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The Weekend Neos Kosmos : 7 March 2015
DIGITAL.NEOSKOSMOS.COM THE WEEKEND NEOS KOSMOS | SATURDAY 7 MARCH 2015 23 BUSINESS Locals slaying the supermarket monsters In Tasmania, the Nikitaras family have taken on Coles and Woolworths, and are winning battles if not the war MALCOLM KNOX The Nikitaras brothers' corner store has a hallucinatory shine, like a set from a period movie. Staff in navy blue uniforms and white net caps smile from behind jars of preserved clementines and glacé peaches, pineapples and cherries. Glass cases present dioramas of stuffed olives, mushrooms and peppers; above them hang fragrant salami; the shelves are packed with Tasmanian wine and crusty loaves. In the fresh vegetables section, greens glisten and truss tomatoes blush. Yet Hill Street Grocer is not some niche big-city organic haven; the shoppers in the aisles are also filling their baskets with canned tuna, washing powder and packets of nappies. This is a West Hobart neighbourhood supermarket, a family grocer the way they used to be. Marco, Nick and Nektarios Nikitaras are simultaneously the throwbacks and the cheeky upstarts of the Tasmanian grocery business. They grew up behind the counters of their Greek immigrant parents' shops, and Marco and Nick took this one over from Marco's in-laws. Now a minichain, with a second store in Lauderdale (run by Nektarios) and a third in New Town (run by Nick), Hill Street Grocer has its own petrolvoucher discounts and loyalty schemes. It is an island in the highest density of Woolworths and Coles supermarkets in Australia. Look closely, and something has gone amiss with the laws of scale: the checkouts are busier here than at the desperatefeeling Woolworths a few hun- “Coles and Woolworths are the 19th and 15th biggest-selling retailers in the world, but their size generates more unease than national pride.” dred metres away. The fruit is better and cheaper. There is no way this place should exist. Where did it all go so right? And yet, as if they are magicians and not retailers, in their is destroying more produce than he used to farm. The supermarket's orders vary in volume, but Steve has to be ready to fill the largest one possible. He has duly increased the size of his farm. "I have to grow for the maximum size of an order, or else I lose the contract. So I grow on that scale even though the order is usually a lot less. Everything I don't sell, I have to destroy." While Steve's contract with Nick, Nektarios and Marco Nikitaras. upstairs office Marco and Nick admit that it's an illusion. "We win battles," Marco says, "but we're losing the war." They win through the quality of their produce and service, but they are losing behind the scenes, in the farms and the fields, where their supermarket rivals are cutting down their supply options and changing the way Australian food is produced. A decade ago the region had 12 lettuce growers; it now has two. Across all food production, those supplying supermarkets have enlarged and consolidated, while the others have gone, along with food varieties. "There's no broccoli, field tomatoes, Roma tomatoes," Marco says. "There are only two substantial cherry growers. The raspberry growers have consolidated and gone to Woolworths. French beans, runner beans, lots of beans used to be grown; not any- PHOTO COURTESY HILL STREET GROCER. more. The supermarkets have exact specifications for the fruit and vegetables they want, and if they don't want them, the growers won't grow them." Woolworths owns the only grocery distributor in Tasmania, which means that Coles imports its produce from the mainland and a small competitor like Marco Nikitaras flies, several times a month, from the food bowl of Tasmania to Melbourne, where he compares prices and seeks better deals. "The situation here is contracting every day. You can't just go to a wholesaler in Tasmania. They choose you, or not, depending on their existing supply relations with Woolworths." Meanwhile, size creates its own inefficiencies and food destruction takes place on a large scale. Steve, a Woolworths-contracted lettuce grower who does not want to be identified, Woolworths gives him security, his margins are tiny and increasingly squeezed by rebates and marketing ‘kick-ins’. In June, he was one of the Woolworths suppliers asked for a ‘voluntary’ contribution of 40 cents a crate - on top of a standard