If you google Roger Corbett Mr Woolworths ABC you will come across a Sunday profile interview with him, that was held last year.

In this interview, he admits that if there was demand for it and it was legal, he would be quite content to sell guns in Woolworths.

In the same interview, he says that in many of the establishments they had purchased, they had phased out sexual overtones, such as topless barmaids.

He has left Woolworths now, to become a board member of Wal Mart - the world's largest corporation. In the ABC interview, he admits to admiring Wal Mart, and adopting their methods.

Wal Mart have become famed for undercutting their employees, and having a zero tolerance approach to unions. Those who talk about forming unions have been sacked.
One store was even shut down when it looked like a union might form.

This idea of giving farmers a day's profit is of course, laudable. But doesn't the fact that this company, which has made life so tough for farmers, can afford to just give away that much money, indicate that they are making a profit at the direct expense of their suppliers - suppliers who they now give charity to?

I welcome the questioning of the motives of Woolworths, in light of the tactics that the supermarkets employ in driving down the prices that the farmers receive, particularly fresh produce farmers who have little choice but to accept the price that they are offered.

However, dont use this as an excuse to boycott Woolworths on its "farmers day" on 23 January. Whilst the offer it is making doesnt excuse its market behaviour, what it is offering is better than nothing. One can only hope that Coles will feel compelled to follow suit with a similar offering.

Please also be careful not to mislead the public with your references to the CWA being propped up by government support - drought aid. This money has not gone to CWA coffers, it has been given to them to administer the provision of support for basic household bills for farming families. This is being decently administered and mostly is being received by those in genuine need (as with any hand-out, there are some that manage to get their hands on it that dont truly deserve it, but dont let this detract from the thousands of families that are worthy of help).

The drought and the devestating impact that it is having on farms, businesses and families has mostly dropped out of the news. Just because we are not hearing so much about it, doesnt mean that it is not happening. In some areas of NSW, Christmas saw the 5th poor year in a row, which was a devestating blow, both financially and emotionally.

Mr Corbett's business CV was no doubt written by himself. I can distinctly remember Mr Corbett promising cheap petrol but it never happened. The measure of Mr Corbett's success should not be gauged by 'best practice' modules and happy smiling staff. Mr Corbett can only boast success at the helm of Woolworths if he introduced the shopping cart that followed the shopper's commands. I have yet to encounter a shopping cart that goes where you want it to.

Showering money on our country friends will not buy you a good reputation. Mr Corbett, I give you an 'F'.

The Lord giveth and the Lord taketh away.

Blessed be the name of the Lord.

It is not widely understood that the big chain's market dominance has been handed to them on a platter by our own government planners. We have one of the most urbanised populations in the developed world as each state has attempted to pursue the development objectives of a unitary state. So each government has concentrated growth, jobs and capital in each state capital.

This lack of even distribution in growth has ensured that new housing has not taken the form of one new street on the edges of a few hundred towns but, rather, entire new suburbs on greenfield sites on the edge of the metropolis.

This made the planners and politicians happy because they could have lots of grand openings and photo ops of big ticket infrastructure. It made them feel important and appear to be doing their job.

The problem was that only the large chains could realistically get access to the decision making processes and capital needed to build the new shopping centres. In fact, it gave them such control over the developments that they were effectively being subsidised by the rents paid by the small players.

This has meant that the only places the major chains are not dominant is in the small country towns where there is no opportunity for some new mega-mall to capture the existing customer base of the local traders.

The only way to fix this problem, short of anti-trust break up of the majors, is to decentralise government and the economic growth that follows so a higher proportion of growth is of an incremental nature that existing traders can service.

We are already paying for our failure to devolve state powers to regional governments. How bad does it need to get before we act?

There is an easy way for State and local governments to overtake the Federal Government's sell-out.

We have to discourage customers from this "one-stop" form of shopping, owned by the same huge company.

There is little we can do with business deregulation and so many free trade deals.

More Independents should run for the next Federal Parliament thinking of their own people's wellbeing.

One thing legislatures can do, without crossing business deals and FTAs, is ban the car parks. They are bad for Co2 emissions anyway.

Yeah, I lived in Dallas once and saw Wal Mart. You can buy semi automatic guns there easy. No questions asked. You can also get prescriptions there. Junkies delight, no questions asked.

Not many Chemist shops in Texas either. That will be next: they'll deregulate prescription standards, Woolworths and Wal Mart (Australia) will have the lot.

Where does that leave small business?

We can of course be mindful that the Americans are very unhappy with their situation. It is not that difficult to stop this "one stop" shopping thing. Block supply to the customer and and the demand goes due to inconvenience.

No one would go the the big supermarket chains if they can't park their cars. In this day and age, we should be all catching buses and trains anyway.

Before you know it, there will be a demand for smaller green grocers again because they are closer to home, as the other places no longer have parking. We could have our villages back, and when you shop, people may even remember your name.

The employees of my local-small-township grocery store do their own weekly shop at Woolworths some 15km away. Why? Because their bill is about 20% less, the choice is much greater, and a lot of the stuff is fresher. There are upsides to supermarkets alongside the problems they create in their procurement methods.

I would like to see honest facts and figures about the relative percentages of price that go to the producers, transporters, and the wholesale/retail end of distribution. My guess is that more than a half of what something costs goes towards distribution. I am not sure there is a lot to be gained by insisting on a less efficient system of distribution such as thousands of street corner shops.

We need to curb sharp and destructive procurement practices, but making everything cost 20% more to the consumer will not solve the problems.

The Big Supermarkets will eventually have the power of oil companies.They force small specialised competitors from the market by selling selected lines at a loss,and subsidise these selected lines with the profits from others.It only takes a few months to send a small green grocer broke.

Then they use their buying power to dictate to farmers and other suppliers the wholesale price.Small producers just go broke.

When they have eliminated all the small competitors,they simply jack the price under the ruse of competition.What we will really have then is a cartel,who have an unstated agreement that prices should not fall below a certain level.The customer is then screwed.

Competition policy like many Govt initiatives is doing the exact opposite.Now these big companies like Coles and Wollies have so much power,that Govts dare not criticise them.

What the small farmers should do is form a co-operative and have a string of retail outlets in the cities.They then can compete with the big sharks and enjoy much greater margins themselves.Some I've spoken to have said it is just too hard.Well just find some ex Coles/Wollies executives who have all the knowledge and start with one small step.Then we all will benefit.

I WON"T SHOP THERE!

Better something than nothing however Woolworths, Westpace et al have departments dedicated to skiting on about how wonderful they all are. It is a concept called ( you guessed it) CORPORATE CULTURE which engages in INCULTUARATION. This is brainwashing of its staff and its customers and the wider community.

A way forward and to lessen the effects of big companies and the drought is to be found in the current policies and programmes developed by Pat Byrne and Jim Manwaring and a team of Australian economists, famrers and manufacturers who contribute to the National Civic Council. View their website ; join with them and make a difference. The outlook is traditional Catholic social doctrine in theory and practice:

http://www.newsweekly.com.au/

Better something than nothing however Woolworths, Westpace et al have departments dedicated to skiting on about how wonderful they all are. It is a concept called ( you guessed it) CORPORATE CULTURE which engages in INCULTURATION. This is brainwashing of its staff and its customers and the wider community.

A way forward, and to lessen the effects of big companies and the drought, is to be found in the current policies and programmes developed by Pat Byrne and Jim Manwaring and a team of Australian economists, famrers and manufacturers who contribute to the National Civic Council. View their website ; join with them and make a difference. The outlook is traditional Catholic social doctrine in theory and practice:

http://www.newsweekly.com.au/

I like the idea from Arjay re-farmer's cooperatives.

I was only half serious about the parking idea, but I think you got my point.

Farmer's cooperatives could be assisted by local government in providing land or real estate for co op markets and networks to organise the co ops.

