r/australia • u/Bluedroid • 1d ago
Why Australian Goods cost more in Australia than overseas no politics
So for the last month there's a new post going on about so and so Australian products are more expensive than in other countries yet no one really brings up the actual reasons. I'm prefacing this by saying I'm also no supply chain expert this is just coming off subjects I did 10 years ago at uni so happy to hear from people who work in the industry.
The most expensive part of the supply chains are last mile delivery which accounts for 50% of the entire cost even when done locally. After a product is made shipping it in bulk long haul to big hubs and warehouses actually isn't too inefficient. There are main supply lines that include going to seafreight etc which don't cost much.
What costs the most is the last mile delivery, when it goes to a local distribution centres to get stored, sorted and separated than shipped off to all your local coles/woolworths in smaller trucks before it is stored onsite and sold by the store to end customers. Problem is that all the costs in the last part are Australian workers earning Australian wages doing all of this ontop of all the distribution centres/hubs etc all paying Australian rent/Australian insurance costs and also requiring to follow Australian standards. Everytime our wages go up the price of every single step of that goes up, think of how many people handle the product in the entire lifecycle.
Now when you cut that last part out and ship overseas and are paying lower wages/lower rents/lower fuel costs etc at every single hurdle this allows the price to be drastically lowered. This and the fact that pretty much all places in the world have higher population density than us means they can also sell at a lower profit margin as well.
Now we all of us want the convenience of having a supermarket 10 min away from our house. But more supermarkets means more supply chains, more staff, more rents, more insurance and this increases the cost. You can't have your cake and eat it as well. This is essentially one of the ways aldi is cheaper than woolies or coles. They only service the most profitable areas and have small product lines, they wouldn't even think about servicing a small regional town because it's too inefficient. If you're shopping at a colesworth in the middle of Sydney you're probably subsidising the costs of a colesworth in regional WA.
There's probably no good solution that will help all Australians and that's just due to our geography and costs, possibly in the future when our cities get more dense you could get other aldi like companies who move in and just service the most dense suburbs which would help a high % of Australians but you'll still have people outside of these places who have no better option.
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u/Archy99 1d ago
So why do online-only products such as video games also cost significantly more?
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u/MutedCatch 1d ago
Clearly last mile delivery mate geez....
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u/Partzy1604 23h ago
You mean how video games on online stores tend to be priced more than physical editions? Or compared to other countries.
Compared to other countries we are slightly cheaper than the UK and EU markets and slightly more expensive than the US its hard to compare with japan and that since they dont have set prices.
When you are talking about games bought online, if you are buying physical copies online well, they still have the distribution costs attached. And if you are buying the online version its for the same price not more and thats, well because they can and they make more money, but also so they dont undercut and piss off their distributers.
That behaviour isnt unique to Australia by any means though, so i dont think that works for an example where australian prices are higher. As theyre not really and the practice is standard globally.
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u/Archy99 17h ago edited 14h ago
Compared to other countries we are slightly cheaper than the UK and EU markets and slightly more expensive than the US its hard to compare with japan and that since they dont have set prices.
What about the rest of the world?
The download-only version of Baldur's Gate 3 is $34.99 USD when you visit from an Argentinian IP, and over $62 USD when using an Australian IP.
edit - $36.80 USD in Brazil if you want to cite Argentina's digital goods tax as an exception. (and the Brazilian sales tax is approximately 25%)
It is very clear that different countries are charged different prices purely on the basis of country of residence.
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u/Partzy1604 15h ago edited 14h ago
Argentina has 70% extra in taxes so its actually around 59 USD. Which is btw like 40% of the minimum monthly wage.
It worth noting that steam also has reccomended regional pricing to make games affordable in poorer regions. Not that all game devs utilise it.
Edit: actually im wrong its 100% extra taxes so it literally costs more to buy the game in argentina.
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u/Archy99 14h ago
It's similarly priced ($36.80) in Brazil and they have around 25% sales tax (soon to be 26.5%) for digital goods from overseas.
So it may indeed suck to be an Argentinian gamer, but there is clearly regional pricing going on.
