Josh Cullinan calls for state-owned supermarket to reduce prices, break the duopoly

May 14, 2024
RAFFWU members at May Day in Brisbane
Retail and Fast Food Workers' Union members at the May Day rally in Magan-djin/Brisbane. Inset: Josh Cullinan attending the Senate inquiry into supermarket pricing. Photos: Retail and Fast Food Workers' Union/Facebook

Food prices have surged over the past few years while supermarket giants Coles and Woolworths post massive profits. A Senate inquiry, set up in December to examine the “price setting practices and market power” of the two major supermarkets, released its report on May 7.

Retail and Fast Food Workers Union (RAFFWU) secretary Josh Cullinan spoke to Green Left’s Isaac Nellist about the inquiry, price gouging and the union’s campaign for fair wages and conditions for supermarket workers.

What is the Senate Committee on Supermarket Prices and why was it set up?

Politicians generally are disconnected with the lived reality of ordinary people. But the outcry, from the last three to four years, has led to a point where it was undeniable that something had to be done about the price gouging and profiteering of the duopoly.

We don’t have a choice about where we get our bread, milk, veggies and other staples. It is in that context that those companies have been extracting huge profits, for a long time.

It reached a new level in the pandemic and, as inflation has risen and wages have stagnated, it has made it more difficult for workers to feed their families.

Of course, that’s the same time as the rental crisis. We talk about the cost-of-living crisis and, yes, energy, fuel, rent and food prices are higher; they’re all the things that ordinary people need to pay.

It has gotten to the point that the politicians have to do something about it because of pressure from the public.

While the Liberals don’t want to go against big business interests, the Nationals have to say they are standing up for farmers and suppliers.

The Greens have taken the opportunity to stand up against the Coles and Woolworths duopoly.

However, Labor has gone weak-kneed and doesn’t want to take on the duopoly because the SDA [Shop, Distributive and Allied Employees’ Association], their biggest backer, has said not to.

It can be confusing because there is an Australian Council of Trade Unions-sponsored inquiry into price gouging, a parliamentary investigation into price gouging and the Senate inquiry, which was established by the Greens, the National Party and the Jacqui Lambie Network.

Some of what has been exposed has been remarkable. At its core, the whole thing is about power-mongering by the most powerful corporations in Australia.

Supermarket bosses are maintaining that surging prices are caused by rising costs in supply and logistics. What has been revealed so far?

Some are things we already know, for example the return on equity for Woolworths is 26% and for Coles it is 30%; these are huge numbers for shareholders to secure such enormous returns.

It can’t be described as anything other than gross profiteering.

Another thing revealed was that when suppliers are negotiating prices, Woolworths and Coles maintain the same profit margins.

For example, if a supplier has to raise its price by $1 because of higher costs and Woolworths currently has a 40% profit margin on that product, Woolworths will raise the price but maintain that 40% margin.

So the price will go up $1.40 instead of $1, and that extra cost and the profit on that cost passed on to the customer.

They are maintaining their margins at all times. And they are using various measures to shield the truth, which is that no one makes $1 million other than through exploitation.

It might not be obvious for those at the top end of town but, for the rest of us, there is no choice.

If you need cereal to feed your kids and the price goes up by 50¢, you don’t have a choice to shop somewhere else. Your choice is that they don’t eat, or don’t eat as much.

Another element is that the suppliers have to purchase the sales data that the duopoly collects.

Importantly, the Senate inquiry revealed that Labor does not want to hold these businesses to account and force them to reduce their prices, or split them up and reduce their power.

The Coles and Woolworths duopoly exercise power over the suppliers, customers and workers because they can.

There is nothing more scientific about it than that.

The Retail and Fast Food Workers Union has appeared before the inquiry and made submissions. What are the key points?

We wanted to explain the experiences of RAFFWU members and the difficulties they have, including relying on charities, not being able to afford food, how difficult it is to get shifts and the way these companies exercise power over workers.

We were there to represent the very low-paid workers struggling to survive.

Our written submissions described how the SDA has sold out workers, going back to the 1990s when the SDA was offered a special arrangement by Woolworths, under the threat that if it didn’t get recruitment and payroll deductions, it would be obliterated as a union.

It signed up, sidelining the meat workers union [Australasian Meat Industry Employees Union] and others.

Woolworths made billions of dollars paying the minimum wage and the SDA was allowed to recruit.

Now, the SDA has about 60,000 members just at Woolworths, and they can exercise that power to support its conservative positions on abortion rights, women’s rights and a range of other issues.

Our submission talked about how divestiture — splitting up the duopoly — would be a good outcome for workers.

For some unions, divestiture would mean weakening workers’ bargaining power. But Coles and Woolworths are acting as a monopoly and workers are not benefiting.

Supermarket workers are already on the minimum wages and conditions, sometimes worse than the minimum.

Divestiture and splitting up these companies would mean workers have a more equal power dynamic with their employer.

It has to be in the tool kit if the authorities are serious about ending the exploitation and power of these companies.

What are the likely outcomes of the inquiry? What other solutions would you suggest?

I expect the committee will come up with the proposal for divestiture. But I expect that Labor will vehemently try and stop it from happening because of the impact it would have on the SDA.

So it will rest largely with the Liberal Party. Are they prepared to support divestiture?

In terms of real solutions, there has to be real risk and real concern, not just codes of practice or guides or arbitration for suppliers.

That’s just asking a worker or supplier to go up against a multibillion-dollar legal team.

Whoever proposes that is either bereft of intelligence or not on our side.

The solution we really need to start considering is state ownership, to ensure that workers and the community have the capacity to get the necessities of life at fair prices and in a way that makes sure someone is not making a buck out of their existence.

Just like we need more investment in public housing, energy, water, education provided for free, we also need state intervention to ensure the necessities of life, such as your basic groceries, are provided at a meaningfully discounted price.

RAFFWU organised the historic “super strikes” of Coles and Woolworths workers in October and December last year. Is there anything to report on the campaign for better wages and conditions for supermarket workers?

Coles put a bad agreement to workers in March. The SDA supported the agreement, claiming it would provide better wages, but it didn’t. We exposed that it actually cut the wages of 5000 workers.

In addition, thousands of workers in Coles liquor will have their wages frozen for years.

The only wage rise is to the minimum wage and a range of conditions below the award.

RAFFWU ran a “vote no” campaign and it was the largest no vote in supermarket history — about 25%.

This means about 12,000 workers voted against the enterprise agreement.

It was a fantastic campaign and the increased vote is positive. In 2018 we ran a “vote no” campaign and only received 9%. The next time it will be a real shaking of the cage.

At Woolworths it is worse. The SDA has endorsed a new deal that undermines the rights of workers to have their disputes arbitrated.

There are no wage increases, except the minimum wage and a lot of conditions are below award.

Both Coles and Woolworths deals were sold to workers on the basis of a $250 gift card for Christmas. Workers are desperate; many can’t even afford food, so this appealed to some.

We are campaigning for a “no” vote for the Woolworths deal, which will be put in early June.

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