Woolies must be left out
Terry McCrann
February 27, 2007
Article from: Herald Sun
TERRY McCrann writes: IF IT walks like a duck and quacks like a duck, but its name is Woolworths, it's actually an elephant. About to become the only elephant in the retail china shop.
Under no circumstances can Woolies be allowed to buy any part of the dismembered Coles group. For it to buy one petrol canopy, far less the Target chain, would be unacceptably anti-competitive.
It would help if competition chief Graeme Samuel made this publicly clear. Although I think that's unlikely.
He would probably, sensibly, decline on the basis of not-prejudging the issue.
The bottom line is that the Australian retail landscape is about to undergo its most sweeping structural and ownership change since Coles and Myer merged in the early 1980s.
That created a retail monolith that in retrospect had the potential to be anti-competitive. Indeed subsequent ACCC chairmen said it should never have been waved through.
Ironically, it proved to be the exact opposite. Woolies, David Jones and Harvey Norman would become the successful players on the retail block. Coles Myer was a shambolic mess.
That though is no guide to today. Woolies is even more dominant than Coles Myer ever was. Mostly, because it's a much better-run company.
A major part of that success though is its relentless even ruthless efficiency, both on the sueprmarket floor, the back office and screwing - sorry, dealing with - suppliers.
The other big thing that has changed are the petrol shopper dockets - giving the big two supermarket chains not only even greater shopping power but power over petrol prices as well.
There is absolutely no way that Woolies can be allowed to buy even the tiniest piece of Coles.
The ACCC erred badly some years ago in allowing Woolies to buy big chunks of the former number three chain, WA's Foodland.
It's even more critical now because of the context of Coles's coming dismemberment. In a state of crisis and underperformance which will leave daylight between Woolies and the residual Coles rump.
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