Page 1158 - Week 04 - Tuesday, 8 April 2008
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Business—predatory pricing
MR MULCAHY (Molonglo) (6.17): Late today I received two media releases by fax—I am not sure whether other members received them—from Eric Koundouris of the Supabarn supermarket group. They raise issues of real concern to the people of Canberra, and I wanted to read out aspects of these two releases. The first one is headed “Woolworths scuttles Supabarn’s attempt to bring real competition to help battling Queanbeyan families”. The release says:
At a time when grocery prices are escalating and the ACCC is conducting a major review into supermarket prices, Woolworth strikes at a small independent grocer right in the ACCC’s backyard.
Woolworths is determined to continue its dominance in the ACT and region with the end result being continued higher prices for groceries in the ACT and Queanbeyan.
In December last year the Koundouris group, who operate Supabarn supermarkets in Canberra was negotiating to purchase the separately owned Supabarn at Karabar in Queanbeyan. Contracts for the sale between Koundouris and the Karabar owners were drawn earlier this year but not exchanged.
In recent days Supabarn became aware that Woolworths had become interested in acquiring the Karabar store despite stating to various people that it was not interested in the store.
Supabarn sees the Woolworths move as seeking to stop a real competitor entering the Queanbeyan market. Woolworths already has two stores in Queanbeyan and the Karabar store sits strategically between the two. A small supermarket at the current site at Karabar is not a threat to Woolworths but Supabarn is a full service operator and will convert Karabar to that format which will challenge Woolworth’s dominance.
Woolworths is the major player in both markets of Canberra and Queanbeyan. Supabarn is a minnow when compared to Woolworths.
The release goes on to note:
This attempt to remove competition in the Queanbeyan grocery market could not be more blatant and it is not the first time that Supabarn has been in Woolworth’s sights.
I am aware of previous actions, and I have spoken with Supabarn on matters that have come before the ACCC where selective pricing has been engaged in by Woolworths in parts of Canberra to try to damage this competitor. Predatory pricing came into place when Supabarn opened a full-service supermarket at Wanniassa in Canberra in 2007, and Woolworths seems determined to make sure that the Supabarn does not expand.
The second release went on to talk about the evidence they gave in Canberra today before the ACCC groceries inquiry and certainly highlighted some of the evidence
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