I'm sure some from the CWA, church groups, and some and apprentices or on centrelink payments would be willing to either volunteer or help out for with some kind of voucher system or a "top-up" allowance for their assistance.

Farmers and consumers can cut the middle man if we are smart. Imagine cheaper prices and knowing that the farmers are not being ripped off.

Referring back to the original article, I would want anyone to propose an alternative to the arrangement that the author is so critical about. The author listed a number of “problems” but has not offered any practical solutions. The only interpretation of the author’s intention is to regulate the market once again and have prices for daily consumables skyrocketing. The rather blanket and baseless opposition to free trade also makes me uncomfortable. Do some commentators here disagree with the basic tenets of capitalism and return to inefficient modes of trade dominated by artificially created barriers often set by governments? It is a fact that free trade benefit the economy as a whole in general, although there is inevitable wealth redistribution which needs to be cared for in the form of proper transitioning and other social programs.

As with the conflict that the author raised in his questions, in trying to understand WW’s motive in having the charity day, well I do not see a conflict at all. If you accept general capitalism concepts you would have accepted that the bottom line is everyone is generally interested in their own self. I would have interpreted WW’s generosity as a PR stunt for the ultimate aim of a higher profit for shareholders, and higher bonuses for the WW’s management themselves.

Lastly the author asked “how will the issue of profit be determined?”. Answer: Competition.

I always thought the merger of Woolworth:Safeway and Coles:Myers were not in the national interest, simply because of the concentration of buying power and retail selling power into fewer hands.

The decision to allow those mergers, I would remind everyone, were made back in the dark early 1990’s when the amateur team lead the nation.

I am pleased to see Coles:Myer unravel. Unfortunately Woolworth:Safeway is less likely to (it was more a Woolies takeover anyway, most of the Safeway upper echelons management separating shortly after the “merger”).

I would like to see greater competition in retailing and in buying.
Such competition would balance the hold which too few retail chains exercise on the producers and the consumers. That is why we have ACCC.

Farmers have had co-ops for decades but that didn't stop the chains playing one dairy co-op off against the other in the recent dairy deregulation.

But to use dairy as an example, the real curb on competition is posed by government regulation. Under the guise of health regulations, dairymen are prohibited from selling unpasteurised milk directly to customers who actually prefer it. In Qld this went so far as to outlaw the selling of shares in a single cow so the shareholders could take their dividends as raw milk.

In most cases there were no health issues because the buyers were just up the road and obtained their milk fresh each day. But this is the sort of BS that comes with big centralised government.

Big centralised government produces big centralised populations that produce big centralised business monopolies. Yet, we have a competition model that only seems to recognise the economies of scale. It simply does not comprehend the possibility of diseconomies of scale.

And as long as the diseconomies of big government, big cities and big business can be excluded from the cost/benefit analysis then there will be a continuation of concentration.

The big chains can sell cheaper than individual operators because the chains have their rent subsidised by other shops in the mall. They have their social obligations met by the new suburban residents, and they have their broader infrastructure costs met by the wider community. But they are a symptom of a government structural problem and we won't fix one without fixing both. New regional states will not only spread the benefits of competirion but also reduce the diseconomies of scale.

Anyone who believes that Woolworths is helping farmers is sadly mistaken. I used to spend substantial time in managers' offices, picking up cash, with my security company, and overheard what they think of farmers, and their not being worth feeding. They used to tell me, farmers had to be screwed by Woolworths - orders from the top.

Note: They picked a Tuesday - the slowest day of the week.

Slow day = low profit.

Low profit = less to donate.

Donations = plenty of free publicity for Woolworths.

Don't be fooled by multi-nationals.

Woolworths have done their math. They know people will be foolish enough to fall for this stunt.

Woolworths have never given anything away.

I know two email addresses appear on the webpage - obviously the 'Promo Boys'?

But, you send an email through their 'Contact Us' on their site, as it will not permit you send an email unless you can enter the "Store Near You" - which it won't allow you to type in! Very cunning people!!

In my younger and more vulnerable years, I used to work for a Woolies related bottle shop. I was exploited, along with most of the staff at the store.

That year, I met Roger Corbet, who dismissed my concerns out of hand. I guess he had multi-million dollar profits to make. I now refuse to shop at Wollies, or anyu of its affiliates.

The fact that Wollies is serving to undercut farmers should come as no surprise. After all, it is enshrined in law that the company must serve the best interests of its share-holders.

What can be done? I attempt to buy food through farm markets as much as possible, and my parents, who live in a farming area on the NSW mid-north coast, are heavily involved in the local co-op. However, this is only tinkering around the edges. While there are obvious bennefits in "free" markets and competition, such an econonomic model has led to the duopoly we have at the moment. This is a dramatic failure of the "free" market system currently in place.

I fear that some sort of government regulation, perhaps in the percentage of return to food growers for their produce. I'm not sure of the exact course of action to take here, but thanks to this article, I'll start thinking about it.

Hi Allan,
I have just finished reading your article re Woolworths the Farmers Friend.
As a member of the Maleny Public and an active member of the confrontation and continuing boycott I am delighted everytime I see an article exposing Woolworths in its true colors. Pity the ladies of the CWA cant see it also, I suspect it is a function of age as much as anything else (ment with kindness).

As I read the article and noted your comments about Rodgers devotion to chrisitanity I wondered if there might be a possiblity of building on this point and targeting a few of the Archbishops and questioning their tolerance of corporate behaviour and perhaps aligning this with the previous sex and pedophile behaviours which where swept under the carpet at the same time.

How different is their acceptance of the behaviour of a significant memeber of the flock using corporate power to rape and pilage the rest of the country.

I believe their is no difference the churches condone it via their inaction......

Whaddya reckon the chances might be for a skilled journalist to achieve this?

Everyone should make an effort to do their shopping at woolies on tuesday. PR or otherwise there are many families struggling through drought. With farmers declining terms of trade it would be nice for those benefiting to give something back. Those cynical of Tuesday being a slow day should endevour to make it a busy one at woolies expense.
I'm not sure where all the margins are but the farmer is lucky if they get 20% of the retail price. Taking beef for example the farmer grows his animal for a year or more and gets $4/kg then within the next few days it retails for $20.

Those cynical of Tuesday being a slow day should endevour to make it a busy one at woolies expense

Well I see it as a win-win situation, so can't see a problem with it!

The CWA are not exactly a mob of rogues, so most of the money should
land up with needy farming families. Woolworths know that their
corporate image matters, they could easily throw the same money
at some rich advertising agency in Sydney. This way, the money
goes to a better cause!

Its not all gloom and doom about supermarkets either. Clearly
consumers are voting with their wallets, to achieve lower prices.
Thats their choice. Few supermarket chains own a lot of real estate
these days, you'll find that Westfield and other LPTs own all that.

Alot of the time farmers don't deal with supermarkets directly at
all, but with various supply chains. Milk for instance, goes
through large multinationals. I remember once hearing that milk
would increase by 5c, to pay growers more. When the truth came
out, 0.5c went to farmers, the other 4.5c went to milk companies.
I see that Woolies realise that they do need farmers to supply
milk, so have insisted that they are prepared to pay 3c more a litre,
as long as it goes directly to farmers and is not skimmed off by
the milk multi nationals.

Lastly, who owns Woolworths? I'd be surprised if the top 20 shareholders,
is not loaded with super funds. Those super funds
are owned by you all, who have superannutation. They compete with
one another to increase your earnings, so push CEOs to the limit.
If a CEO does not keep increasing profits, out the door he goes.

So the whole thing is like a dog chasing its tail really.

