Latest / What the Flux / Woolworths squeezes suppliers (again) | Big Bash opens up to investors | Anthropic wants AI to slow down

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Woolworths squeezes suppliers (again) | Big Bash opens up to investors | Anthropic wants AI to slow down · What the Flux

• 0:05
  Speaker 1: This is What The Flux. I'm Brett.
• 0:07
  Speaker 2: And I'm Justin. And it's Wednesday the 16th of September.
• 0:10
  Speaker 1: The scammers are coming for Aussies and Aussies are falling
• 0:13
  Speaker 1: for it too. Get this one. Data from the government's
• 0:15
  Speaker 1: National Anti-Scam Centre showed that Australians lost nearly $ 2. 2 billion
• 0:19
  Speaker 1: to scams in 2025 and almost 40% was from investment scams.
• 0:24
  Speaker 2: Scams left, right and centre beam and... Fluxam, did you
• 0:27
  Speaker 2: know 29% of millennials prioritize work-life balance over other career goals?
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  Speaker 2: it's right for you. If you want to learn more
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  Speaker 2: about what it is and what the stats tell us,
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  Speaker 2: make sure to download the Flux app and check out
• 0:40
  Speaker 2: our latest article.
• 0:41
  Speaker 1: Three massive stories today, Jazzy Boy.
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  Speaker 2: Let's do it.
• 0:44
  Speaker 1: For our first, Woolworths is allegedly... telling many of.
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  Speaker 2: Its suppliers that it'll wipe their products from supermarket shelves
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  Speaker 2: if they don't agree to some lower prices. We're not
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  Speaker 2: forcing you, but you know the consequences. Tell me more.
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  Speaker 1: Well, we know that Woolies is one of Australia's two
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  Speaker 1: big supermarket chains, making up nearly 40% of the national
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  Speaker 1: grocery market.
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  Speaker 2: That's compared to Coles, which makes up around 30%. And
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  Speaker 2: of course, other supermarket brands like Audi and IGA are
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  Speaker 2: making up the rest.
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  Speaker 1: And lately, both Woolies and Coles have been under huge
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  Speaker 1: pressure to keep grocery prices down. Yeah.
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  Speaker 2: Yeah, we know that cost of living pressures are real
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  Speaker 2: and shoppers are becoming a lot more selective about what
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  Speaker 2: makes it into the trolley.
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  Speaker 1: That $ 16 blue cheese may not make the cut anymore.
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  Speaker 2: But despite the cost of living crunch, Woolies is actually
• 1:27
  Speaker 2: doing pretty neatly.
• 1:28
  Speaker 1: Yeah, its sales jumped 4.6% this year.
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  Speaker 2: But now, B-Man, a bunch of anonymous Woolworths suppliers are
• 1:34
  Speaker 2: saying that Woolies is threatening to take their products off
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  Speaker 2: shelves if they don't make them consistently cheaper. Apparently, multiple
• 1:40
  Speaker 2: companies have been told the same thing by Woolies. Mm-hmm.
• 1:43
  Speaker 2: invest in lower prices, or we might have to get
• 1:45
  Speaker 2: rid of you. And they're doing this through what they
• 1:47
  Speaker 2: call a range reduction. Interesting.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: A range reduction is when a supermarket reduces choice on
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  Speaker 2: the shelf for a particular category.
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  Speaker 1: It may sound harmless to consumers, but for a supplier,
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  Speaker 1: losing your spot on the shelf can basically end the product.
• 2:00
  Speaker 2: And B-Man, the ACCC found last year there's a serious
• 2:04
  Speaker 2: bargaining power imbalance between the big supermarket chains and their suppliers. Yep,
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  Speaker 2: suppliers often have nowhere else to go. So when Woolie says,
• 2:10
  Speaker 2: cut your price or get cut, that's not really a negotiation.
• 2:14
  Speaker 1: And get this one, Jazzy Boy, Kohl's has pulled a
• 2:16
  Speaker 1: similar move.
• 2:17
  Speaker 2: Yep, they've also supposedly told suppliers to absorb rising costs
• 2:20
  Speaker 2: instead of passing them on.
