Editorial: This duopoly leaves everyone shortchanged

The decision by supermarket giant Woolworths to stop selling Kooka’s Country Cookies outside of Victoria and Tasmania is a bitter blow to the Donald-based company.

Kooka’s, a company regularly visited by Ballarat people, was one of the rare wholly Australian-owned and operated food manufacturers that still commands a presence on the shelves of our two biggest supermarkets.

Established in 1994, the company has grown to employ about 28 people at its Donald headquarters – a significant number given the town’s entire population totals just 1700.

Precisely what effect Woolworths’ edict will have on Kooka’s operations is not yet clear – at least publicly – but one sincerely hopes it does not lead to job losses.

Putting parochialism aside, as difficult as it may be, it is possible to understand why the supermarket has made this call.

More than 90 per cent of the biscuit maker’s sales emanate from stores in Victoria and Tasmania, according to a Woolworths spin doctor.

Therefore, it makes little business sense to stock stores in NSW, Queensland, Western Australia and South Australia with biscuits their customers clearly have no appetite for.

What the decision does expose is how damaging the duopoly of grocery behemoths Woolworths and Coles can be for small, local manufacturers. 

In 2016, Woolworths held 36.3 per cent of the grocery industry’s market share, while Coles was just behind on 33.2 per cent.

Together, shoppers spent an astonishing $62.4 billion of the country’s entire $89.8 billion grocery spend at one of these two stores.

If Woolworths and Coles stock your product, you have it made. If not, then it can be an almightly struggle getting it out to enough people to make it a success.

The aisles of Woolworths and Coles are dominated by the products of once Australian-owned, now overseas-owned, companies.

Arnott’s, Cottee’s, Peters, Streets, Allen’s, Uncle Toby’s and even Chiko Roll are just some of the brands now controlled by offshore interests, while many once iconic products we grew up with have ceased to exist altogether.

That there is such an unhealthy concentration in this country’s grocery sector means there are fewer opportunities for local manufacturers and fewer choices for consumers.