The discusssion around Woolworths is like trying to tie the hands of an octopus. The list of downright ruthless tactics that are implemented as a result of Woolworths behaviour is growing. In every area of supply and delivery of product they are busy reducing the effectiveness of any competition and reducing their costs by ANY MEANS POSSIBLE.
The reason why this payment to the Farmers via the CWA is a B/S PR tactic is because they have already taken the profits away from the Farmers to begin with. Bananas from Brazil, Cashews from the middle east, fish from the peasants of SE Asia. They placed huge pressure on agricultural supply areas to reduce prices Woolworths have to pay. Resulting in lot/batch feed cattle/pigs/chickens who are fed foodstuffs which are filled with antibiotics and hormones, plus any other rubbish material which puts weight on the animal. To consumers Who largely has little understanding of the implications of these activities to their health. Genetically modified food is another example of methods used to decrease the prices to Woolies. What does it do to health filling your body with hormones and antibiotics?
Either way they have already caused huge numbers of farmers to reduce the selling price of their product below the cost of production forcing the farmer into a loss situation, and if the farmer then tries to sell direct he becomes blacklisted by the buying agents and his market is further reduced.

Rodger Corbet is purely a hired gun, no better or worse than a mercenary going to war to fight the side which pays the most. Our super funds are the organisations who are the major share holders who apply pressure to ensure they make the profits and keep Joe Public investment in order and at the same time being the blood sucker that kills them.
It is a tight but vicious circle. Where is the integrity? Where is the belief in love of fellow man?
And we are he. We vote for the politicians who do not have the courage to make decisions based on equity.
God help us.

Mungo, you seem to have a problem with Woolworths buying "Bananas from Brazil, Cashews from the middle east, fish from the peasants of SE Asia.". This is exactly the type of attitude that keeps those countries poorer than what they should be. What is inherently wrong with Woolworths buying a cheaper product, given that customers on our end are willing to purchase those products?

As for "cattle/pigs/chickens who are fed foodstuffs which are filled with antibiotics and hormones", if this concerns you, don't buy meat there! If enough people do this, trust me, woolies will get the message that people don't want this. But if people are prepared to buy this, don't complain unless you're also going to try and rule out the majority of fast food joints too(or anything else that could conceivably be bad for you). Ultimately, people need to have this choice to make the decisions for themselves.

You also have a problem with profit seeking behaviour, and it's funny you think this way because this is the best way to apportion resources. If you can't make enough money to keep doing whatever occupation you're in, why are you still doing it?(given that there are many others to choose from) Similarly, if farmers/Woolies supermarket competitors can't cut it in the industry then this is a clear indicator that they shouldn't be doing what they're doing.

I'd also like to add here that "integrity" generally means honesty and sincerity, and that Woolworths are not being 'dishonest' at all in bargaining with farmers for their produce. It is not being dishonest to offer a price lesser than what YOU think is 'required by farmers' for their work. So I don't really see where you're coming from when you say "Where is the integrity?".

Yabby can't see the problem of the duopoly having so much power over farmers. He is not a farmer.

He assumes that we all have shares in these operations that control the supermarkets. We don't. My super funds don't.

Then neo-cons bleat on about how we can't go back to standards and regulations as Government regulations are "old fashioned" and so on. They refuse to see that we are not necessarily talking about going back. Besides, it is already impossible and too late to do so. We don't have Democracy any more. We have Oligarchy that pretends to be democracy.

A standard under Oligarchy involves numbers and shares, not people. One wonders if upon faces are the numbers: 666 rendering people cattle: not humans. We are ruled by the 7 deadly sins. Howard forces: 1. Lust: advertising is based on sex hunger 2.Gluttony: the epidemic of obesity 3.Greed/Avarice: ruthless gluttony and greed above all 4.Sloth/Laziness: too lazy to shop around: prefer convenience 5. Wrath/Anger: discriminatory offenses and security obsession 6. Envy: facilitates status fatigue and obsessive hunger 7. Vanity and narcissism, caused Lucifer to be struck to hell as Satan.

Yabby has no problem with that.
Global warming is hell.

saintfletcher: "Yabby can't see the problem of the duopoly having so much power over farmers. He is not a farmer."

Yup. Got it in one there mate. He admits that he's only a hobby farmer, yet he seems to believe that he has all the answers to all the problems facing the rural sector (i.e. open slather 'guest' labour). Mind you, he seems like a good bloke and I often agree with him on other issues :)

I'm not a farmer either, but I live in the bush and my business depends directly on farmers, their employees, and those engaged in associated value-adding industries (e.g. meat processing). In a pleasing recent development in my district, we've just seen the opening of a large IGA (independent franchise) supermarket in the main town, who have an explicit policy of sourcing local produce where possible.

Needless to say, this goes down extremely well with the locals - to the extent that Woollies are hurting and have lifted their game somewhat.

"He assumes that we all have shares in these operations that control the supermarkets. We don't. My super funds don't."

Umm SF, most Aussies have super and most super funds have shares in
either Woolies, Coles, IGA or all three. Aldi, which is snapping
at the heels of the others, is the only privately owned one.

Yup, I am a hobby farmer, as I don't depend on farming for a living
anymore. I got wise, owning shares in other industries is far more
profitable then farming :) But I have been in agriculture all
my life and understand the issues. A couple of thousand sheep
is considered a hobby farm over here in the West, but perhaps
not in the East.

Fact is that Woolies and Coles are not those paying the lowest
prices for lambs. They generally buy at the premium end of the
market. Its large meat processors trying to send other meat
processors broke by dumping on their international markets,
buying as cheap as they can, that is our problem. Our farmers
should take a leaf out of NZ farmers books and pay more attention
to the value adding of their product. Fonterra, a major milk
processor in Aus, is in fact owned by Kiwi farmers.

People are free to choose. If you don't want hormone and antibiotic
loaded meat, so pay a bit more and buy free range. I certainly
do and all my lambs are free range and happy lambs. Free range
pig production is also catching on.

Lastly, farmers markets are catching on fast. They avoid the
whole marketing chain we have and are popping up everywhere.
They are a great place for smaller farmers to market their
products directly to consumers.

Market based initiatives are more efficient than command and control legislation.

The Wal-mart thing has been played out all across America which still has a huge number of small towns from coast to coast. Wal-mart is terrible to work for but they never seem to have trouble finding workers. Not unlike what happens here with casual workers, most of the Wal-mart people work for a few hours a day and / or do not work a full week. Mums, teenagers, students, over educated and the semi-retired welcome the positions.

But small town American shops and shops and shops at Wal-mart. Why? As others have pointed out, many people will choose to buy for less -- self interest reigns in other words. My son recently visited the USA for 9 months and said the inside of a Wal-mart is identical in appearance to our Big W.

Handguns are not legally sold on a no questions asked basis any where in the USA. Forms are filled in guaranteed. The USA has enough firearm legislation to fill an Olympic swimming pool. Google the Brady Bill.

Pushing dairy farmers out of business by having the buyer dictate the price is simply a variation of a corporate take over. When Woolies and Coles control the entire supply chain capitalism will present an opportunity for the small player

I have a lot of sympathy for farmers but they have historically failed to practise marketing strategies. The ones who do have a future -- watch Land Line. My best mate & farmer made more money dealing futures than raising sheep in 1979, not much has changed.

Market based initiatives are more efficient than command and control legislation.

The Wal-mart thing has been played out all across America which still has a huge number of small towns from coast to coast. Wal-mart are terrible to work for but they never seem to have trouble finding workers. Not unlike what happens here with casual workers, most of the Wal-mart people work for a few hours a day and / or do not work a full week. Mums, teenagers, students, over educated and the semi-retired welcome the positions.

But small town American shops and shops and shops at Wal-mart. Why? As others have pointed out, many people will choose to buy for less -- self interest reigns in other words. My son recently visited the USA for 9 months and said the inside of a Wal-mart is identical in appearance to our Big W.

Handguns are not legally sold on a no questions asked basis any where in the USA. Forms are filled in guaranteed. The USA has enough firearm legislation to fill an Olympic swimming pool. Google the Brady Bill.

