Entrepreneur Dick Smith says foreign retail giants Aldi and Costco are pushing local producers out of business with “capitalist” business models.
Smith appeared before the Senate Select Committee on Australia’s Food Processing Sector on Friday and says competition pressure from foreign-owned stores makes it harder for local producers to sell to Australian supermarkets Coles and Woolworths.
Smith claimed local producers could not match the low prices and were pushed out.
“Then they put the price back up again,” Smith told the committee hearing.
The operator of Dick Smith Foods, which sells Australian grown and produced products, told the enquiry that he had intervened to stop an Australian beetroot farmer from burying his crop earlier this year.
“At the present time, there are still stocks of Australian beetroot at 75 cents a can, but it’s obvious that once these go, if the price is to remain the same, all beetroot in future will come from overseas,” said Smith.
“We will have lost a complete industry, but this didn’t happen because of pressure from consumers.
“It happened because one of the most astute examples of modern ‘extreme’ capitalism, fully foreign owned Aldi, decided to flex its power.”
Smith said the dominant local supermarket chains were not to blame.
“We should stop blaming Coles and Woolworths for their size and market dominance,” he said.
“It’s just a result of our economic system and all of us desiring ever-increasing growth in profits and returns on our investments.”
Smith has also revealed he will stop donating money from his Dick Smith Foods business as he fights to save his company from collapse after its first loss in 13 years, according to News Limited reports.
Smith has given himself a one-year deadline to turn around the struggling company’s fortunes or shut it down.
“In Dick Smith Foods currently, this financial year, we have lost over $200,000 and are in a position where if we cannot get both Coles and Woolworths to stock all of our small range we will go broke,” Smith told the select committee.
SmartCompany contacted Aldi for comment but no reply was available prior to publication.
This article first appeared on SmartCompany.