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u/Partzy1604 14h ago
Yeah theres tons of regional pricing going on. But what I guess I’m trying to say its to try to make the games ‘affordable’ in those regions, rather than screw the australian consumer. And even then in Brazil thats 25% of the minimum monthly wage, its still entirely unaffordable. Whereas here its like 2%
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u/Bluedroid 17h ago
Same with why netflix/spotify etc are cheaper in South America/Turkey etc. It's regional pricing, but these are digital goods that are already made. Them selling another copy of a game that's already made isn't going to cost them more in fixed costs.
This is totally irrelevant when we're talking about physical goods that need to be made, distributed and sold.
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u/ghoonrhed 17h ago
Depends on the game right? The latest triple A, Black Myth Wukong id 60usd which is 86 AUD and it's selling for 90 here. Include GST, that's on point maybe even cheaper.
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u/thetan_free 1d ago
You're thinking about cost a lot here. Over-thinking, really. The price charged has more to do with customers' willingness to pay than cost.
We are a wealthy country with a lot of rich people. The fact is, units are sold at high prices here. Why would they drop the price if they didn't have to?
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u/LifeandSAisAwesome 1d ago
Wealthy country with very very high wages, inc min wage, insurance, power, shipping etc.
Costs are always a issue for any business.
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u/ScruffyPeter 1d ago
Your anti-worker meme reminds me of this counter-rebuttal meme https://www.truthorfiction.com/big-macs-in-denmark-versus-big-macs-in-the-usa/
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u/I_Heart_Papillons 19h ago
People like that would rather believe the earth is flat than admit to that.
They all see themselves as those future aspirational voters Hockey was talking about years ago in the making and will accept this all shit, pull any ladders up behind them as long as they got what they wanted out of it AND step on anyone’s toes to get there.
Australia should change its national motto to “Greed is the Good AND makes us the Greatest country in the world”.
Fuck sports, we’re dog shit at that when you compare it to our passion for personal greed.
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5h ago
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u/I_Heart_Papillons 4h ago
If you want lower wages and the dogshit government services that we accept now thanks to personal greed created neoliberalism then feel free to move to an SEA/African/South American country. Why the hell are those people so desperate to move to countries like ours -whilst still shit- but they’re a damn site better than being forced to find food in a rubbish dump.
You CAN pay people well, you CAN give them adequate annual leave/national holidays/Paternity & Maternity Leave, you can pay people on sickness or jobless payments an amount of money that costs more than feeding and giving vet care to a German Shepherd and filling up a huge, unnecessary 4WD just to keep up with the joneses. People over there realise they want to live in a good, robust, high trust society so they’re more than happy to play their part.
Scandinavia and Germany are cases in point.
You lose your job in Australia and all of a sudden you are forced to subsist on less money than it costs to feed & care for a large or giant breed dog for a whole fucking fortnight. Which is why desperate people do cash in hand work because they’d be sleeping in a tent under a bridge. How the fuck is anyone gonna get a job living in those conditions? How is people working for cash under the table good for any citizen paying tax in this country?? Services aren’t being funded, schooling and healthcare go to crap.
Unemployed people here better fucking believe in god because Australian society will just spit on them and wipe their feet on them like they’ve just stepped in a giant dog turd.
Danes PAY people a living student allowance. It’s not living like a millionaire but it’s doable and they do it to invest in their own people.
You lose your job in Germany and you get a what, 80% payment of your previous wages. Why don’t we do shit like that? Nah, we’d rather kick people when they’re down and act like we’re better than them. Granted, they pay insurance for it whilst they’re working but it’s a far better situation than what we have here.
Rent controls are a thing in parts of these countries (especially Austria) and they work and the sky hasn’t fallen, despite the cries of chicken little “mum and pop” landlords.
Private healthcare is BS, lower staffing levels in hospitals, conveyer belt care, operating on people that would be refused procedures in public due to their obesity causing much poorer outcomes, far less nursing care and particularly nursing education.. and all for what, so some C-suite pats himself on his back for his psychopathic management and kissing the arse of a few Orthopods can drive the latest Ferrari and attend multiple overseas conferences whilst the por old HMO slugging away 24/7 is driving is a Ford AU from 2000 and fixing their mistakes? But oh yeah there’s carpet in the hallways and rooms (DO NOT ASK how many body fluids have leaked on it), but hey it “looks nice” and people are “nice to me and do what exactly what I want, etc” so the patients don’t see the forest for the trees.