Pushing dairy farmers out of business by having the buyer dictate the price is simply a variation of a corporate take over. When Woolies and Coles contol the entire supply chain capitalism will present an opportunity for the small player

I have a lot of sympathy for farmers but they have historically failed to practise marketing strategies. The ones who do have a future -- watch Land Line. My best mate & farmer made more money dealing futures than raising sheep in 1979, not much has changed.

Woolworth’s have kept food prices low and must deserve some accolade for this. I find it obscene however that Coca Cola can be sold cheaper than water and the junk food brands such as Arnott’s, Nestles, Kellogg’s etc. occupy so much shelf space while it hard to find bulk whole food such as pulses and grains. I think it would be helpful if Woolworth’s and Coles reduced the shelf area for those huge boxes of air and fluffed junk food marketed by Kellogg’s etc.
Dialogue with the CWA about some of the Woolworth’s marketing strategies would be more constructive than a cash handover. Most money sent to drought relief does not reach the bottom of the barrel and wets the sides a bit by being soaked up by the better-informed or less deserving.

Hi Volition. Dont ya love the stimulation :)If our local farmers are provided with a level playing field to compete with O/S farmers then I would perhaps have less problem. However just ask the peanut growers in Kingaroy about the legislations that they have to contend with in the process of producing their product and you will see that the same is not true for the farmers of Brazil. The quality standards that Australian Farmers have to meet is far greater than overseas farmers.
Re Antibiotics and Hormones, Yes I would have majoir issues with fast food outlets and I dont buy meat or anything at woolies, however You I and all the other respondants to this forum I would venture to suggest are probably better educated than mainstream average mum who buys the household food, it is not you or us it is the main stream majority which are being used and their is a duty of care for our Governments to ensure that the products which are offered are at least fit for human consumption.
You have a bent view of profit generation perhaps like manny othe greedy people who think that all growth is positive. Like how many people can you fit on this planet, how much do you need to make, do you think everyone SHOULD make the income you make. Very selfish and narrow sighted.
Integrity, isnt it great. Integrity does not mean honesty or sincerity however it could include those points. Integrity is a "consistent set of values" a bit like Sunday Christians, change the values when it suits you. Like Rodger claiming to be a Christian and operating behind the shield of the corporation and doing so with out responsibility for his actions.

The federal govt is still sitting on a report about the price disparity between what the farmer gets and what the produce is sold for.

A simple check of the produce market prices will show how much of a gap there is between what the farmer gets and what the consumer pays.

I was dismayed that in this article there was no mention of the ways in which the Howard govt refuses to make the report public.

Instead of legislating a fair deal, they support the top end of town and proposed a 'voluntary code of practice'.

Woolies and Coles are just exploiting the oportunity that John Howard and his accomplices create.

The figures on price disparity are in fact quite public. We also
know a great deal about final profit margins etc. Woolies
work on around 4%, Coles on around 3%, its commonly discussed in
the financial press. On some lines they work higher, others lower.
Perishable goods, where alot of stuff is thrown out, usually has
higher margins.

There was an interesting article about wine exports in the Weekend
Australian. More and more of our wine is being exported in bulk
22'000 litre bulk container tanks, for 50c-1$ a litre. By the
time they bottle it, label it, pay tax, distribute it, it'll cost
consumers overseas about 7.50 a litre.

Fact is we have built these expensive supply chains, where everything
along the line and everyone involved, costs money. Wholesalers and
other middlemen, rents, insurances, freight, wages, various
Govt taxes, rules to be complied with, they all cost money.

Farmers are right on the bottom of this chain and are basically
price takers. So by the time everyone else has taken their share,
there is often not much left. Even if farmers gave away their
produce for nothing, things like meat would still be expensive.

A loaf of bread contains a few cents worth of wheat. Milk is worth
maybe 30c to the grower. Lamb 3$ a kg if he is lucky, etc. etc.
Everyone simply passes their costs on, in those supply chains,
except for farmers, who can't. Thats why owning bank shares
or owning shares in Woolies, is far more profitable then farming :)

Yabby,
Yup, I am a hobby farmer, as I don't depend on farming for a living
anymore. I got wise, owning shares in other industries is far more
profitable then farming :)

Perhaps you were not doing it well.

Rojo, hehe good point! On the other hand it also pays
to stand back and look at the figures.

Woolies and say Westpac both traded for around 3$ a share
in the early 90s. The Woolies dividend was 12c a year fully
franked. Today the share price is around 23.50, with a
60c ff dividend. Westpac has gone from 3$ to 24$, with
a 1.20 dividend, fully franked.

3$ invested in farmland in this district in the early 90s
would now be worth 4.50. This last season was a bit of
a write off for most, the season before that was a good
one. Last I saw, returns from farming averaged around
8%. 1% was from farming the land, 7% from increase in
land prices.

Those who charged in and bought more and more land,
now find themselves stressed out from more and more
work and little labour to do it with. Many farm kids
don't want the stress their parents had and are going
mining and other careers.

So those who sat back, saved their pennies and bought
a few Westpac and Woolies shares, have turned out to
be the smart ones :)

So I'd say what will happen is that eventually the
super funds with their bulging wallets will land
up owning alot of farmland one day.

You made a useful point Yabby, probably without realizing it.

>>...final profit margins etc. Woolies work on around 4%, Coles on around 3%, its commonly discussed in the financial press. On some lines they work higher, others lower. Perishable goods, where a lot of stuff is thrown out, usually has higher margins.<<

Wastage of course accounts for some of the price disparity between the "farmer's gate" and the supermarket checkout. If you buy a dozen pallets of strawberries and only half of them make it to the checkout, you have effectively doubled the wholesale purchase price.

And I have to take issue with the glibness of:

>>Fact is we have built these expensive supply chains, where everything along the line and everyone involved, costs money. Wholesalers and other middlemen, rents, insurances, freight, wages, various Govt taxes, rules to be complied with, they all cost money.<<

Leaving aside the tax aspect, every aspect of a supermarket's supply chain is optimized to the nth degree. Far from being "expensive", they represent the cheapest way known today to shift product from where it is grown to where it is sold to the consumer. Tomorrow, it will be optimized further, and even more the day after that.

No-one, least of all a major retailer, loads a single cent into the supply chain that isn't absolutely 100% necessary.

Businesses only survive by paying for only those resources that are absolutely necessary in order to generate revenue and profit.

Only government departments pay for stuff they don't need.

Hi Mungo, I guess our opinions vary greatly but I'll give you my take on some stuff anyway.

"If our local farmers are provided with a level playing field to compete with O/S farmers then I would perhaps have less problem." - Me too

"Yes I would have major issues with fast food outlets" - While I don't think it is good(for their own health) that people stuff themselves silly with unhealthy food, I think that the government can't play nanny to everything that people do. The government can't go around stopping people from sitting at home watching TV all day, and it can't go around stopping people from doing things that are 'bad for them', example going out and buying a new TV that they can't really afford. To be the fairest we possibly can, we have to allow people to do what they want.

"You have a bent view of profit generation" - not at all, I have a rational one :P Earning money alone is not a bad thing to do. In fact, it reflects how well you serve your community because that's how highly they prize your services. It's how you use your money that matters. "it is to everyone's self-interest to maximize his monetary income on the market. But this maximum income can then be used for "selfish" or for "altruistic" ends." - quoted from Ten Ethical Objections to the Market Economy http://www.mises.org/story/1469 - It's quite a good read I'd recommend it to anyone with queries about 'those evil capitalists'.

Alright then, I concede that integrity is a consistent set of values, but I don't feel that businesses/consumers should be made to pay any sort of 'living wage' or some arbitrarily set notion of "enough money" to live on. It is not a value to 'pay fairly' and it's impossible to set a 'fair' wage/price for anything. All we have is the price that demand/supply gives us. After all, if you don't like an exchange that is offered to you, you DO have the option of refusing.

