Another local firm goes down

Vanguard May 2013 p. 4
Nick G.

(Consumers are letting the duopoly know that they want this local brand stocked.  Messages above at suburban Woolworths store)

The vicious duopoly Woolworths and Coles have claimed another Australian scalp.

South Australian family-owned Spring Gully has been placed into voluntary receivership following a disastrous 60% decline in sales.

This follows the loss of a number of contracts with the duopoly and German firm Aldi.

The company has been making its own products under the Spring Gully, Leabrook Farms and Gardener Range brands, including gherkins, honey and jam, since 1946.  It recently entered an agreement with Dick Smith Foods to produce goods under contract - Dick Smith jams and Ozemite make up 20 per cent of the company's sales - through the major supermarket chains.

But it is not just the loss of contracts that has seen the company go down.

Local companies have to bid for shelf space and positioning against the duopoly’s own generic products, mostly sourced from overseas.  The generics and other imported and multinational brands can buy space between waist- and eye-levels, the so-called “buy level” and the local product ends up at ankle level where only the most brand-loyal shoppers can find it.

The announcement of the company’s bankruptcy prompted a furious response by consumers in SA.  Talk-back radio and on-line newspaper comment boxes were flooded by hundreds of people denouncing the duopoly and unfavourably comparing government handouts to US multinational car manufacturer GMH with the absence of government assistance to struggling local firms.

(Above: Independent Grocers Association members are working hard to keep Spring Gully alive)

Julie P. of the Adelaide Hills was typical, writing “Yes Coles and Woolies, you’ve done it again. As your saying goes down, down prices are down!!! It should be changed to Down, down another company down!!! The greed that Coles and Woolworths have is just disgusting…”

It is not just the 44 company employees who face the scrap heap care of the duopoly: fruit and vegetable growers and apiarists who supply the company will also be hit.

Although capitalists are fond of putting the blame for small business difficulties at the feet of workers and their wages and conditions, Marx was spot on when he said that one capitalist kills many.