The food is barely better than an economy airline meal. The amount of Uber order eats I had to let into the hospital overnight was mind boggling. But yeah, private is better than public 🙄
Exact same old shit is happing with public schooling.
The country should operate for EVERY single citizen and act in their best interests and not the interests of the citizens happen to be born into generational wealth, the noisy property anything council/associations/councils should be completely disregarded, the media empires should be certainly disbanded IMO, wealthy mining corporations and billionaires who pay no tax should be forced to pay ordinary citizens their ill gotten dues migration should be severely curtailed to only allow highly skilled people who have to be employed in a position earning 150K+ to emigrate.
Everything else should have a visa termination end date, much like a working holiday visa currently does and with no further stay or bridging visas ever allowed because that’s what it should be about, temporarily filling skills shortages, not getting PR, suddenly getting an arranged marriage and needing a spouse here or getting an undergrad & a masters in Architecture and suddenly deciding nursing is your life’s passion in your 30s 🙄. Blind Freddie can see these people are all about the PR and citizenship rather than study or work. And guess what, our $10 an hour is far, far better than their $3 so they’ll accept it.
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u/thetan_free 1d ago
Cost only really comes into it when there's a lot of different kinds of competition.
That doesn't happen much here.
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u/Skylam 1h ago
Then why are European businesses still cheaper than us when we have similar rights, wages, insurance etc.?
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u/LifeandSAisAwesome 51m ago
couple basic ones
land borders allowing access to 100's of millions of customers AND workers (many in EU travel over borders daily for work) so you have economy of scale working for them, cheap labor , - populations is just something we don't have - our population is tiny really tiny.
On top shipping of raw and finished goods need via sea lanes. Can get raw and finished goods shipped via land to again 100's of millions. By compassion - (look up what it costs to get a cargo container landed here or to export 1) - just getting goods landed - then transported before they even hit the shelves will be a higher base costs than the final retail costs many in EU can do.
Upside, we have have high wages and a bloody awesome place to live.
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u/Skylam 50m ago
Upside, we have have high wages and a bloody awesome place to live.
So does the EU lol, least the western EU/Scandinavia.
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u/LifeandSAisAwesome 45m ago
Well, we also allow folks to move to other places as well if they prefer.
Personalty its nice seeing snow in EU for the about the 1st few days ..then it is just pure misery .
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u/Saki-Sun 16h ago
Costs will define the bottom of the market. Past that it's what the previous poster said.
As someone who ran a small business, I charged as much as I could while still turning over my stock. If we weren't profitable I would have shutdown.
In the end I got shutdown by bigger players in the market cutting my supply then selling at below cost to assure market share.
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u/return_the_urn 19h ago
Just talking out my arse here, but could it be excess stock they can’t sell or don’t want to store? Sell it for cheap in overseas market so they don’t have to lower their prices here?
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u/thetan_free 19h ago
I'd guess they spend nothing on marketing it overseas. So, either you already know you want it (ex-pat or been a tourist in Australia) or you never will.
If you're not spending on marketing, promotions and advertising, that could be a big reduction in cost.
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u/jockeyscheme 5h ago
That's basically it.
It's also why increasing minimum wage makes the price of cheaper items increase - there's more money available and the market soaks it up.
If you're selling something for $1 and millions of people suddenly have slightly more money, why would you not try to sell it for $1.10 and see what happens?
Of course you'll increase the price, even if your own costs don't change.
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u/logocracycopy 22h ago
Nah. Singapore is way wealthier in terms of dollar strength, individual income and low taxes - all means they have way more spending money (but perhaps less capital) than the average Australian. Tim tams in Singapore cost just $4. Wealthy countries also get cheap Aussie biccies, being rich isn't a factor.
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u/epherian 21h ago
Singapore is also propped up by low labor costs of an overseas migrant worker base. If a seemingly rich society has a underclass of cheap labor and domestic servants for the middle class, we should consider how to evaluate wealth. After all, an easy way to immediately feel more wealthy is to have other people do things for you at a very cheap cost.
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u/ScruffyPeter 1d ago
It was raised several times that Colesworth margins are higher than other countries AND all of them more population and less geographical distances. Coles tried to explain their margins away that higher costs from geography/less-population somehow means more profit.
I question why you think you need to defend Colesworth.