Yabby, I was being a little cheeky, sorry. Land values in my area have trebled since 1990, and water values 5 times. Most would expect a 5-8% return on capital. Drought years excepted, made up for in "bumper" years.
But you are correct in saying these assets still aren't keeping up with some share prices. So far. The world has gone through an agricultural revolution since WWII and more so since the sixties. This led to oversupply and depressed prices. Conversion of feedstocks to energy seems to be changing some of the demand dynamics. Hold on for the ride, ag has some catching up to do.

"Leaving aside the tax aspect, every aspect of a supermarket's supply chain is optimized to the nth degree."

Pericles, you are of course correct,from an individual business
point of view. Efficient supply chains within a given system, are
the way to go as a win-win for all. My statement was meant more in
terms of our overall situation beyond business.

If I compare business now and 20 years ago, alot has changed.
Business has strived to become more and more efficient. OTOH
Govt has loaded it with more and more paperwork, more and more
red tape of all sorts. More rules and regulations to comply with,
in the end it all costs and somebody has to pay. That has surely
made Australia a more expensive place to do anything involving
high labour content. So that is not where our comparative advantage
can lie, it has to be in other places.

If I look at my shire, my hospital etc, all seem to be spending
much more on administration and all just pass their costs on.
Even Woolies and Coles can pass on these costs, as they both pay
them. Exporters on the other hand, compete with countries which
don't have these costs, so have to swallow them, try to become
even more efficient, or close down. Payroll tax is a typical
expample of what I mean.

Rogo, I think there are quite large differences between WA farming
and farming in the East. You have a larger domestic market. You
also have a more efficient value adding sector, then over here.
Thats why for instance WA farmers have to accept significantly lower
livestock prices overall, then you do.

WA farmers have had to be more focussed on export markets and achieve
productivity gains through volumes of scale, to survive.

Yet another hater of the rural sector and country folk. Hey, maybe we should pursue Keating politics where all farms are stolen by the banks then sold off to multinationals who then close down the farms so produce must be imported. This leading to less jobs, less money remaining in the nation.

The CWA, while it is shrinking from existence, Australia will lose a lot when they have gone for they do a lot of genuine community work.

So what if it's public stunt by Woollies? Are you opposed to the stunts pulled by bands like U2, or is this different?

Volition, I dont have a problem with the concept that making money in itself is not a bad thing. I am more concerned with HOW the money is made. Various posters have talked of allowing market forces to work. The problem is that for market forces to be setting a true and fair price for any item, there needs to be several buyers and several sellers. This ensures true competition. This is where the farmer suffers, as he (she) is just one supplier in a pool of thousands, against basically 2 buyers. Those two buyers therefore have unfair leverage over setting the price, and boy does it show. To further compound the problem, on their retailing front, there are basically 2 suppliers and many purchases, again meaning that they have relative power over setting the price. The forces of market economics just doesnt stand a chance in this environment, and both farmers and consumers are the losers.

To make matters worse for farmers, where they have to compete with imports they are rarely operating on a level playing field. Just as we should be seeking to avoid products made in sweatshops, so should we be avoiding produce from third world countries that have to produce on starvation rations often with dangerous work practices, both for their workers and the environment. If we ARE going to import these foods, we should be requiring that our corporates pay a price for them that reflects the need to consider the welfare of people and of the environment. Yes we would probably pay more for food as a result - I say a study about 12 months ago that showed that we have some of the cheapest food of the western world.

Country Gal, I have some issues with your post:
1. What is a 'fair' price? Can you tell me any kind of objective standard that could be determined? No, because none exist that would be 'fair' to everyone. All we have is the price that the market sets. If the price in the market is not enough for the farmer to live on, then obviously they're in the wrong industry. There is no obligation to offer them more than what they wish to offer, because that would be forcing them to give up private property.
2. "true competition" - The number of people in a market does not determine its 'trueness'. As competition happens, businesses struggle to be the best. There is no real end state, there may be many firms or just one. It is important to note here that there is no "guarantee to be number one", just the opportunity. There is no good reason for people to be complaining that "mum and dad" grocers can't compete against Woolworths/Coles and need protection, it just means that Woolies and Coles do it better. Ultimately, nobody is FORCING consumers to shop at Woolies/Coles, they choose to! Woolies and Coles are just efficient, which explains why there aren't that many other competitors. Even when Woolies and Coles drop their prices to undercut new competitors, this is still acceptable because they're cutting down on their own profit margins to do this, it's not like it doesn't hurt them at all.

Even with your sweatshops argument, those Nike places are actually a step in the right direction, because those people would otherwise have NO job, which is worse! You'd find that as time goes on, conditions would change in those countries as economic growth happens. This growth only happens if you follow your own rational self-interest(buy the goods you actually want, instead of boycotting 3rd world country goods). Us rich countries are keeping them poor with your thinking.

We have no hope of reining in the power of the big corporations as long as they are able to make covert political donations through the various foundations run by both Liberals and Labor - this is nothing less than legalised bribery, and unless decent minded independents gain the balance of power nothing will ever be done about it. We desperately need to amend our corporations law to include social responsibility in the mix, as they do in Germany for example.

I have taken to shopping at Aldi over Coles/Woolies because they seem a much more decent company - perhaps because they are family owned. What we are seeing at C/W is the result of their determination to increase profits by 5% pa come what may - and as our population is not increasing by that much, they do it by screwing the producers here or offshore.

Candide , swapping Aldi for the major supermarkets doesn't necessarily improve the farmer's lot, I'm afraid.

I came across the Aldi phenomenon when I was doing some retail-related work in Germany in the 1980s. Stories aplenty followed them around, some apocryphal, but all interesting.

The early business plan was i) occupy a small corner site in a poor part of town, ii) have a single "up and down" aisle, iii) limit the SKUs held to 499 (if the store manager wanted to stock a different item, he had to drop one of the existing products) and stack the merchandise in their boxes to avoid employing unnecessary bodies. The store had no phone - if the manager wanted to call head office, he did so from the nearest call box. Using his own coins.

All this kept overheads, and therefore prices, as low as possible.

As did their buying strategy.

I was told the tale of a small but ambitious sausage-maker (let's call him Herr Schmidt) who one year had managed to get his product onto Aldi's shelves. He was asked to discuss (with one of the founders, either Karl or Theo - the story is not specific about which it was) whether he wanted to continue the relationship for another year.

Unfortunately, he had had to cut his prices to the bone just to get them onto Aldi's shelves, so top of his list was to ask for a higher price.

Karl (or Theo) led the discussion by praising the product, and suggesting that he could possibly double the quantity the following year... but at a lower price.

Our supplier was in a pickle. He was excited by the prospect of doubling supply, but appalled at the idea of lowering the price. He needed to talk to his processing people, so promised to come back the following day to complete the negotiations.

As he reached the door, a voice came from behind him.

“Herr Schmidt, I think it only fair to tell you that the moment you touch that doorknob, I shall immediately ring your competitor.”

Volition, I have no objections to a market set price, if the market is truly allowed to decide. The problem with the basic duopoly that we have is that two players are allowed to dominate negotiation. Economics 101 teaches very simply that the price is then swayed in favour of the duopoly, rather than being reflective of a number of people competing to both sell and buy. In business valuations we look at a price expected from a sale transaction conducted between a willing and informed buyer and willing and informed seller. The problem in this situation is that the seller is often not willing, but has no other choice. Having one side have the freedom to set terms and hold other market players effectively to ransom, is not an example of free market forces. Nor is having to sell your product alongside others who are free of the market regulation that you are encumbered with. Allow Australian farmers to employ slave labour (or at least only pay a few dollars a week), not provide any leave entitlements or safe working conditions, and let them do as they please to the environment - then you have a true and free market.

Look, I get your point about not boycotting third world products, but how about paying FAIR price for them. Eg, what we'd have to pay for the same Australian product, plus freight. That would give 3rdW countries the chance to achieve economic prosperity, and with means to protect their environment while they do so.

