Small Australian companies are finding it harder to get their products on the shelves of major supermarket chains:
This policy, which is being adopted by both Coles and Woolworths (who together have over 70% of the market place) is to free up supermarket shelf space to allow for the introduction of their own private label range. In effect it is proposed to limit consumer choice across all products sold. For example the jam or tomato sauce category will include their two top selling products plus a range of Coles or Woolworths branded products.
The effect of this policy is creating major difficulties for all the Australian owned manufacturers, including those that produce our products, to the point where we have been struggling to keep a large proportion of our product range available on supermarket shelves for our loyal customers to purchase.
In recent weeks the problem has been compounded by Coles suggesting to many of our manufacturers that unless they receive large sums of money by way of an up-front payment, which in some cases is up to $100,000, then they will no longer be prepared to carry our products. Interestingly, none of the requests for money are being sought in writing.
You’ll find more about this at the Disk Smith Foods website. Small businesses need to work together to provide competition for the two major supermarket chains. We should promote each other, buy from each other and lobby on behalf of each other. Coles and Woolworths are big, in part, because of the laziness of small business.
Thanks to Craig Kelly of Southern Sydney Retailers Association for pointing me to this story. Kelly says our food prices are rising faster than elsewhere and that this is in part due to the last of Price Discrimination Legislation.
My interest in all this is small business. Tower Systems only sells software to small business. It’s what we have done for 26 years. Commercially, it suits us to support small business. Outside of that, I believe small business has more to offer our community than bland retail experiences offered by the majors.