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  Speaker 1: In fact, Coles now stocks around 5,600 exclusive to Coles products,
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  Speaker 1: up 1,600 in just one year.
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  Speaker 2: So every new home brand item is basically one less
• 2:31
  Speaker 2: shelf spot for an independent supplier.
• 2:33
  Speaker 1: For our second story, Cricket Australia announced last week their
• 2:37
  Speaker 1: plans to open up the Big Bash League to private
• 2:39
  Speaker 1: investors that will turn the league into a billion dollar opportunity.
• 2:42
  Speaker 2: Cricket Australia ready to take on the IPL and the 100.
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  Speaker 2: So tell me more.
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  Speaker 1: So Cricket Australia is the governing body for cricket here
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  Speaker 1: in Australia.
• 2:49
  Speaker 2: They run everything from the Big Bash League to the
• 2:51
  Speaker 2: national cricket teams.
• 2:52
  Speaker 1: And Jazzy Boy, since the Big Bash League launched in 2011,
• 2:55
  Speaker 1: the state associations have owned their local teams. So that
• 2:58
  Speaker 1: means Cricket Victoria owns the Melbourne Renegades. WA Cricket owns
• 3:01
  Speaker 1: the Perth Scorchers, the 2026 champs.
• 3:03
  Speaker 2: And Cricket New South Wales owns two teams, the Sydney
• 3:06
  Speaker 2: Sixers and Sydney Thunder. But now Cricket Australia has given
• 3:09
  Speaker 2: those state associations the green light to sell major stakes
• 3:12
  Speaker 2: in their big bash teams to private investors. Or as
• 3:14
  Speaker 2: they call it, self-determination.
• 3:16
  Speaker 1: Get this one. The Cricket Australia CEO thinks this is
• 3:19
  Speaker 1: the biggest strategic decision Australian cricket has made in a generation.
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  Speaker 2: Because the idea is private investors bring deeper pockets. To
• 3:26
  Speaker 2: grow the T20 team brands. To attract big name players.
• 3:29
  Speaker 1: Improve the competition.
• 3:30
  Speaker 2: But without private cash stepping up to the crease, Cricket
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  Speaker 2: Australia reckons it risks losing its best talent to richer
• 3:37
  Speaker 2: leagues overseas.
• 3:37
  Speaker 1: Yep, so what's the key learning here?
• 3:39
  Speaker 2: When a rival league can outbid you, your talent pool
• 3:41
  Speaker 2: starts leaking overseas.
• 3:43
  Speaker 1: Yep, the Indian Premier League, the IPL, privatised early, which
• 3:46
  Speaker 1: meant that league could throw serious private money at player contracts.
• 3:50
  Speaker 1: And more recently, the England and Wales T20 league called
• 3:52
  Speaker 1: The 100 was also privatised. In fact, Aussie Test captain
• 3:56
  Speaker 1: Pat Cummins said players knocked back close to $ 1 million
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  Speaker 1: offers from The 100 just to play for Australia instead.
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  Speaker 2: That's a lot of cash to leave sitting in the slips.
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  Speaker 1: So, Justin Boyd, global cricket has basically become an arms race.
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  Speaker 2: Yeah, one T20 league in the market spends big, everyone
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  Speaker 2: else has to match it or fall behind.
• 4:12
  Speaker 1: An arms race a bit like ride share back in
• 4:15
  Speaker 1: the day.
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  Speaker 2: Yep, both Uber and Lyft in the US burned billions
• 4:18
  Speaker 2: subsidising rides, so neither lost market share. Or streaming, Netflix
• 4:22
  Speaker 2: spent big on originals and suddenly Disney and Amazon and
• 4:25
  Speaker 2: everyone else had to open up the checkbook too. Yep,
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  Speaker 2: so Cricket Australia feels like private capital isn't really optional anymore.
• 4:30
  Speaker 1: No, it's essentially the entry fee just to stay competitive globally.
• 4:34
  Speaker 2: For our third and final story, Anthropic's CEO has asked
• 4:38
  Speaker 2: the AI industry to slow down in its, quote, reckless development.