Country Gal, it doesn't matter that the two buyers are in the better position, it is STILL a market. The market is still deciding the price, but you seem to doubt the validity of this process.

"The problem in this situation is that the seller is often not willing, but has no other choice." - The seller obviously was willing to do it if they ended up doing it. They may have WANTED to sell for more, but who wouldn't want to sell their produce for more? I'm sure Woolworths wants to sell it's stuff for more too (assuming we'd all still buy it), are we holding them to ransom?

As for third world products, paying "what we'd have to pay for the same Australian product" isn't a solution. First, the price has to reflect the perceived quality of the good and this is done on price. You're saying people should pay more for the same or inferior good? This truly wouldn't be a market and wouldn't solve anything because this is just inefficient allocation of resources.

Secondly, even if we did start paying them more for the same product, there is no guarantee that things would get better. There is no guarantee that the workers would get paid better, it just means that some of the employers would get to line their pockets with money from our corporations for nothing.

The only way to solve this is to leave it to people's own self-interest(which means 'get out of an industry if you can't compete in it', and generally work to improve your skill set), and as long people from other countries don't boycott them simply because they're "not australian made", we'll see an increase in their living standards. This is the true way to bring them out of poverty.

Hi Volition Pericles, country girl and any one else that is lurking in the background. This thread is obviously one with many aspects. And each of you have very intelligent left brained responses to the siutaions stated, however mostly with mother hood statements.
Where in this picture is there allownaces for care of fellow man, a recognition that some people are born into poverty without the benefit of the great education that you guys have got, where does the buck stop. Do the people with better education and more resources have a duty of care for those less fortunate or not. Or is it always dog eat dog. There seems to be so much justification with intellectual argument as to the righteousness of free market activity, whilct our environment is screwed, our families fall apart, the global population heads towards unsustainable numbers. When are you guys going to use that massive knowledge to help the siuation rather than justify it continuing to be the same to become worse?

A very appropriate Australia Day question, Mungo.

>>Do the people with better education and more resources have a duty of care for those less fortunate or not. Or is it always dog eat dog.<<

I suspect that the immediate gut response is a guilty "I guess we should, really, but where do we start?"

The head then puts in its two cents worth with "heck, I give half of my earnings to the government already, why aren't they doing something?"

Between these two responses lies, I feel, a grain of understanding.

For one thing, there is simply so much suffering in the world that even the Bill Gates Foundation, which has a couple of billion to give away each year, cannot do any more than scratch the surface. I have actually met Patty Stonesifer who is the operational head of the Foundation, and I know her to be a very warm, caring and compassionate person. One of her toughest tasks is dealing with the sheer number of incoming opinions on what her priorities should be. If even she finds it tough handing out Gates' truckloads of moolah, what hope is there for me?

Which automatically leads us to the government. Successive decades of bolstering the welfare state in the pursuit of our votes have led to a situation where most of us believe we have "outsourced" the problem entirely. "No child will go hungry" says Bob, and we all vote for him so that we don't have to worry about it any more. Then he simply tips our taxes into a pit marked "Public Service" and we never see it again.

Nor, unfortunately, do the hungry children.

My personal answer to Mungo's question would probably be yes, I suppose we should try a little harder. But it is really very difficult to know where to start when both the government and the Bill and Melinda Gates Foundation, with their massive resources both human and financial, can make only token improvements.

So I buy my Big Issue and carry on feeling vaguely guilty.

Mungo in response to the duty of care that we have, I believe it is one that should be carried out with as little government intervention as possible. I'd really prefer that we didn't help people through government social security, and rather we helped people through private charities instead. Everyone would be more inclined to help if they weren't already being taxed to the nose by the government though, with the current system they're much more likely to need the money for themselves.

Volition, let me tell you a story. A friend of mine is a moderate size potato grower. He wishes to sell his produce to the local supermarket so he suggests a price. The supermarket then goes to another local supplier and because he is larger, might be willing to accept a lower price. My friend realises that this will turn into a merry-go-round, so he sells his spuds to the other grower at his price and then the supermarket has to buy from the larger grower at a higher price.

My friend then goes to the local farmers' market and sells some of his crop at a higher price again, which strangely enough, (not really) is still about half the supermarket retail price. He feels that he is asking too much, but the customer thinks it is too cheap.

Country Girl is correct, there is definitely such a thing as an unwilling seller.

Well its all ended happily! Woolies got their advertising cheap,
the farmers got 4.8$million, as people did extra shopping, those
farmers who can't buy shoes for little Johnny, can ring the CWA
hotline.

"the global population heads towards unsustainable numbers. When are you guys going to use that massive knowledge to help the siuation rather than justify it continuing to be the same to become worse?"

Mungo, whilst large organisations like the Catholic Church, ban
condoms, ban the snip, ban the pill, encourage people to breed like
rabbits in the third world, no matter what, there is little that
us people can do except protest loudly, which I do! Yup, another
80 million a year are added to the planet. If Aus was wiped out
tomorrow, we would all be replaced in 90 days.

Give every woman on the planet access to family planning I say,
but the Church is far more powerful then I am. In the third world,
where they have much say, they are able to influence Govts in
a huge way, to comply with their agenda. All very sad but true.

I guess more little Catholics, to outbreed the muslims, is perhaps
a reason for all this, although I doubt that they would admit to
that.

Mungo “Do the people with better education and more resources have a duty of care for those less fortunate or not.”

I would agree with volition’s response too.

I think you need to separate commerce and compassion.

I would note the organization of any business or any market place works on the simple notion of supply and demand. The price which adjusts to the point of equilibrium between supply and demand will be lower if the less-fortunate are less able to participate from the demand side (=lower demand for a given supply would cause prices to drop)

However, I think guidance from dearest Margaret Thatcher, font of much great conservative wisdom, is called for.

To quote Margaret

“We want a society where people are free to make choices, to make mistakes, to be generous and compassionate. This is what we mean by a moral society; “

Extending on Margaret’s point, compassion, as expressed through philanthropy, can only be achieved by people who have resources to be philanthropic with.

That is the way in which those with more resources discharge any compassion they feel for those less fortunate.

However, it is a “moral choice” and not a “duty”.

“Duty” in the context you mean it, is a social convention imposed by a self-righteous and rigid social order of class hierarchy. It was discarded along with parlour maids and wing collars.

The alternative to a “free market activity” is a “controlled market activity”.
All attempts to implement “controlled market activity”, where supply and demand are regulated by government, have been miserable failures from Moscow to Havana to Beijing and even the half-arsed solutions of “nationalised industries” in otherwise “market economies” have been discarded for their proven ineptness and inability to produce long term socially beneficial outcomes.

VK3AUU, unless somebody is holding a gun to this person's head and forcing them to make the exchange, they willingly did it. It does not matter that there was only one other person who would buy this product, they still had the option of not trading.

There is no 'set down in stone' number of competitors that a market needs to be able to determine a market price. If there are only 2 big players on the demand side in a market (and all the suppliers can't sustain their business), then so be it, that just means people(the suppliers) need to move to other industries. There is no RIGHT to make a living in whatever industry you choose, only the opportunity.

Hi Guys
Interesting responses. Got ya thinking. Pericles your first post was 31/1/2005 you are highly skilled please dont sell yourself short....
Your response I suppose we should try a little harder. But it is really very difficult to know where to start when both the government and the Bill and Melinda Gates Foundation, can make only token improvements.

So I carry on feeling vaguely guilty.
I realy relate it is a big call and the answer that comes to me is "How big is your world" You are a clever articulate person with great communication skills. How about just getting people to stop and think about the uselessness of the heady comments they post in this forum. Challenge them to think outside the box. You are already an experienced person in this forum well able to have others think outside of their rut. Challenge them. How could you do that? most of the conversations here are circular. Create a new circle dont play in the old one. I am sure you are fully aware of the spin you are given everyday, why continue it?