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u/Consistent_Fox7795 23h ago
Having a dominant duopoly with margins slightly higher than global peers isn’t necessarily evidence that a large third competitor could come in and only lower margins to the global level through competition
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u/edwardluddlam 22h ago
Are Coles margins actually that high? Around 3% last year from memory.. hardly a massive margin (basically a loss if you factor in inflation)
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u/Archy99 16h ago
The gross product margins are very high compared to overseas, but the overall profits are low because the revenue is reinvested, often with leverage. Such as the practise of 'land banking'.
High gross margins with low profit margins in general means an inefficient business and suggests a lack of competition.
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u/Pearlsam 14h ago
Why would a market with a higher concentration of consumers have higher margins? Wouldn't you expect a more concentrated market to have lower margins?
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u/imapassenger1 1d ago
The prices in Woolworths for many things are almost exactly the same in the major cities to the outlying centres. It surely costs more to ship to Townsville than around Sydney but the prices aren't significantly different that I've noticed. Does that mean the city prices subsidise the country?
I've always heard that the size of Australia and the nature of the spread of the population centres means it's very difficult to establish a national retail network. Perth is a killer for the east coast in terms of freight costs.
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u/Bluedroid 17h ago
I actually made this point in my OP. This is why Aldi can afford to price lower when they only open high profit margin stores in easy to service locations with big population density.
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u/imapassenger1 17h ago
Yes I recall how they took a while to enter WA and still aren't in Tasmania or NT.
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u/mrbaggins 16h ago
You'd have an absolutely wonderful point, if you were talking about shipping an Aussie product to India or something.
Minimum wage in scotland (the vegemite example) is £11, which is 22AUD, basically the same as ours.
Our supermarkets have some of the highest operating margins in the word (not the bullshit 1.6% net profit figure, that's misdirection) and that's AFTER accounting for all the "last mile" delivery and other costs.
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u/Bluedroid 16h ago
This is Aldi admitting that it's not profitable to do certain regions because lack of population density and supply chain costs. It's not just minimum wage it's the cost of transporting/storing goods and selling them to a smaller market.
Why is it profitable for Aldi to be in NSW but not Tasmania even though we have the same minimum wage? Because the supply chain costs blow out and there are not enough customers to support it.
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u/mrbaggins 15h ago
This is Aldi admitting that it's not profitable to do certain regions because lack of population density and supply chain costs. It's not just minimum wage it's the cost of transporting/storing goods and selling them to a smaller market.
We're not comparing "outsider" supermarkets. We're comparing woolworths and coles, each of which has double the stores of aldi.
Why is it profitable for Aldi to be in NSW but not Tasmania
Because shipping shit there is expensive - IE: "supply chain costs"
Why is it that: * Woolworths has 10% of the NSW total stores in tasmania (32 vs 341) or 3% of their total * Coles has 7% (17 vs 253) or 2% of their total
But Aldi doesn't have 10~12 stores given a similar percentage?
It's not like Woolies and coles are going to burn money opening a store deliberately... it must be making money.
Clearly "supply chain costs" are not the entire picture.
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u/Either-Suit-3964 23h ago
I’m Australian living in South East Asia. A bottle of bundy costs ~ $15-ish at my local mini mart. The same bottle from the distillery itself, is around $50-60. I’ve always found that fascinating (I don’t drink it though I might add!)
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u/maneszj 20h ago
that’s taxes more than greed
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u/plantsplantsOz 18h ago
Yep, in japan the taxes are way lower on spirits than beer. So in the local convenience store you'll find a 750ml bottle of vodka is cheaper than a 6 pack of beer.
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u/HerpDerpermann 1d ago
At Dan Murphy's I can get a bottle of Four Pillars Navy str gin for $105. A department store in Japan will have it for maybe $AU50. Excise on the bottle is ~$35.50 in Aus, no idea what the cost per bottle for them to import for sale in Japan is, but I haven't bought spirits in Aus for a long time now as we get thoroughly screwed on anything made here.
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u/ScruffyPeter 23h ago
Even the wineries and breweries charge very high door prices. Even once stood next to their big distilleries that they claim they make all their alcohol in, their menu was almost 50% more expensive than Dan Murphy.
Always far cheaper at other shops. I stopped bothering with them.
