In 1999, a Joint Select Committee on the Retailing Sector produced an excellent report on retailing – Fair Market or Market Failure? – which was subsequently ignored by the Howard government. A key concern of the committee was misuse of market power (actionable under s46 of the Trade Practices Act) via predatory pricing. During a 6 April hearing, Roger Corbett, then CEO of Woolworths, was asked about his company’s pricing policy. Corbett said:
“We would match pricing from competitors. … If it were a small retailer, we would never reduce our selling price as a matter [of]policy. … In a majority of rural areas right throughout New South Wales, we sell at the same price as we do in metropolitan areas.”
Corbett denied that Woolworths practiced predatory pricing, but “accepted there may be exceptions in some stores throughout Australia”. The committee concurred: “The committee found that there were indeed, ‘exceptions’.” In 1994-95 Safeway, Woolworths’ now-rebranded Victorian supermarket arm, engaged in a bread price-fixing relationship with George Weston Foods to inhibit price discounting by independents. The ACCC, under Alan Fels, engaged in an epic legal battle from 1996 to February 2006, when Woolworths was handed a $8.9 million fine. They fought it all the way. Corbett was not involved in the actionable conduct, but was Retail CEO from mid-1997 and CEO during 1999 until 2006.
Corbett presided over the entire period of the resistance. In July 2003, after the Federal Appeal Court had overturned in the ACCC’s favour a Trial court judgement, Corbett whinged that the litigation had been an enormous waste of taxpayers’ and Woolworth shareholders’ money. Quite, but Corbett was responsible for the waste.
“It's ridiculous … the law is so complex. We're trying to comply with every aspect of the law," Corbett said. Well, no. Section 45 of the Trade Practices Act is crystal clear, and if Corbett had complied with “every aspect of the law” he would have conceded to the ACCC in 1997.
The Federal Court Appeal judgement occurred at precisely the time that Fels retired from the ACCC chairmanship in June 2003. Corbett, in company with other corporate heavyweights, had been lobbying against Fels for doing his job properly.
Corbett opined that: "With a change in leadership, we will hopefully see a shift of emphasis and that would be good for Australia." With the appointment of Graeme Samuel to the ACCC chairmanship Corbett’s hopes would be met in spades, though the outcome was far from good for Australia.
Fairfax journalist Stephen McMahon noted in The Age, on 4 February 2006, that:
“After the [fine determination]decision was handed down, Mr Corbett vigorously defended the company's legal policy and its commitment to fair trading practices … For almost 10 years, Woolworths' senior management fought the case at every turn, leading some analysts and shareholders to wonder if Mr Corbett needed a refresher course on what constitutes a breach of the Trade Practices Act.”
Australian Financial Review columnist John Durie noted earlier on 1 February 2006: “Retail doyen Roger Corbett obviously struggles to accept reality when it comes to trade practices breaches.” The last laugh was on Allen Fels. On his last day in office in June 2003, Fels launched a case against both Woolworths and Coles for unconscionably hindering liquor licence applications or modifications by independent packaged liquor retailers and by forcing restrictive agreements on hapless liquor retailers to ensure the duopoly’s local market dominance. Coles (Liquorland) threw in the towel early. Not so Corbett.
In June-August 2006, Allsop J decided against Woolworths. According to Fairfax journalist Vanda Carson, writing in The Age on 15 December 2006:
“Following Justice Allsop's finding, then Woolworths chief Roger Corbett refused to accept the ruling, saying the policy of objecting to certain liquor licence applications and then proposing agreements in return for withdrawal of their objections was a common practice accepted by the Licensing Court of NSW. ‘We believe we were acting both correctly and completely within the law,’ Mr Corbett said.”
Carson again: “Lawyers for Woolworths have filed four affidavits arguing a small penalty is in order because of the small geographic and demographic size of the markets where the offences occurred.”
Corbett mounted a two-pronged defence: Woolworths is both not guilty and also guilty but of a lesser offence than that of Coles. Chutzpah incarnate.
On their way to liquor retail notoriety, Woolworths and Coles lobbied Premiers Kennett and Bracks to deregulate the tightly controlled Victorian packaged liquor licence regime. Kennett and Bracks complied in 1998 and 2002, with a transition set for open slather in 2006. In the interim, Woolworths and Coles were formally constrained to 8 per cent of the licences each, but Woolworths had illegally acquired well over 30 licences in excess, some hidden behind shelf companies. The breach was condoned.
Woolworths moved into pub ownership in a chance joint venture with hotelier Bruce Mathieson in 2000. The takeoff occurred with the acquisition of goldmine ALH in late 2004. As well as precious Queensland liquor licences, ALH owned large-scale pub sites suitable for big box liquor outlets. At the end of 2012, Woolworths’ pokies ownership was estimated at 11,700.
In April 2005, Corbett appeared before the NSW Parliamentary STAYSAFE Committee. The occasion was neatly captured by a columnist of the sadly departed Workers Online site. Corbett denied that there was a problem with trucking safety. Woolworths imposes a ruthless regime on its trucking contractors but the downside in terms of widespread drug use and accidents, of which Corbett claimed ignorance, had nothing to do with Woolworths.
All of which is consistent with Corbett’s admiration for the American retail giant Wal-Mart, for which Corbett has served as a director since 2006. Born in pre-modern Arkansas, Wal-Mart is the embodiment of corporate feudalism. The unspeakable wealth of the Walton family has been acquired at the expense of devastated Main Streets and a ruthlessly controlled workforce forced onto public welfare to supplement their sub-subsistence wages.
Corbett is apparently a Christian, and was invited onto Sydney University campus in August 2008 to speak on the topic “Faith & Business: Can They Mix?”. As Corbett’s faith is evidently business itself, it was clearly a perfect match.
The corporate veil has consistently allowed white collar crimes to go unacknowledged and unpunished. On the rare occasions when a weak legal and regulatory system intrudes and succeeds (bread price-fixing and liquor licences oppression), well it’s water off a duck’s back. Nobody who matters cares.
Corbett’s blatant disdain for propriety has been consigned to oblivion. Media coverage of the cartel arrangement between Woolworths and Coles is depicted as a battle, with the emphasis on the combat per se (comparable to media coverage of politics), rather than how it is laying waste to everything around it.
Shareholders have appreciated Corbett’s drive for the acquisition and abuse of market power. Thus Woolworths granted Corbett a million options in December 2000, which vested in July 2003. The journos estimated that Corbett received a windfall of $4.7 million. Shareholders now love the pokies revenue stream to death.
Corbett was placed on the board of the Reserve Bank of Australia by then prime minister Howard in 2005. Certainly, a retailing voice on the RBA Board makes sense, but one with a coloured record? In 2007 Corbett was made a member of the task force overseeing the Northern Territory intervention, in which welfare receipts were sequestered, to be channelled conveniently through Woolworths and Coles related outlets.
As reward for such long term sterling public service, Corbett was awarded an Order of Australia in 2008. Corbett became Chairman of Fairfax a year later. Corbett can insouciantly appear on the ABC’s Lateline program without risk, eminence grise in the limelight, and offer his partisan views on the political leadership. Such are the delights of a free press in the corporatocracy that is Australia.
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