Why the fuck do many people get brainwashed into thinking that Woolies and Coles engage in monopolistic behaviour?
In the past 5 years:
- Woolworths has sold all of its petrol stations to EG
- Coles has sold all of its petrol stations to Reddy
- Woolworths has sold off BWS
- Woolworths has sold off Dan Murphy’s
- Profit margins of both supermarkets are lower than five years ago
what part of petrol and alcohol are groceries lmao.
the profit margins have absolutely no bearing on the question of whether they act as a duopoly in effect, nor do they bear on the question of price gouging and anti-consumer practices.
if billy awesome opens a lemonade stand, incorporates Billy Awesome's Local Lemonade Stand Pty Ltd and his stand makes $200, then pays himself $200 as sole director as his yearly salary, BALLS made $0 of profit that year. if you exclude operating expenses, billy buys himself a dripped out $150 tricycle to travel to his lemonade stand as part of his remuneration agreement with BALLS, then BALLS contracts out to his best friend jimmy to get his lemons for $49 when they cost $1, BALLS made $1 of profit.
if BALLS made only $100, and these profits were half of the year prior, but all the other lemonade stands only made $3 that year because people can't afford lemonade anymore, billy essentially runs a monopoly on lemonade stands as sole director despite his profits looking awful to all his shareholders.
when a business increases their prices to the point other alternatives are cheaper, consumers will leave. when there are no feasible alternatives, and particularly when your product is in essence a necessity, consumers cannot leave and there is nothing stopping an increase in prices except the amount of money that the consumer can afford. when you operate at such a large scale for a long time that you can keep prices lower than competition by buying in bulk, competitors die out. when the competitors die out, you are now free to increase prices as you wish.
i don't think it takes much beyond a basic understanding of the operation of corporations and rudimentary economic concepts to reach the conclusion that coles and woolworths have a duopoly for all intents and purposes. it doesn't help that the ACCC is a toothless and chronically underresourced regulator that is effectively useless and probably going to be torn down again within the next few years.