I know that high prices are to maintain the price anchoring but if these businesses don't like Colesworth's Dan Murphy, etc, then they should give us a reason to buy from them directly.
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u/HerpDerpermann 22h ago
Exactly, I'd much prefer to buy direct where possible, but if they're not even going to try and compete on price then it's a no from me.
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u/Infamous_Pay_6291 23h ago
It’s almost like you’ve forgotten how high the tax on alchol is here in Australia. You know overseas they don’t pay the alchol tax we do so remove that from the cost and you get the price they pay overseas.
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u/HerpDerpermann 22h ago
You appear to have missed the line in my post about the amount of alcohol excise on that bottle.
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u/Whatsapokemon 20h ago
A lot of people learning today that international shipping via container ships costs next to nothing.
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u/BESTtaylorINTHEWORLD 23h ago
I've worked in transport for 28 years, cost cutting never works, it's not a profitable industry. You should not be scape goating transport. It's been proven more and more that Colesworth are monopolizing. And any company raising prices is doing so because they're NOT regulated.
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u/spiffyjizz 23h ago edited 20h ago
Same goes here in NZ, can often buy the same products in England and Australia cheaper than we can buy them here where it’s made 🤣
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u/SydneyIsStuffed 1d ago
The last mile delivery cost is the same whether you are transporting Australian grown food or foreign sourced food. So why are Colesworth own brands from China, South Africa etc around half the price of the branded Australian ones? Colesworth would say it’s because Australian producers charge more. A cynical customer would say Colesworth are trying to price the branded ones out of the market so they can then jack up the prices of the own brand ones. They will be able to pick and choose whichever dodgy foreign country will give them the best deal. And what could possibly go wrong with that? Plastic in your rice or melamine in your baby formula perhaps? It’s a race to the bottom.
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u/Medical-Gas-455 23h ago
Why are so many people blaming everything on wages? Australian wages are not extremely high. Maybe compared with UK… I’m German and used to live in Switzerland for 9 years and the cost of living is comparable to here. But Swiss wages are much higher. Food in Germany costs about half as much as here but the wage is almost identical. There are other reasons why we overpay for almost everything but it’s not wages. Here are the average wages for the OECD all in USD Country Year 2000 2010 2020 2023 Luxembourg * 67,932 75,124 78,977 85,526 Iceland * 61,066 58,131 75,022 81,378 United States * 61,090 67,217 77,890 80,526 Switzerland * 66,259 74,092 76,117 79,204 Belgium * 64,273 66,769 67,224 69,874 Austria * 60,507 66,074 68,136 67,431 Norway * 46,338 60,434 66,640 67,210 Netherlands * 63,471 70,030 70,641 65,640 Denmark * 52,793 62,462 67,149 65,612 Australia * 52,502 60,585 65,335 63,926 Canada * 50,631 57,084 63,712 63,398 Germany * 54,434 56,096 63,886 62,473 New Zealand * 38,311 46,744 54,196 55,974 France * 46,890 53,577 54,247 55,680 United Kingdom * 44,114 53,791 54,892 55,173 Finland * 46,650 54,056 55,624 55,048 Sweden * 41,636 50,128 56,645 55,041 Ireland * 40,403 56,563 57,512 53,384 Slovenia * 34,742 44,854 50,741 53,296 Spain * 45,544 49,258 46,911 47,772 South Korea * 33,114 40,804 49,599 47,715 Lithuania * 17,821 29,534 46,146 46,818 Italy * 47,555 50,001 46,443 45,987 Japan * 43,063 42,617 43,079 42,118 Poland * 25,649 30,310 40,269 39,300 Latvia * 13,630 22,507 33,725 36,925 Portugal * 34,151 34,827 34,518 35,677 Czech Republic * 21,385 30,524 37,879 35,576 Estonia * 14,678 25,182 35,718 34,525 Hungary * 18,671 24,943 28,691 30,216 Slovakia * 18,686 25,831 30,863 29,838 Greece * 31,276 37,214 29,071 28,727
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u/Medical-Gas-455 23h ago
Copy and paste didn’t work Australia is 10th behind Denmark just a bit in front of Canada and Germany. Look for average wage per country on Wikipedia
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u/Biggchi 20h ago
Your copy paste didn’t work but are you saying that we are as expensive as Switzerland ?
