Most shoppers probably know two things about Aldi supermarkets — they are from Germany and they promise "everyday low prices". Few people have any idea of the secretive anti-union empire that lurks behind the Aldi name.
From running their mother's corner shop at the end of World War II, brothers Karl and Theo Albrecht today command the Aldi empire with a US$50 billion turnover and more than 6500 stores worldwide.
The Aldi chain began in 1960, then was split the next year into Karl's Aldi Sud, covering the southern half of Germany, and the younger Theo's Aldi Nord in the north.
Then they moved on to divvy up the world market. While over half the 6500 Aldi stores are in Germany, they can also be found in 13 countries across Europe, the USA and Australia. China is now in their sights.
Karl Albrecht is worth a staggering US $23 billion, making him one the world's top five richest people. Theo Albrecht is only worth around US $3 billion.
Aldi plays its cards very close to its chest. Aldi stores are controlled by a secretive family trust that never publishes financial results. The brothers Albrecht lead totally reclusive lives.
The last interview that either brother granted to the press was in 1971. Theo had just been released from kidnappers who held him for 11 days before a US$2 million ransom was paid.
Theo said, "I am healthy, but of course I am very tired. The whole experience took a lot out of me." That was the last public comment made by either brother.
Aldi sells a small range of goods, very cheaply. You get one choice in one size of just about any product. Around 80% of goods sold in Aldi stores are sold as "home brands" and made by other companies.
Aldi drives unprecedentedly hard bargains with brand-name suppliers. A few years ago it became the first retailers to force breakfast food giant Kellogg's to supply Corn Flakes and other cereals for sale under an Aldi's label.
Aldi go to ridiculous lengths to cut costs — no credit card facilities, refundable deposits for trolleys, pay for plastic bags etc. But where Aldi makes its money is in reduction in labour costs.
Staffing is cut to the bone. Aldi employs small numbers of staff in their stores, all non-unionised. The typical 600-square-metre store will have only three workers — all rushing around madly — in it at any one time.
Most stock is wheeled into the store on pallets — many of which are pre-packed on half pallets at Aldi distribution centres. All staff are multi-skilled and work the checkouts, bring out the pallets, and machine clean the floors.
Aldi employees earn around 20% more an hour than workers in other supermarkets (which Aldi hopes will breed some employee loyalty). But they are employed on flexible-hours part-time contracts and are often only granted minimal pay rises when these expire.
Aldi's low labour costs (2-4% compared with an average of 9% for competitors) means a higher profit margin (3% on turnover compared to the average 1-1.5% for competitors). Good news for the brothers Albrecht.
The brothers don't like anyone standing in the way of adding to their fortune — especially trade unions.
The German union Verdi accuses Aldi Sud of intimidating employees who wish to join a union and suppressing union activity throughout its stores by preventing and undermining the election of legal union works committees.
German employees also endure unwarranted searches of handbags and lockers as well as "house visits" by management after an employee has called in sick or attended a union engagement.
Aldi management in Dublin, Ireland, sacked six young workers in June 2000. Their only "crime" was joining the shop workers union Mandate. Twelve weeks of mass pickets, sympathy protests, boycotts and "dirty shopping" (filling shopping trolleys and leaving them at checkouts without making a purchase) followed.
The strike ended on August 18, 2000 (the day before a planned anti-Aldi European day of action). Aldi agreed to end its victimisation of union members, grant union recognition and acknowledge the young workers' unfair dismissal. Given the options of returning to work alongside scabs or voluntary redundancy, all six chose the latter.
In Australia, Aldi has repeatedly refused to allow National Union of Workers (NUW) organisers to enter its various sites. As all Aldi employees work on the non-union Australian workplace agreements (AWAs), the company claims that NUW organisers have no right of entry.
All Aldi workers are eligible to be — and some are — NUW members. Despite this, the Industrial Relations Commission has twice ruled during the last year that the NUW has no right of entry because AWAs exclude the operation of the relevant award (and therefore forfeit the union's entry rights).
Last month NSW Labor MP Paul Gibson accused Aldi management of telling workers at its Minchinbury warehouse in Sydney that those who joined the NUW put their jobs at risk and threatening those who refused to sign AWAs with being locked out. NUW organisers have vowed to continue efforts to unionise Aldi operations.
Next time you shop at Aldi you can be happy knowing that your money will strengthen a secretive, anti-union retail empire and make a couple of reclusive billionaires just that little bit richer.
From Green Left Weekly, June 2, 2004.
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