Woolworths: the farmer’s friend!

By the middle of 2006, it was Sunshine Coast farmers, followed by strawberry, and then dairy farmers, who were “sick and tired of being rorted by the major supermarket chains”. According to the State member of Nicklin, “when I was trying to intervene on behalf of the dairy industry, I spoke to senior people in Woolworths and their response was, “we are not in the business of doing what’s good for dairy farmers, we are in the business of making profits for shareholders” (Sunshine Coast Daily November 29, 2006).

Consumer Protection (WA) at the same time was charging Woolworths with breaches of regulations relating to fuel pricing. And at year’s end, the ACCC after a three year battle, saw Woolworths fined $7 million for anticompetitive behaviour in the liquor market (ABC December 22, 2006).

During this same period, the CEO, a devout Christian, presided over a corporation which has become the largest liquor supplier and gaming operation (12,000 gaming machines) in the country, as well as a major pusher of tobacco, one of the largest cancer producing poisons, in Australia (400 deaths a week).

The New Year saw Woolworths under renewed attack, first on the cost of groceries and then over the cost of fuel. Despite the assurances from Woolworths, that “the drought was to blame for the cost of a basket of groceries rising 7.3 per cent, consumer experts said the nation’s supermarket duopoly was more likely the reason” (The Courier-Mail January 4, 2007). According to the NRMA, when it came to the cost of fuel, the supermarkets, including Woolworths, are “reducing competition by squeezing independent chains out of the marketplace” (ABC January 16, 2007).

Given this kind of publicity, the feeling among farmers, motoring organisations, consumer advocates, politicians, and the courts, its little wonder that Woolworths is desperate to be seen as the farmer’s friend.

It does however raise a number of issues, which should be considered before dashing off to do your shopping.

First, does it matter if there is a contradiction between what Woolworths does in its drive to keep shareholders happy, and its decision to give up a day’s profits? Do farmers, the CWA or even Woolworths itself, acknowledge any contradiction? Woolworths is not alone in putting up firewalls between its various operations, as a reading of the current Los Angeles Times analysis of the contradictions between the good works of the Gates Foundation and its investment policies shows.

How will the issue of profits be determined? Will strawberry farmers, or egg and beef producers, or fruit growers be any closer to knowing how much Woolworths is making on their products?

Finally, what of the CWA? Like churches, the CWA is slowly disappearing, yet in the same significant way, it’s an institution propped up by government cash. In 2002-3 it received $1 million for drought relief; this was followed by a further $3 million in 2005, and then at the end of 2006 another $4 million. And now another $3 million from Woolworths. To what extent administrative fees from these grants is keeping the CWA viable would make for interesting reading.

All in all it’s a spin doctor’s dream: families will receive a bit of cash, the CWA which fell for the con, will see both its bank balance and status enhanced, and Woolworths, will be seen to be doing its bit to maintain, “the unique rural heritage of Australia”!