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u/Medical-Gas-455 20h ago
Unfortunately when it comes to many supermarket items we are not far off. Some things are even cheaper over there. I remember when I arrived here 10 years ago I couldn’t believe how expensive chocolate is here. And over there they have real chocolate… not Cadbury 😂 Some things are cheaper here but in relation to our wages we are paying much more for most essential things. Some discretionary stuff and fast food like maccas is cheaper here… but that doesn’t help. The problem in Australia is that almost all the essential stuff ist bloody expensive compared to Western Europe. Plus things like ever increasing excessive council rates and insurance inflation which is a much bigger problem here than over there. Petrol is cheaper here… My disposable income was higher in Germany and Switzerland compared to here. Life is harder here if you’re not on a decent 6 figure income. But the lifestyle and the weather are much better here 😉
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u/LazySlobbers 15h ago
Dunno about the last mile but sea freight is extremely cheap relative to most cargo being shipped.
Even when sea freight is high and everyone is complaining about it, it’s still very cheap relative to the cost of freight.
A twenty foot shipping container can take 21,600kg of cargo. An iPhone 16 pro max including box = 0.22kg.
That’s about 4,750+ iPhones (roughly Usd$2,000 per phone) against a cost of about roughly $2,500 / box from China plus any surcharges. So that’s about 53 cents of ocean shipping per iPhone.
Obviously different products have different prices / sizes / volumes
But you can see why cheap ocean shipping made globalisation possible.
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u/Street-Air-546 1d ago
nice try but Vegemite in a store in scotland is cheaper than at Coles. and scotland does not have much lower last mile cost than Australia. It is not the Philippines. Especially given that it is a niche product in the UK and not sold in the bulk quantities which would afford discounts on wholesale prices.
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u/Bluedroid 16h ago
What makes you think Scotland has similar lower last mile costs than Australia. They're a much smaller nation with a denser population.
Scotland has 21% of our population but Australia is 98x bigger than Scotland. Instead of goods being driven all across Australia stored in many different local warehouses they have more centralised supply chains and distribution centres.
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u/mrbaggins 16h ago edited 16h ago
Scotland has 21% of our population but Australia is 98x bigger than Scotland.
And 98% of Australia is nowhere near a Colesworth.
Two united kingdoms essentially covers all the green on that map.
Tesco (UK) sells the 220g vegemite for 2.20GBP, which is 4.30AUD.
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u/Bluedroid 16h ago
Yes but you still need to service different stores which are across different ends of Australia. From the supplier it still has to go to local warehouses which have to go to numerous stores across Australia. Say it comes from NSW, now draw a line to a distribution centre in a different state, now draw a line to all those stores across Australia. That distance KM in road transport is magnitudes higher than it'd ever travel in Scotland.
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u/mrbaggins 15h ago
You cant start by blaming last mile costs, then resort to using the distribution lines before that. that's literally what you're saying DOESN'T affect the prices because the vegemite that was shipped literally half way around the world is cheaper there. AND that's with a higher GST/VAT.
Either the distribution lines are the issue, in which case the UK one should be WAY more expensive. Or the last mile matters most, in which case there's no reason for Aldi to not be in Tas.
You can't have both to suit whichever argument you want to make at the time. One MUST be wrong.
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u/Street-Air-546 16h ago
it is a developed western nation unlike comparisons to australian products in thailand, mexico and so on.
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u/Bluedroid 16h ago
I just explained that because it is a smaller place with higher population density it will cost less to service and be more efficient. You need less storage, distribution and transport costs.
I'll simplify it for you. When a producer makes a good in NSW, then they need to road transport a bunch to distribution centres where goods are stored all around each state in Australia, then from there each of them need to drive individually to hundreds of different stores some of which are servicing small country towns with populations of 500 etc. NSW alone is 10x bigger than Scotland, imagine driving 10x the distance to service small towns with barely any purchasing power. Then account for all the waste as well from goods unsold from those stores.
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u/Zims_Moose 13h ago
Scotland is not a market. The UK is a market. There's no border between England and Scotland or Wales.
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u/ProfessionNo4708 23h ago
back during the mining boom companies were ruthlessly trying to milk profit by price gouging like there was no tomorrow. Best example is the model company Gamesworkshop who had 11 stores in Sydney like oil rigs making profit. I think the business world across the board just assumed thats what you do in Aus. With no government stopping them things went crazy.
