Wal-Martization of New Zealand, thanks to the Aussies?

http://www.stuff.co.nz/stuff/0,2106,3689305a11,00.html
Food suppliers say they are struggling with the new Australian owners of Woolworths and Foodtown, who are using hardball tactics in New Zealand.

The New Zealand Herald said Woolworths Australia had threatened to ban suppliers' products or downgrade their position on shelves unless it gets discounts of 10 to 15 per cent.

The usual terms were around 5 per cent, suppliers spoken to said.

There was no option but to accept demands because of the company's market share, meaning suppliers' margins were getting extremely tight.

One company said it may have to shed jobs and prices would have to go up, but several others said Woolworths' tactics included not accepting price increases from suppliers.

Woolworths came into New Zealand late last year with a $2.6 billion takeover of Progressive Enterprises, owner of Foodtown, Woolworths and Countdown supermarkets.

With annual revenues of about $32 billion, Woolworths will dwarf its only rival in New Zealand, Foodstuffs, which has turnover of about $6 billion.

Foodstuffs Wellington managing director Tony McNeill said he would complain about Woolworths' tactics to the Commerce Commission, and to politicians. Progressive Enterprises said it was keeping the two countries separate in its dealings, despite allegations of it treating the two as one market, and denied being unscrupulous when it came to negotiations.

I was really disturbed when I saw this story this morning. I thought "Thus begins the downward spiral." If the suppliers give into Woolworth's demands, nothing good can come of it. Certainly consumers who shop at Woolworth's will see 'lower prices' on the shelves, but they will pay a much higher price everywhere else, as supplies shed jobs and degrade their products to meet these ridiculous price demands.

We've seen it here in the US as those *few* US-based companies that sell stuff to Wal-Mart (as most of it comes from China) have been similarly forced to cut their prices. As a result, some companies are able to become 'more effecient' (read: cut payroll and jobs).

I hope this isn't a harbinger of more to come.

Yes, I read this too (actually thought I'd posted it myself, but obviously hadn't got round to it :icon_confused: ) Didn't look good news to me either and wouldn't like to guarantee that the so-called discounts would be passed onto the customer. It's all down to greed and will have a serious knock-on effect somewhere along the line.

NZ owned Foodstuffs (I think that's the name) who own new world and pak n save, still have 53% market share so more than enough scope for people to vote with there feet if the aussies start putting up prices too quickly. Also The warehouse has just opened a food store in Auckland and they're NZ owned, think we have them covered for now.

[color=blue:2c268c9161][b:2c268c9161]Woolies is takeover target - Carter[/b:2c268c9161][/color:2c268c9161]
11 June 2006
By GREG NINNESS

Woolworths, not The Warehouse, was the likely target of an overseas takeover bid, said Foodstuffs managing director Tony Carter last week. Speculation that Foodstuffs' sharemarket raid seeking 10% of The Warehouse was a defensive move against a potential Red Shed bid may therefore be misplaced.

Carter told the Sunday Star-Times: "We think it's likely that Woolworths Australia (which last year acquired Foodstuffs' direct competitor Progressive Enterprises, which operates the Foodtown, Countdown and Woolworths supermarket chains) is likely to be acquired by one of the global retail giants. I think that's inevitable."

If Woolworths was acquired by a global player such as US-based Wal-Mart, The Warehouse could face more competition in its mainstay general merchandise and fledgling supermarket business. In that scenario, The Warehouse may welcome a Foodstuffs partnership and the share purchase would look smart.

Carter said it was too soon to speculate on the outcome. "We have had no discussions (with The Warehouse) and are mindful of the regulatory environment and competition issues. So think it's just too early to comment." The Warehouse has made it clear it regards Foodstuffs' arrival on its share register as unwelcome. But Carter is a patient man, saying Foodstuffs intended to be a long term investor in the company.

