you’ll find that in their fruit spread range, from what I could see, everything is imported!

“Whereas Coles used to say when you were selling something to them ‘you’ve got to make some money, just as we’ve got to make some money,’ now they actually say ‘we don’t actually care if you go broke, we’re just going to sell the cheapest.’

“If you’re only going to sell the cheapest, we’ll have no local products and they say, ‘well so be it, it’s up to the marketplace,’ and I agree, it is up to us, who need to not only say they support Australians, but actually do it.”

Woolworths, Coles will become like ALDI

Smith agrees with predictions of huge private-label growth in Australian supermarkets, as the traditional business model is removed and replaced with a much tougher one.

“The freedom we’ve usually had in Australia is that you could go to a supermarket and decide if you wanted to buy Australian, imported, high-quality, low-quality, it was up to you.

“ALDI has taken that decision away.

“The problem is that because so many of us go to ALDI because the prices are cheaper, Coles and Woolworths will copy.

“The reason ALDI’s so successful is you can’t compare a price.

“What Coles and Woolworths will do to compete with that, which they must do because they have Aussie mums and dads as shareholders and the board will get the sack if they don’t keep making profits each year, so they will go to more and more products where you can’t compare a price.

“I call that ‘extreme capitalism,’ and it’s a disadvantage to consumers.

“It will lead to slightly lower prices, but I can imagine in years to come you will go into Coles and Woolworths and it will be like ALDI, virtually nothing will be a famous brand.

“Hopefully they will still sell Dick Smith’s but who knows.

“They will make a fortune because you, the consumer, can’t compare the price.

“Maybe then we’ll start to get a build up of the small corner shops.

“The own brand will get bigger and bigger and it will be worse for typical Australians.”

What’s your thoughts on the private label products in supermarkets? Do you actively support Australian food companies?

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