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  Speaker 1: And this is all happening just a very short while
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  Speaker 1: before Anthropic is trying to take itself public. Wow, Jazzy Boy,
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  Speaker 1: so tell me more.
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  Speaker 2: Okay, Anthropic is the company behind Chatbot Claude, which has
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  Speaker 2: grown crazily fast over the past few years.
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  Speaker 1: In fact, Anthropic was founded in 2021 by ex-OpenAI staff
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  Speaker 1: who left the company over alleged safety disagreements.
• 5:00
  Speaker 2: And then over the weekend, Anthropic's CEO wrote an essay...
• 5:03
  Speaker 2: calling for the whole AI industry to slow down their
• 5:06
  Speaker 2: model development. And why is that? Well, there was concern
• 5:09
  Speaker 2: that AI could run out of control. And OpenAI and
• 5:12
  Speaker 2: Grok CEOs have actually agreed to slow down. And Ben,
• 5:15
  Speaker 2: how would this slowdown actually work in practice?
• 5:17
  Speaker 1: All the fun stuff, bringing third-party model evaluators, shared safety
• 5:21
  Speaker 1: standards across all LLMs.
• 5:23
  Speaker 2: And even coordination with government.
• 5:25
  Speaker 1: But Jazzy Boy, there's another interesting layer to this one.
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  Speaker 2: Yeah. Might I remind you that Anthropic is planning to
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  Speaker 2: IPO at a near $ 2 trillion US dollar valuation over
• 5:32
  Speaker 2: the coming weeks. And while this slowdown could hurt their
• 5:34
  Speaker 2: valuation in the short term, there may be something to
• 5:37
  Speaker 2: it for Anthropic. Stricter safety rules cost money. Money only
• 5:40
  Speaker 2: Anthropic and OpenAI can really afford. And that, Jazzy Boy,
• 5:43
  Speaker 2: is a classic case of regulatory capture. So what is
• 5:46
  Speaker 2: the key learning here?
• 5:47
  Speaker 1: Sometimes companies asking for tougher rules are also the companies
• 5:50
  Speaker 1: best equipped to handle those rules.
• 5:52
  Speaker 2: Regulatory capture is when industry leaders shape the rules that
• 5:55
  Speaker 2: are meant to restrain the whole industry.
• 5:58
  Speaker 1: You see, Jazzy Boy, it definitely puts more costs on
• 6:00
  Speaker 1: all businesses, but that hurts less when you're valued at
• 6:02
  Speaker 1: more than a trillion dollars.
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  Speaker 2: Yep, those compliance costs hit a tiny AI startup with
• 6:06
  Speaker 2: three engineers and a dream a lot harder.
• 6:08
  Speaker 1: So, Jazzy Boy, some experts think that these tougher standards
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  Speaker 1: could actually entrench leaders like OpenAI and Anthropic.
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  Speaker 2: For example, B-Man, in 2009, Philip Morris, the cigarette manufacturer,
• 6:18
  Speaker 2: owned 50% of all cigarettes sold at the time. They
• 6:20
  Speaker 2: supported stricter regulation on cigarettes.
• 6:22
  Speaker 1: And the industry was a little confused.
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  Speaker 2: But the regulation banned sponsorship and colour ads and free giveaways.
• 6:28
  Speaker 2: So tougher rules could make it harder for challengers to, well, challenge. Yep.
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  Speaker 2: And while LLMs aren't quite cigarettes, the business lesson is
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  Speaker 2: the same.
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  Speaker 1: Tougher rules can be good for an industry, but they
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  Speaker 1: can also make it much harder for the little guys
• 6:40
  Speaker 1: and gals to compete.
• 6:41
  Speaker 2: Flux Fam, if you haven't heard the term career minimalism,
• 6:44
  Speaker 2: then this one is for you. A new generation of
• 6:46
  Speaker 2: employees pursuing joy over climbing career ladders. So make sure
• 6:50
  Speaker 2: to download the Flux app and check it out.
• 6:51
  Speaker 1: Thanks for listening and we'll see you on Friday.