marketing payment of 2.5 per cent of sales - to pay for a Jamie Oliver advertising campaign. "I didn't like it, but I can't afford to risk not paying," Steve says. The Oliver rebate attracted nationwide condemnation of Woolworths. Even conservative politicians commented, with Agriculture Minister Barnaby Joyce describing the payment as "a bit rich". Oliver himself drew ridicule by saying he was only an "employee" of Woolworths, even though he trades on the idea that he can sway retailers' ethics. Coincidentally but symbolically, the next week Woolworths had to recall thousands of defective Oliver-branded vegetable-shaped toys. SA governor praises business philanthropy Living Without Limits Foundation on track for respite home MICHAEL SWEET The Governor of South Australia, His Excellency Mr Hieu Van Le AO and Mrs Van Le, hosted a reception at Government House this week for the Living Without Limits Foundation - a charity co-founded by two of SA's most dynamic Greek Australian businesses - Maras Group and BDO Adelaide. Living Without Limits (LWL) was established in 2012 by SA business identities Steve Maras (Mars Group), BDO Adelaide partner George Yatzis, and Phillip de Pinto (Universal Motor Auctions), and has been active in raising funds for projects aimed at helping children with autism and cerebral palsy. The reception at Government House was designed to formally thank family, friends, and supporters of the Foundation and raise awareness of its work. The governor presented certificates of appreciation to a select number of individuals who had given significant financial support in the last two years, including Daniel Amadio of Amadio Wines, football legends Russell Ebert and Barrie Robran, Brent Felice of Coopers, David Holst of AP Eagers, Daniel Milky of Argo on The Parade, Mark Morelli of Konica Minolta, Stuart Murray of BankSA, Julie Wrobel of Algo Mas Marketing, Darren McCormack of Cornes Toyota, Warren Tudor of Peter Kittle Toyota, Pino Silvestri, Paul Crawford and Steve Thomson of CMI Toyota. Steve Maras CEO of Maras Group told Neos Kosmos: "It was tremendous to have the governor of South Australia open the doors of Government House and welcome our foundation into their magnificent home and to honour its work, but moreover, to pay The Oliver story was part of a blizzard of adverse publicity for the supermarket giants. In June 2014, Coles lost a court case exposing its claims to be selling ‘fresh-baked’ bread when the dough was imported from Ireland. In July, the Australian Medical Association and the Pharmacy Guild of Australia criticised Woolworths about using unqualified pharmacy students and nurses to offer ‘health checks’ to shoppers. Coles and Woolworths are the 19th and 15th biggestselling retailers in the world, but their size generates more unease than national pride. Four crossbench federal parliamentarians - Nick Xenophon, John Madigan, Andrew Wilkie and Bob Katter - have designed a bill that would allow courts to order the breakup of companies that misuse their market power. It is directed squarely at Coles and Woolworths. "No other country in the world has as large a percentage of its dry groceries market controlled by two chains," says Xenophon. "We have been mugs to allow that to happen." This article is an extract from the essay 'Supermarket monsters - Coles, Woolworths and the price we pay for their domination', originally published in The Monthly - www. themonthly.com.au/issue/2014/ august/1406815200/malcolmknox/supermarket-monsters tribute to the many remarkable supporters, both individuals and businesses, who are assisting and supporting the foundation's work". Foundation chairman Phillip de Pinto said that LWL has grown faster than expected and is close to achieving its goal to establish a House of Respite. "The purpose of this facility will be to provide holiday accommodation to families whose children are affected by autism and cerebral pal- sy, those who never get the chance to have a break, who have little money left after paying for therapies. It is our strong objective to develop a facility of this kind for many years to come to provide respite for hundreds of South Australian families." Mr de Pinto also took the opportunity to announce this year's major fundraising event for the foundation - a black-tie gala dinner spectacular at the Adelaide Entertainment Centre on 18 July.
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