Volition I agree that governements are a pain but think about your own response, listen to your own heart dont give away the power to an excuse,....You said....Everyone would be more inclined to help if they weren't already being taxed to the nose by the government though, with the current system they're much more likely to need the money for themselves.
This is part of the circular argument dont let it trap you (blame something else it gives you an excuse to not do something.....do they realy need the money? try living in poverty.
Col Rouge you also have been in this forum a very long time and have a huge overview of many topics, Why defend the status quo and get bogged in inane detail. The alternative to a “free market activity” is a “controlled market activity”. Surely there are more than two ends of this discussion and it is not that black and white be creative what could sit in the middle?

Mungo, what I said was based on the notion that people have limited incomes and with the increase in their disposable incomes I don't think it would be unreasonable to suggest that people would give more to private charities. Especially if they knew the government wasn't going to do anything(even though the government's solutions now aren't exactly great, but it allows people to sleep in their beds at night so hey we're all happy right?).

You claim that I'm using this as an excuse to get out of having to give money, but I think that charge is actually more suited to somebody who is FOR government intervention in the matter. "Oh the government is already doing something, taxing the people who earn more, so I don't have to bother". So your appeal to the heart strings doesn't really work here, it's actually MORE reflective of the idea of charity if people give it voluntarily. What kind of charity is it if it is forced? It'd be nice if people were willing to give money to people who needed help, but there is no obligation(under a free market), nor should there be.

As for the idea of a semi-controlled market, this idea isn't exactly new, but it still means government involvement so it is at least controlled to some extent. This is also forgetting about the problem of coming up with a way to 'only semi' control the market in a fair manner, as well as the problem distortion(unavoidable) to the market it would cause.

Volition, why do large corporate mergers and buy-outs require ACCC approval - surely there is a market place no matter if there is only one or two players on either side??

Look, I am a firm supporter of business, and the need for business to make money. But I also have a hefty streak balance, in that continued growth and corporate greed at the expense of all else are a sure way to lead to our downfall eventually. Corporations (and people) have a responsibility to those that rely on them, and to the environment. This is my problem with using many commodities from third world countries - they are often produced at the expense of the environment and to the long-term detriment of the world. God, I sound like a rabid greenie (I'm not though - you'll have to take my word on that)! But we have learnt some tough lessons the hard way in Australia about how the country stands up to farming at different intensities. We should be enabling countries that are behind ours in development, to create their industries without doing the damage that we have inflicted in this country. I support the idea of this happening through commerce, rather than by charities or govt handouts (the most inefficient way of getting anything). But for this to happen, there must be fair markets. I know you dont seem to like this term Volition, but it means markets where there is not a dominant player distorting the supply-demand pull. Does this mean that we will pay more for everything? Yep! But we get most things too cheap now. Paying below a products fair value will only turn around to bite you on the arse in the long term.

Country Gal,"corporate mergers and buy-outs require ACCC approval" - you've actually hit onto some laws and policy that I don't agree with. I don't think it's right that a government organisation can rule whether a merger is 'fair' or not, the fundamental reason why the market remains true in any case, is the consumers choice. Nobody forces consumers to purchase the good.

Which is why it would (for examples sake) be OK if one person owned the entire strip of businesses in one given town, because he/she can't force other people to shop there. We would continually find improvements in the way resources are apportioned if this is allowed to go on, but the government (mistakenly) thinks that a strategy of some kind of semi-competition will work just as well.

Country Gal, you still haven't given an arbitrary measure of 'fair value' and I say this because consumers could theoretically argue that any price above zero is an unfair price. There is no such thing as a fair price.

The 'dominant player(s)' you speak of have gotten there by being efficient. It means we all get our groceries the cheapest and freshest this way, or otherwise, somebody else would start up a supermarket chain and compete.

Ah, volition, that shopping in a town scenario depends on the circumstances of the individuals, and how remote the town is. There are indeed many examples of people HAVING to buy from one supplier (or HAVING to supply to one buyer). I notice that you have abstained from arguing any corporate or consumer responsibility to the environment for any the products that you consume come into being.

I have a feeling that you and I will have to agree to disagree. This is because you seem to be unable to realise that capitalism has flaws, the same way as any other economic model (eg communism) has flaws.

A fair price is simply one that reflects the true cost of production as compared to the whole marketplace is prepared to pay (not just the middlemen who ripoff both sides). If you have a reasonable lifestyle (eg you can afford a roof over your head, and to put nourishing food on the table, and medical care), then you should accept that anyone else is entitled to the same basic needs, whether they live here or in India. You should be prepared to pay a price for your consumables, that reflects this. Embedded in this is the need to pay for production is environmentally sensitive. So far I have refrained from the cry of our farmers being the most efficient in the world, because I dont think that you would understand how or why. I have tried instead to limit the argument to economis models. But enough is enough. If you cant pay enough to remunerate an industry that cares for its employees and the environment that sustains it, then you dont deserve to be able to buy that product. Ripping off third world countries at the price of their people and their land to suit your pocket is not the answer.

Country Gal ,"corporate mergers and buy-outs require ACCC approval" - you've actually hit onto some laws and policy that I don't agree with. I don't think it's right that a government organisation can rule whether a merger is 'fair' or not, the fundamental reason why the market remains true in any case, is the consumers choice. Nobody forces consumers to purchase the good.

The role of government, as the elected representative of the population, is to ensure the corrupting influences of market dominance, monopolies and oligopolies are balanced against the needs of the consumer. If one retailed existed for all goods he could, reasonably dictate the margins at which he chose to sell and the prices he chose to buy at.

No one institution is in a position to act as “arbiter of fairness” other than government.

IT is also why government should not operate business, as has been stated frequently by the current federal government in regard to Telstra, simultaneously operating and regulating presents a conflict of interest which is inappropriate to the health of both government and business.

The role of ACCC is a good one and one which should be encouraged. A more easily identified parallel is the activities of the US Federal Trade Commission (ACCC Equivalent in USA) who are actively trying to break Microsoft operating system away from Microsoft applications for similar reasons of an unhealthy market dominance.

OR closer to home, the cement and concrete pricing cartel which operated to fix prices among suppliers of concrete and cement to building projects on the East Coast of Australia in recent years. A clear abuse of market position and one which found the participants convicted following an ACCC investigation.

Your last response to volition “This is because you seem to be unable to realise that capitalism has flaws”

Accepting that capitalism has flaws is the first step. It does not mean we should not try to alleviate the problems which stem from those flaws. ACCC is an example of attempts to do just that and one which can work very well.

Country Gal, capitalism is at least the most consistent system that offers individual freedoms while at the same time promoting economic growth in the best way possible (by setting prices correctly, as opposed to a socialist/communist system which could never set prices correctly). We are never truly economically free in areas where the government steps in, and this freedom is essential for promoting growth.

The problem with a 'reasonable lifestyle' is the subjectivity inherent in this type of thinking. Does a reasonable lifestyle include 'no frills 2L milk' or 'farmers choice 2L milk', or does it mean maybe italian furniture instead of brazilean furniture? Does it mean living near the beach or living inland? Surely you see the problem being raised here?

Col Rouge, ACCC and it's US equivalent serve to 'cut down firms who have gotten too much better than other ones', what kind of crime is this? Regardless of this, it's fallacy to think that free markets necessarily lead to one person owning everything, and these firms should have the freedom to merge and takeover as they wish. (I will add here that I think ACCC should exist for the purpose of stopping false advertising, but not for stopping mergers)

It's interesting you raise the Microsoft example, because that is a good one. MS are NOT a coercive monopoly, they do not force consumers to buy windows, I don't see why MS were ruled against in the IE case, because it's like saying they have to sell a certain product. Markets work in so far as sellers are able to sell what they want, not what the government dictates. There needs to be a willing buyer and seller. "The property rights to Windows and Explorer belongs solely to Microsoft and not to potential buyers, and certainly not to the U.S. Department of Justice." - quoted from http://capitalism.org/faq/antitrust.htm

These companies are being punished for their own 'dominance' (read: efficiency, management and marketing skill), and it's wrong.

