Shane Jones has initiated a furore over a supermarket chain he alleges have used mafia tactics to improve returns to their shareholders. Jones reckons Countdown is extorting money from suppliers by asking for retrospective payments and threatening banishment from its shelves for those who don’t pay up.
The allegation will probably be shown to have some validity.
In one form or another competitive supermarkets have been doing this for years, probably to the distinct advantage of the consumer. To be fair it does keep prices honest though the suppliers are the ones who suffer the slings and arrows of competition.
I’ve had personal experience with this.
In the 1980s I owned the Wairarapa Bacon Company in Carterton. We produced an excellent product using pork from local producers, but supermarkets wouldn’t let us put our merchandise on their shelves unless we actually bought the shelf space. When supermarkets are under the construction phase they will offer shelf space to potential suppliers provided they actually pay for the fit-out. This is, or at least was, particularly applicable to refrigerated shelving as these are costly plant items for supermarkets to install.
The “Big Boys” got in first and back then this was Hutton’s and Kiwi and a small Carterton producer couldn’t make any headway.
On one occasion I did convince Foodstuffs Central division to take our hams steaks on special. We were given six weeks lead-in time and then on a particular week our hams steaks were to be promoted under the Stevlon brand at an extremely competitive price.
Foodstuffs central division covers all their stores from New Plymouth across to Hawkes Bay and down to Wellington.
We worked tirelessly to stockpile the product during the six week lead-in period and waited for the orders to come pouring in. We got one; a modest order from a New World supermarket in Havelock North. All the others bought their “Stevlon” ham steaks off Hutton’s who deviously offered them at the same generous discount we had negotiated.
Supermarkets by now were almost the exclusive purveyors of bacon and ham and without the capital necessary to buy my way into their stores I had to eventually close the factory.
In the light of the Jones allegations there is now a protest circulating through the social media asking consumers to boycott Countdown supermarkets. It seems plausible, but imagine if this caused the demise of the Countdown brand and left the field wide open to Foodstuffs. The jovial Pak’n’Save stick figure wouldn’t have to proclaim that their aim was to save you money and all your grocery prices would go through the roof.
The sudden dislike of Countdown has been boosted by the fact that Progressive Enterprises allegedly recently asked that all New Zealand made products be taken off their shelves in Australia.
A few years ago I visited a small town in Queensland called Melany, inland from coastal Coloundra where Woolworth’s - Countdown’s owners - had just opened a brand new supermarket. Melany is not much smaller than Masterton and had a fast-growing population and yet had only one other supermarket, an IGA store in the middle of the town centre.
Woolworth’s new Melany store however was almost totally bereft of customers and there were signs on fences all over town proclaiming: “we won’t shop there.”
It seems Woolworths had bought the old saleyards at one end of the main street which was next to a stream that housed among other things, Australia’s prized, but rare, platypus. The locals were aghast that Woolworth’s would construct such a supermarket virtually over a creek and protested vigorously to stop the store from being built. Police reinforcements had to be brought in from Brisbane and the situation had got pretty rugged.
Eventually Woolworth’s won their case in the Environment Court and went ahead with the project, but when we were there the carpark was empty.
Some people even pretended to go and shop there, piling up the trolleys with groceries then leaving them unpaid at the checkout. This was known as the “trolley challenge” and protestors right across Australia were reportedly filling Woolworth’s trolleys, leaving them unpaid with notes showing their support for the Melany stand-off.
Locals I spoke to at the time admitted the whole protest was a bit of a sham. The creek, next to the leaching saleyards was hardly pristine. In fact Woolworths had cleaned up the area and had acted impeccably in their treatment of the environment. But to be seen shopping there meant you risked being ostracised by the more militant members of the green community.
I doubt that we will see “we won’t shop there” signs on fences around Masterton. Sanity will eventually prevail and we mustn't forget that Countdown has a substantial investment in the town and a large staff who will be relying on continuing employment.
It would be a bit mean-spirited to let them down.
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