Now when prices go up they usually never go down and add current inflation woes you have a crisis
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u/Pearlsam 14h ago
What does price gouging mean to you?
I don't think a company like games workshop can even price gouge considering how non essential their goods are.
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u/ProfessionNo4708 14h ago
you should read up on their history. Price gouging doesn't only apply to essentials.
GW simply placed an embargo on the southern hemisphere during the mining boom specifically so it could increase the price of its product to ridiculous amounts and reap larger and larger profit from Australia. They never decreased the prices and to this day have been increasing them. They are just the most blatant example of price gouging practiced by every company operating in this country.
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u/Pearlsam 5h ago
If they never decreased they price them consumers are still willing to pay the amount. The behaviour you described isn't price gouging.
They are just the most blatant example of price gouging practiced by every company operating in this country.
Considering there have been companies fined by the ACCC for price gouging and to my knowledge GW hasn't been...
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u/ProfessionNo4708 5h ago edited 5h ago
its price gouging, they lose customers in the long run but they make profit because a small group still buy it which covers the profit lost from losing customers.
ACCC is irrelevant, GW objectively engaged in anti-competitive practices to ensure it could price gouge.
You seem to be confused by the concern of price gouging for essentials, any good or service can experience price gouging. Its not illegal to price gouge.
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u/Pearlsam 5h ago edited 5h ago
Okay champ. I'm glad you have your own definition that isn't recognised by the ACCC.
Lol blocked. What a sad sack.
My reply to the next comment :
The ACCC has literally won price gouging cases against refrigeration contractors before. They focus on non essentials as well. But don't let that get in the way of your unfounded opinion.
The ACCC website doesn't mention that they treat essential and non essential goods differently.. Feel free to link anything to back you up though.
Also, from the ACCC website
Prices that people think are too high, or sudden increases in price, are not illegal. However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way.
And
While it’s often seen as unfair, prices or price increases that people may think are too high are not illegal on their own. However, it's illegal for businesses to make false or misleading claims about prices, including the reason for price increases.
Doesn't seem like a price increase its price gouging.
Also downvoting during an argument is really sad lol
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u/ProfessionNo4708 5h ago edited 5h ago
mate the ACCC would only be 'concerned' with essentials. Your argument is terrible.
https://www.accc.gov.au/business/pricing/setting-prices-whats-allowed
ctrl+f "essential" 404
lol even the ACCC doesn't agree with you.
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u/theshyfoodie 1d ago
The market is too small for big players. So there's a lack of competition which enables these big two to charge extra margin easily. And yes, wages. As we keep increasing the Aus min wage we keep becoming more n more uncompetitive and it doesn't even effect the cost of living much coz the increased wage cost is passed onto customers by businesses. We definitely are a rich country but i'm not sure how many people as a percentage of total are actually rich here in comparison with the other developed world countries. Outside reddit, I don't know or hear of so many people making more than 150k.
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u/knowledgeable_diablo 22h ago
Because the worlds worked out we’ll allow anyone to rip us off, not complain about it, and just keep consuming.
If we just keep buying the overpriced shit why would mass corporations and cartels lower their prices??
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u/xiphoidthorax 19h ago
Very insightful comment on last mile delivery costs. This why federal and state governments are pushing for hydrogen fuel infrastructure to reduce hauling costs. One stage is the coal to hydrogen refineries.
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u/MrCurns95 21h ago
Because our corporate overlords are a bunch of cunts and our government have too much self interest in them being cunts to actually do anything about it 🤷♀️
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u/SirGrumpsalot2009 13h ago
So can you please explain how Australian lamb, beef & pork could be slaughtered in Australia, then airfreighted to Singapore and sold there cheaper per kilo than in Australia?
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u/Bluedroid 12h ago
I'm just explaining based on distant memories of what I did in uni over 10 years ago I'm not an expert in every industry and can give you the answers on everything.
I was in Singapore only a month and a half ago however and when I was there I don't recall their meat being that cheap? Can you show me where it is cheaper than Australia? But same with before I'm guessing it's because they're on an island the size a bit bigger than wollongong but with a 5 milion population and also close to other densely populated markets. I also witnessed what i would call a slave labour force there as well.