A market source last week said Foodstuffs had a good understanding of The Warehouse. "They're retailers, they know the business inside out. They think it's a fantastic business and a good investment in its own right." But Carter was sceptical about the Warehouse hypermarket opened in Auckland last week. "The research I've seen shows people people want to keep grocery shopping separate."

Al Sheepa is keeping a close eye on the situation.

If Wal-Mart tries to invade these shores, we'll take that as an attempt to steal NZ's sheep.

According to Al Sheepa's Code of Ethics, Rule 19.06 -
Any attempt by a foreign person, entity, company, to do [b:303a9ea6d6]anything[/b:303a9ea6d6] we consider negative towards NZ's sheep, will result in us[color=red:303a9ea6d6]* [/color:303a9ea6d6]doing [b:303a9ea6d6]something[color=red:303a9ea6d6]**[/color:303a9ea6d6][/b:303a9ea6d6] to them.


[color=red:303a9ea6d6]*[/color:303a9ea6d6]us= 40,000,001 members. 40 million sheep and one James bin Carman.
[color=red:303a9ea6d6]**[/color:303a9ea6d6]Something = Flinging poo, insulting them, sending negative thoughts their way, evil looks.....you know "something"


[color=pink:303a9ea6d6][size=9:303a9ea6d6]In case you are new to the forum (or forgot b/c I haven't been around much lately) I'm the mastermind of Al Sheepa.....a purely fictional group of "freedom fighters" who's purpose it is to defend NZ's sheep.

Note to the CIA, KGB, SS, SIS, etc - This is a joke.......Ooh, look! A shiny WMD in Iraq. :icon_cool: [/size:303a9ea6d6][/color:303a9ea6d6]

[img:299f57bcf7]http://www.msnmonkey.co.uk/Emoticons/Words/hi3.gif[/img:299f57bcf7]. Welcome back, James. How's life been treating you these last couple of months? Good to have you back (and Al Sheepa, of course).

Note: I took the liberty of changing the colour of your 'aside' comments as the cyan was practically unreadable. [img:299f57bcf7]http://www.invision.smileyville.net/smilies/cha%20(90).gif[/img:299f57bcf7] Don't want our members complaining of eyestrain.

[quote:1339722ab9="Mother Bear"][img:1339722ab9]http://www.msnmonkey.co.uk/Emoticons/Words/hi3.gif[/img:1339722ab9]. Welcome back, James. How's life been treating you these last couple of months? Good to have you back (and Al Sheepa, of course).

Note: I took the liberty of changing the colour of your 'aside' comments as the cyan was practically unreadable. [img:1339722ab9]http://www.invision.smileyville.net/smilies/cha%20(90).gif[/img:1339722ab9] Don't want our members complaining of eyestrain.[/quote:1339722ab9]

Lifes been going pretty well.

Thanks for changing the colours....well, thwarting my plan at world domination by making others blind! Oh well. I'll have to try something different tomorrow. :icon_wink:

Be very, very careful with these Wal-Mart wannabeez. We drove through a charming little town called Levine during our visit to New Zealand. I can't tell you how much I loved that little place. People walking and shopping in the little town centre. As we drove away, I looked at my wife and told her, "You know, this whole town would be destroyed by a single Wal-mart if they ever built one here." We sighed and continued on.

I implore all of you that if you should ever have to fight a war for a just cause, it should be to keep the Wal-mart crowd out of your country. Heed my warning or suffer terrribly!

[quote:e24358c268="ExPat"]Be very, very careful with these Wal-Mart wannabeez. We drove through a charming little town called Levine during our visit to New Zealand. I can't tell you how much I loved that little place. People walking and shopping in the little town centre. As we drove away, I looked at my wife and told her and said, "You know, this whole town would be destroyed by a single Wal-mart if they ever built one here." We sighed and continued on.

I implore all of you that if you should ever have to fight a war for a just cause, it should be to keep the Wal-mart crowd out of your country. Heed my warning or suffer terrribly![/quote:e24358c268]

Amen. :icon_mrgreen:

I second that amen.