Retailing behemoth Woolworths is one of the biggest commercial advertisers in Australia, so it shouldn’t come as a surprise that they don’t get done over too often in the major newspapers, especially with former CEO Roger Corbett sitting on the Fairfax board.
However, I’m more happy to provide some alternative views to the universal gushing that accompanied yesterday’s 26% jump in annual profit to a record $1.63 billion. Woolworths are a disgrace at so many levels it is difficult to know where to start.
First up, Australia’s biggest poker machine operator continues to mercilessly exploit problem gamblers without batting an eye-lid. Let’s hope they listened to this extraordinarily combative speech that No Pokies senator Nick Xenophon delivered to the pokies industry annual conference last Sunday.
Profits from the hotels division soared 17% but the company won’t even admit that it has more than 11,000 poker machines and the three paragraphs in the results on corporate social responsibility make no mention of problem gamblers losing hundreds of millions playing with this most dangerous product.
Then you have the question of Woolworths brutally refusing to stock branded goods, forcing suppliers to sell through the company’s own house or “select” brand. This tactic is squashing Australian product innovation.
And what about the way Woolworths screws suppliers on payment terms?
It has become the most notorious middle man in Australia and nothing better demonstrates its market power than these two figures on the Woolworths balance sheet:
Inventories: $3.01 billion
Trade and other payables: $4.8 billion
Woolworths has become a virtual supermarket with negative stock of more than $1 billion as it forces suppliers to wait ever-longer for payment, long after the goods have actually been bought by Australian shoppers.
As was outlined to Deborah Cameron on ABC Sydney yesterday, the sheer brutality of Woolworths partly explains why the likes of Japanese brewing giant Kirin are being forced to bulk up and become giants in the dairy industry. They need scale to stand up to Woolworths.
Finally, there’s the Woolies push to launch a company credit card. Surely Australians don’t need any more access to credit?
Not content with being the biggest pokies, fags and grog pusher in the country, Woolies now wants its customers to spend more so they can profit on the debt repayments.
According to Reserve Bank figures, Australians have 14.24 million credit card accounts, owing a record $44.7 billion, for an average of around $3,140 in each account.
Woolies is chasing one million cards over the next five years, suggesting it wants its customers to chalk up more than $3 billion in debt.
Sometimes you have to wonder why it is necessary. Roger Corbett is a member of the Reserve Bank board, and should be best placed to realise that we don’t want more personal debt.
But then he did make his company the biggest pub and pokie machine operator in the country, so sin and debt are of little concern to him.
*Listen to colourful pokies billionaire and Woolies partner Bruce Mathieson call Stephen Mayne a liar on 3AW in 1997.
“three paragraphs in the results on corporate social responsibility make no mention of problem gamblers losing hundreds of millions playing with this most dangerous product.”
The villains they also sell alcohol and cigarettes!
How about people taking personal responsibilty for their own actions. Pokies are legal – should they discard pokies because some have a problem with them;the same could be said of alcohol and cigarettes.
There is more than enough control by governments without adding to the lists of things that are verboten.
In reply to Steve Martin, I agree that the pokies are legal. But 60 years ago, cars were legal that did not have basic seat belts or safety glass to protect drivers or passengers. Only enough victims killed or injured convinced the motor industry and Government that change was needed to reduce the number of victims from avoidable injuries or death. In 2008, the design of pokies may lead quickly to addiction and often financial devastation for the player and their family. Rational decision making is lost. When a 1 cent pokie can accept a $5.00 per spin bet, and accept $100 notes, and large linked jackpots are promoted on the basis that higher bets increase your chances of winning the jackpot, it is little wonder players are drawn quickly into the vortex from which many will not escape with their life in order. Alcohol and cigarettes remain legal but the law prevents serving someone who is drunk, and smoking in public areas etc. No limits apply to how much can be lost to a pokie ! This must be corrected urgently. To gain a good understanding of the crisis, I would suggest you visit http://www.daviidv.com which is a website combining short videos and related webpage links on the pokies crisis. For extra information just on the Woolworths issue in this article, you could go to http://sites.google.com/site/akadaviidv/Home/woolworths-and-pokies . There is a real community problem that left as it is may continue to reach a growing number of the community. For everybody’s sake, this should not be allowed to happen.
Pokies are legal and if you want to blame someone I would look at John Brumby not Woolworths.
They employ 180,000 people and pay better wages than their major competitor. They also give employees a 5 percent discount on their groceries which helps their workers.
They are are not perfect but who is? At least they have been good to their shareholders and employees which is a lot better than a lot of other companies I know of.
Aaah! The things you can do when you have money and can find surety of $1million IN CASE you loose a class action against a multi-million dollar corporation.
Poker machines all have a clause on them that states, “malfunction voids payments”. A gambler may have been using a faulty machine for hours before they find out (usually AFTER they win a large jackpot) that the machine is faulty. With no way to prove they have even used the faulty machine – let alone how much they have spent – their rights to reimbursement of their costs under consumer rights law are effectively voided right along with their rights to collect a jackpot win.
The average gambler whose rights are not upheld by regulators and industry alike, usually doesn’t have the kind of money to pay laywers that stock market investors have. Therefore, gaming machine operators continue to profit at the expense of their customers rights under federal law.
It’s time available, government regulators forced gambling machine operators to introduce mandatory smart technologies so consumers can obtain receipts of their spending (as required under federal tax laws) and to prove how much they have spent where machines are found to be faulty (an all too frequent occurence).
Sue Pinkerton
President of Duty of Care inc
Problem Gambling Research Consultant.
Mob – 0421 846 188