The owner of the Blockbuster and EzyDVD retail chains, Paul Uniacke, will meet tomorrow with Federal Small Business Minster Craig Emerson to discuss allegations that supermarket giants Coles and Woolworths are using their market power to deeply discount DVD prices.
Uniacke, who owns the Franchise Entertainment Group, is concerned about recent promotions run by Woolworths and Coles that have offered new release DVD titles such as Harry Potter and the Half Blood Prince and Ice Age 3 for as little as $10 when customers spend a certain amount in their stores, usually $80 or $100.
While the grocery giants duel over discounts, Uniacke has accused the grocery giants of “bastardising” the DVD industry in order to lift sales.
“Customers are coming into our stores and saying ‘I can buy this for $5, why I am I getting this from you?’ How do I justify this?”
“We are not worried about fair competition… what we are against is when you are using DVDs to bump up your basket size.”
Uniacke has launched a lobbying blitz to try and get some political attention on the issue. As well as meeting with Emerson, his company is writing to every federal and state parliamentarian to highlight the sector’s plight.
“Really at this stage we’re just putting a case that what’s happening at Coles and Woolworths is just not competition. What can be done we don’t know, but we don’t just want to do nothing.”
Uniacke’s lawyers have also sent a 30-page submission to the Australian Competition and Consumer Commission explaining the issue and alleging breaches of the Trade Practices Act.
“The ACCC has no choice but to get involved at this,” he says.
Uniacke says the DVD tactic has been used by grocery retailers in Britain and claims two of the three largest chains have been “wiped out”. While the Blockbuster chain remains (Uniacke does not own the British business) it has struggled ever since grocery giants entered the market.
He says he remains worried that this latest problem – coming as it does on top of the threat posed by legal and illegal movie downloads – will have a big affect on his industry and his business.
“We are an industry already in decline, so I suppose we always need to be concerned. There is always a fear for us that this could be another nail in that coffin.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
