Bunnings accused of abusing market power
David Woodman: How are you today ma'am?
Customer: I'm well, how are you today?
David Woodman: I am very well thank you. What can I do to help you?
Emilia Terzon : David Woodman's family has owned hardware stores for generations. This one on the outskirts of Brisbane is under threat.
Katherine Mingin: Bunnings have bought the property next door and have advertised or put in the newspapers that they're going to build a 15,000 plus square metre box next door to us.
Emilia Terzon : Bunnings says that its store will enhance competition in the Jimboomba region, but David Woodman thinks it will decimate his profits.
Katherine Mingin: Being a small family business we can't sustain that so we'd probably end up shutting the store.
Emilia Terzon : While Bunnings can legally set up next door to his Mitre 10, a Four Corners investigation has found that Bunnings is using clauses in its leases to block rivals setting up near its stores. Suppliers have also come forward with fresh allegations of being treated badly by the hardware giant. For eight years George Mingin and his wife Katherine supplied live worms to Bunnings, only to be dumped when they asked for a price increase.
Katherine Mingin: We ended up putting a lot of hard work for absolutely no gain whatsoever. In fact we've lost everything that we put back into the business simply to supply Bunnings.
Emilia Terzon : Professor Clinton Free from the University of Sydney questions whether Bunnings has simply become too big.
Clinton Free : It's an enormous success financially but it also starts to raise big questions about market power.
Emilia Terzon : Market research firm IbisWorld estimates that Bunnings' parent company Wesfarmers controls a third of the retail hardware market while one rival says the figure is double this. Bunnings disputes both estimates.
Clinton Free : Bunnings has managed itself very skilfully through flying under the radar a little bit, having a very trusted brand. That has meant that it's not been subject to scrutiny in the same way that for example Coles and Woolworths have.
Emilia Terzon : The competition watchdog has also had its eye on dodgy discounts. Four Corners has found there is a large caveat around Bunnings' famed price match guarantee.
Bunnings advertisement: Citeco ladder, $159. Where you find a competitor's lower price on the same stocked item, we'll beat it by 10%.
Emilia Terzon : But good luck finding that Citeco ladder anywhere else because it's a home brand. Bunnings now sells around 9,000 home brand products. Matt Steen from Consumer Advocacy Group Choice says that even some of the barbecues are Bunnings' home brand but as a shopper, you'd never know it.
Matt Steen : There's nowhere on the packaging or on the products themselves that actually says it's a Bunnings only product. I think Bunnings should basically make it more transparent about how people can actually get that 10% guarantee, realistically get it, which is not including their home brand products. And so incorporation of some kind of labelling into their packaging and products would be really useful.
Emilia Terzon : In a statement, the ACCC told Four Corners that home brands could be misleading or deceptive if they are marketed as though they are produced by a third party. Bunnings says it complies with all legal and regulatory requirements that apply to labelling and it applies its famed price match guarantee on like-for-like items. The company declined an interview with Four Corners. In a statement, it said it has a genuine commitment to value, service and fairness.
Sabra Lane: Emilia Terzon reporting there and you can see the full Four Corners episode, 8.30pm tonight on ABC TV or anytime on ABC's iView.
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