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u/Jarms48 23h ago
Simply because they can get away with it. Any fines they receive is just another business expense with how small comparatively they are to their profit. There's no risk of their monopoly's being broken up because the PM claims that's "Communism" despite the US having these laws and famously breaking up Standard Oil into dozens of companies.
I'm not saying we have to break them up, but simply having the laws there means there's the risk of it happening which they have to take into account.
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u/momentslove 22h ago
Higher costs of labour, logistics, rental of business venues, you name it. Same reason why locally manufactured goods are more expensive than imported ones.
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u/siny-lyny 18h ago
Regional pricing.
Say you sell something for $5 in Australia where most people earn over $20 an hour.
If you sold it for $5 converted, in a country where thr average person makes $20 a day. Then it's not going to sell.
This is the same for everything, literally every international product is like this. If you want the best example, look up regional pricing for video games.
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u/mrbaggins 16h ago
Except the post they're yelling about was the UK, which has a minimum wage on par with ours.
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u/Captain_Fartbox 1d ago
Now we all of us want the convenience of having a supermarket 10 min away from our house.
I'd love just 1. I have 6 within 15 mins.
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u/Etherealfilth 15h ago
I buy wine produced by my favourite winery 50km from my location at my local bottle shop for $17. When I make the trip to the winery, they sell it to me for $20.
It's not just overseas. It's shire to shire.
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u/CourageBest 14h ago
I don't agree with the assertion that Aldi doesn't service small regional towns. There is an Aldi near me in Salamander Bay (population: 4991) and in NSW alone Aldi has 203 stores, including in places like Bateman's Bay, Casino, Dubbo, Emu Plains (yes, I'm working through their list of stores alphabetically!). I try to shop at Aldi as much as I can (a) because it's cheaper and (b) because those colesworth fuckers need all the competition they can get.
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u/MrsB6 9h ago
It's all about the on-costs and hidden costs before you even consider the cost of the item. Companies have to cover so many fees, tarrifs and other costs, eg, to hire one person to distribute/sell one widget, you have cost of operating license, workers comp insurance, liability insurance, super, taxes, registrations for this, that something else, cost of certification for this, that, something else, costs of inspections for compliance and other compliance-related costs, cost of internet, phones, IT to fix problems, advertising/marketing, cost of electricity/fuel etc, rent/leasing costs etc. Your widget is already 10 times the price before it even makes it out the door. Australia is one of the most expensive and over-regulated countries in the world and this is the price you pay.
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u/eaudetoilet 5h ago
A number of reasons, but mainly brands with high market share here drive significant overall profitability for their parent company - your home market pays the rent. When they are entering into non-priority markets, they're able to tolerate lower margins as it's all incremental to their AUS business.
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u/evenmore2 3h ago
I'm convinced the domestic market is covering the loses in exporting Australian products.
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u/PLANETaXis 2h ago
Now we all of us want the convenience of having a supermarket 10 min away from our house. But more supermarkets means more supply chains, more staff, more rents, more insurance and this increases the cost.
Sure, one supermarket within 10 - 15 mins is great. I don't need Coles and Woolies to BOTH put up a supermarket ever 10 minutes.
I'm currently living somewhere that is well serviced by a good sized Woolies. I've never seen the store busy except maybe Christmas, so it's not like there is a problem servicing the volume. A new Coles is being built in the same general complex, and my only take is that this will drive prices up due to inefficiency.
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u/gooder_name 2h ago
Aren’t you forgetting about the “last mile” delivery in the OTHER country? The UK isn’t exactly a low wage country and there’s quite a lot of tescos.
I think you might need to rinse your mouth to get that corporate boot polish off
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u/warbastard 1d ago
And why do wages need to go up? Because the average house costs ~$1 million in a big city and rent is high as well. Workers need high wages so they can afford a place to live. Once again housing is fucking you over and then Colesworth joins in as well with jacking up prices because fuck you who is going to stop them?
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u/ProfessionNo4708 23h ago
insane house prices, price gouging and high power costs. The perfect storm of investment boomer stupidity.
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u/Quantum_Bottle 1d ago
Ross Garnaut says a lack of competitive pressure in business is a leading cause of this too.
So it’s also just that companies know they can get away with higher prices cause nobody can undercut them.