Convenience & Impulse Retailing Article
Category: Forecourt & Fuel
Issue: Sep/Oct 2010
Our Independence Day
Finally, Julia Gillard and Tony Abbot are feeling the same pain that owners of small-to-medium sized businesses already know. They have taken a risk in going to the polls (much like those who go into business), put in a lot of hard work, and now have to rely on politicians to decide their future.
Australia had a 'hung' parliament the first since the 1940s surprisingly creating a situation that could benefit regional communities, the petroleum distribution and petrol convenience industry, and other independent businesses.
Finding the best solution
Parliament is no longer a duopoly. Competition through the emergence of several independents will put pressure on the major political parties to find the best solution; not just their solution. The key to unlocking this potential is not to look at the independent kingmakers as a single voting bloc, but consider their individual priorities.
Ours is a complex industry: exploration and refining, refined supply, dangerous goods transport, storage, aviation fuels, biofuels, wholesale pricing, petrol convenience retailing, lubricants and credit provision. We are also small-to-medium sized business operators that face the broader issues of predatory conduct, taxation, superannuation, employment regulations, and more.
It is interesting that many of the views of the independents are in alignment with our own those changes we have been advocating for years.
Bob Katter, member for Kennedy in Queensland, is probably the best known of the three. Mr Katter has called for American-style antitrust laws to keep in check the dominant market share of big businesses. He has also suggested that Canberra set a minimum retail petrol price to protect independent petrol convenience operators.
In testimony at the ACCC Grocery Price Inquiry Hearing April 2008, he commented that previous governments had done nothing to curb the 'greed' of big retailers like Coles and Woolworths. At the same hearing, he suggested that parliament, through the Sites Act, had limited the four major oil companies to 420 outlets. However, when Woolworths and Coles did the deals with Caltex and Shell, they took control of 1060 sites in one hit. He is quoted as saying: " so one government delivers 1060 sites. The other government says you're restricted, all four of you, to only 420 sites."
Tony Windsor, member for New England in New South Wales, is all for the protection of independent business and has similar concerns about deregulation and competition policy in regional Australia. Mr Windsor, in his first speech to parliament in 2002, explained that, " some of the rules applying to competition policy, with its economic rationalist approach on many of these issues, have no flexibility in regard to smallness, distance and remoteness."
Whether it is fuel policy or health policy, he believes that the basic framework has left regional Australia wanting. In 2004, he welcomed the Productivity Commission Inquiry into National Competition Policy, suggesting that governments when making competition decisions, consider other factors apart from the lowest cost to the consumer.
Mr Katter and Mr Windsor are both opposed to a carbon price. However, Mr Windsor has supported ethanol in fuel as a 'climate change solution' and a 'boost for grain growers'. Mr Katter, whose electorate covers a large proportion of the sugar industry, believes ethanol will provide cheap petrol. However, it is regional independent fuel distributors and retailers the ones that will make ethanol happen in regional Australia, especially the implementation timeframes, infrastructure financing and limited supply that need consideration.
Tax & other reforms
Tax reform is also high on the agenda, especially with Rob Oakeshott, member for Lyne in the north coast region of New South Wales. He believes the Labor Government sold out to the mining companies when it backed down on the Resources Super Profits Tax. Mr Oakeshott is also looking for more of the Henry Tax Review to be implemented by the Australian Government. He explains that Australian would have a 'good thing going' if parliament turned the work of 'eminent' Australians into public policy. Mr Katter and Mr Windsor are also in favour of tax reform, both advocating a zonal taxation system to attract businesses and families to regional areas.
When it comes to industrial relations, these independents seem to favour the employer. Bob Katter supports the right of employers to dismiss underperforming employees, while Rob Oakeshott has worked against Fair Work Australia's 3-hour minimum shift requirements for employees.
Creating a workable parliament with these three strong, independent, regional leaders will not be easy for either Julia Gillard or Tony Abbot. Like the operators of small-to-medium sized businesses, whoever is anointed will need to work at looking after for all their customers this will require exceptional skills.
Nic Moulis is the General Manager of the Australasian Convenience and Petroleum Marketers Association (ACAPMA). ACAPMA is an employer association representing the interest of distributors and retailers in the Petrol and Convenience industry.