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Ryan Bridge: Are supermarket sales really sales? · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The Commerce Commission reckons, we need fewer items on sale
• 0:04
  Speaker 1: at the supermarket. Yes, that means less yoga on special
• 0:08
  Speaker 1: for four ninety nine or year one dollar ninety nine
• 0:11
  Speaker 1: chocolate bar at the checkout. Basically, they want less price
• 0:16
  Speaker 1: yo yoeing. In general, this is counterintuitive. The job of
• 0:20
  Speaker 1: the Commerce Commission, through the Grocery Commissioner, is meant to
• 0:23
  Speaker 1: score us cheaper prices and boost competition. Right, So what
• 0:27
  Speaker 1: the lord's good name is going on here? This morning
• 0:31
  Speaker 1: they've announced they want to change the rules around what
• 0:34
  Speaker 1: the supermarkets can charge the suppliers, so your food stuff's
• 0:39
  Speaker 1: in your woolworst. They purchase about fifteen billion dollars worth
• 0:42
  Speaker 1: of goods from suppliers every year, and when they do this,
• 0:46
  Speaker 1: the suppliers will discount prices buy about five billion dollars
• 0:50
  Speaker 1: a year through rebates, discounts and promotional payments. This ensures
• 0:55
  Speaker 1: that their stock is on sale so that we buy
• 0:58
  Speaker 1: it because everyone loves a bargain. The supermarket Zar says,
• 1:03
  Speaker 1: if you're a new, smaller supermarket chain opening up, you
• 1:06
  Speaker 1: can't compete with that because you don't have the buying
• 1:08
  Speaker 1: power in the economies of scale, So your prices would
• 1:11
  Speaker 1: be higher, you wouldn't be able to compete. Now, this
• 1:13
  Speaker 1: is where I think the Czar takes one of many
• 1:16
  Speaker 1: leaps of faith. They reckon that we consumers are overall
• 1:20
  Speaker 1: worse off because of these specials and discounts. They say,
• 1:25
  Speaker 1: consumers lose out because prices jump around more. This can
• 1:29
  Speaker 1: mean the average price is more expensive and it's harder
• 1:32
  Speaker 1: for consumers to assess the value of products. Well, can't
• 1:35
  Speaker 1: we read the label? They don't offer any evidence this
• 1:39
  Speaker 1: is actually happening, nor do they offer any evidence that
• 1:42
  Speaker 1: a change would make things cheaper. Leap of faith number
• 1:45
  Speaker 1: two is that this saving will be passed on to
• 1:48
  Speaker 1: the consumer via the supermarket. Is there not a flaw
• 1:52
  Speaker 1: in this logic? Does essentially banning discounts really make prices cheaper?
• 1:58
  Speaker 1: If so, by how much much? Five billion dollars? Remember
• 2:03
  Speaker 1: the industry's revenue is twenty five billion dollars a year.
• 2:06
  Speaker 1: If all of the discounts were handed down their chain
• 2:08
  Speaker 1: of command to US shoppers, we're expected to believe general
• 2:12
  Speaker 1: prices would fall by what twenty percent? Remember when they
• 2:16
  Speaker 1: set up the Grocery Commission under Labor, we were told
• 2:19
  Speaker 1: the supermarkets were making excess profits of three hundred and
• 2:22
  Speaker 1: sixty five million dollars a year. So we're well, well
• 2:25
  Speaker 1: and above that now, aren't we. There's a bunch of
• 2:28
  Speaker 1: other changes they've announced as well. Some of the stuff
• 2:31
  Speaker 1: is just proposed, its suggestions, it's voluntary. Some stuff needs
• 2:35
  Speaker 1: consultation and then reviews and twelve months and blah blah
• 2:39
  Speaker 1: blah more reports. By the time this is finished, I
• 2:43
  Speaker 1: will not only have lost the will to shop, but
• 2:46
  Speaker 1: potentially lost the will to live. For more from early
• 2:50
  Speaker 1: edition with Ryan Bridge. Listen live to News Talk set
• 2:53
  Speaker 1: Be from five am weekdays, or follow the podcast on iHeartRadio.