"fallacy to think that free markets necessarily lead to one person owning everything"

It is. It's also a fallacy to think that monopolies won't form, given the opportunity.
The same goes for cartels.
You're right in the capitalism is the best market system we have. You're wrong in trying to gloss over its flaws.

Volition, read my post - I defined what a reasonable lifestyle is. The basics. It would be lovely if everyone could afford little luxuries as well, but that's a pipedream. I restate my point that Australian farmers are the most economically efficient in the world, and are among the most environmentally friendly (remember that clean green image that we have, that encourages other countries to buy our exports - that actually comes from somewhere). By default, if we expect out farmers (and businesspeople) to uphold certain standards, then we should expect the same standards to be upheld by any other supplier.

TurnRightThenLeft, a true monopoly is the government, the only entity that can use force or the threat of force to accomplish its goals. Other monopolies are those that have been given the privilege by the government. Show me a monopoly that exists other than these cases. That's right, none exist.

Country Gal, surely you understand that 'the basics' could range from a dodgy old used car all the way up to a Mercedes right? Since when have people been paid what they need anyway? It's up to each person to look after their self-interests. Believe it or not this is the fastest way to create wealth, which is necessary to lift poor people out of poverty. Were it not for socialist/interventionist policies, I severely doubt that the poor would even exist as an identifiable class, the only 'poor people' would be people who choose to be poor.

Regardless of this, you still believe in price setting while at the same time, claiming to support the free market. These are contradictory beliefs, setting a price floor serves to distort the markets.

Not only this, you seem to think that our corporations shouldn't have a say in how their own money is spent, who's to say they mightn't just look elsewhere if the price was raised? Would you be happy if the government forcefully took your money and told you you had to spend it in a certain place(where you saw a cheaper alternative)? No! So why do you advocate it for a corporation? I dunno, maybe because it's not your money.

As for the efficiency of Australian farming, I'm sure we could argue all day about how good/bad/green it is. So I say let the market decide because actions speak louder than words.

Volition:

Microsoft is a prime example of a monopoly.
This is one of the prime reasons why apple's revenue is now primarily generated via devices other than computers, such as the ipod.

Duopolies are plentiful. Witness Coles and Woolworths.

"Since when have people been paid what they need anyway? It's up to each person to look after their self-interests. Believe it or not this is the fastest way to create wealth, which is necessary to lift poor people out of poverty. Were it not for socialist/interventionist policies, I severely doubt that the poor would even exist as an identifiable class, the only 'poor people' would be people who choose to be poor."

If this was the case, then why is it that wealth has been accumulating into fewer hands in recent years?

If this tendency to accumulate wealth into fewer hands is to continue, then surely, in the event of limited resources, the poor will eventually miss out, there is no other conclusion.

"So I say let the market decide because actions speak louder than words."

Your problem there for farmers Volition, is that the market cannot
decide, due to politics, where we are the minority, so get outvoted.

Lets look at drought. The best thing for farmers to do, when the
writing is on the wall as to the season, is to quit stock as
fast as possible. That should not be a problem. Fly in some
meatworkers from say China, run an extra shift in plants etc,
the result would be a win-win for all. But city politics prevents
that happening. So there is less kill space then there are livestock,
prices collapse, farmers try to hang on because of
collapsing prices, next you have starving stock in paddocks.
Next thing you city people dish out drought aid, to deal with
the starving stock.

The problem with farming is that city people want the good bits
from us, cheap and clean food etc, but politics and their numbers
prevent us from being ultra efficient. Yet most of what we sell
is on global markets. So the market won't decide much, politics
will dominate, which is the problem.

Volition “'cut down firms who have gotten too much better than other ones',

You posting seem to quote that statement and ascribe it to one of my posts. Please review your source. I wrote no such thing.

As for “these firms should have the freedom to merge and takeover as they wish.”

Not when their market dominance is such that their effect on trade is a hindrance to trade. A few firms dominating a market from both the supply and demand (as an intermediary step in the supply chain) is against the interest of free trade. Maybe you could justify the typical activities of monopolies, duopolies and cartels which seek to sustain their business with unfair price fixing and preventing new competitors entering a market”.

I know, personally, the US FTC took extensive action against the funeral industry to stop inappropriate cartel activities by funeral directors who were tripling the price of funerals, at will and operating on fixed price schedules in collusion with other funeral directors. The families of the dead were seriously disadvantaged by such practices. Sticking the departed in a shopping bag and dropping them down a rubbish shute is not a viable alternative.

Microsoft’s position of power in the delivery of applications software is largely due to the refusal of Microsoft to release the source code for their operating system, thereby awarding themselves a significant commercial advantage in delivering applications which work across operating systems with other applications.

Microsoft would see the applications software separated from the operating system and run as separate businesses. Alternatives are slowly emerging, Linux, Open Source, Java etc. despite Microsoft. In the meantime, users are forced to accept Microsoft dominance of their PC and the inferior performance of some Microsoft applications because they have limited choice of new products.

The parallel with Telstra is, Telstra “retail” and versus “wholesale network operator” naturally conspires to limit the activities of competition by disadvantaging alternative retail suppliers with aggressive wholesale pricing. The solution, separate the wholesale telephone network supplier from the retail supplier like separating Microsoft operating system Microsoft applications.

Its about market "Balance"

Invest in Woolworth/Safeway. That way when times are lean at your end they support you until the market improves and when the market is doing well it's money in the bank.
Develop a relationship of mutual necessity.

aqvarivs, I know a number of farmers that have done just that. Try to ride on both sides.

Volition, I am not advocating price fixing (although I can see why you might interpret my posts that way). I lived through the removal of the floor price for wool. Not much fun. What I am trying to highlight is that I believe that we have a responsibility to the environment and to all people in the supply chain, to support certain standards, no matter where we source our products from. As Yabby points out, if we were to fly in cheap labour from os to ensure efficient use of available resources, there would be all sorts of outcrys.

As for the govt taking my money and telling me where to spend it - they do. Roughly half my income goes in tax. I have to spend it on all sorts of things I dont think necessary. Given that the corporations pay 20 percentage points less tax than me, I've got problems with them having to deal with a bit more regulation.

TurnLeftThenRight, MS is not a coercive monopoly, because they are not the only seller of Operating Systems and they don’t make you buy it. Anyway, I fail to see how MS have been bad for consumers, think about how much extra productivity the world has experienced because of Windows software.

Who do you think makes a better contribution to the world? A Mother Teresa who hands people bowls of slop every day, so they can barely exist or a genius like Bill Gates who creates a fortune for himself by helping others to create fortunes for themselves?

As for duopolies, there is always the incentive for one to undercut the other and steal market share away from the other. The consumer is the one who benefits from this price war. Besides, there are still other stores like IGA and your standard corner store.

As for wealth accumulating into fewer hands, there is actually a two-sided benefit that we get from the capital owned by others. It’s the source of the supply of goods we buy and the source of demand for our own labour. This means lower prices and higher wages. Even without real wage increase, most still benefit from the fact that we have better technology. Would you rather have surgery in hospital these days or back in the 70’s(where you might say equality was better)?

Col Rouge, about the quote, I didn’t mean to say you said it, I’m just saying it’s almost as though that’s what anti-trust laws are about.

For a good to be exchanged, there must be a willing buyer and seller, and either party should be able to refuse the transaction for whatever reason it wants to. Those funeral directors are under no obligation to offer services at what you might call a low enough price. If people are willing to pay it, what’s the problem?

As for Telstra, I’m not going into that because that actually IS a monopoly that was put into place by the government and didn’t happen via the free market.

For a read about anti-trust: http://www.mises.org/story/394