Veteran retailer and entrepreneur Dick Smith has accused Aldi of being “greedy”, and blames it for the current problems of iconic Australian businesses.
Woolworths on Tuesday announced it will end its long-standing canned tomato deal with Shepparton-based processor SPC Ardmona.
And Mr Smith said not to blame Woolworths for the SPC Ardmona disaster, but instead blame Aldi for undercutting the rest of the market.
He said Aldi Australia was now one third the size of Coles and one of the smartest and most ruthless retailers in the world.
“There is absolutely no doubt in my mind that Aldi with its incredibly low overheads — they hardly employ any Australian staff — and its private ownership in Germany — they don’t have the high costs of public listing — will mean they will eventually send one or both of our Aussie shareholder owned food retailers out of business,” Mr Smith said in a statement seen by The New Daily.
“Aldi is one of the smartest and most ruthless retailers in the world. Their greed is unlimited. Aldi Australia is now one-third the size of Coles and they haven’t opened in Australia for charitable reasons,” he said. “They are here to eventually take hundreds of millions of dollars out of our country and repatriate this money to Germany.”
The supermarket giant did not confirm whether it would stick with a five-year canned fruit deal it signed in 2014 that kept SPC Ardmona afloat and saved at least 500 of jobs.
Mr Smith said in the grand scheme, the real problem was “our system of extreme capitalism, with its need for perpetual growth”.
Replicate Aldi or bust
Mr Smith warned Australia’s big supermarkets must follow Aldi’s lead or risk bankruptcy.
“It’s clear that Woolworths and Coles will have to either replicate Aldi, that is, move to around 90 per cent home brand products and reduce their product selection from over 20,000 to just a few thousand, while sacking most of their Aussie employees, or they will be sent into bankruptcy,” he said.
Mr Smith said Aldi’s success with lower food prices will also have implications Australia’s health.
“Of course, as Aldi becomes more successful with lower and lower food prices Australians will become more and more obese with the associated health problems,” he said.
“And who will pay for that? Yes, Aussie taxpayers. Not the Albrecht family in Germany. And Australian parents, don’t think your children will have a ‘first’ job stacking shelves at your local retailer.
“There will virtually be no jobs, as the Aldi formula is designed for very low staffing levels.”
The businessman behind foods that carry his name said Aldi’s cheap prices were also behind Woolworths’ decision to discontinue Dick Smith’s Australian Grown strawberry jam.
He said his strawberry jam sells for $1.61 per 100g, while Aldi’s imported equivalent, St. Dalfour, sells at $1.41 per 100g.
SPC-manufactured IXL jam sells at 72 cents per 100g, while Aldi’s equivalent Grandessa product from Belgium sells for nearly one-third of the price at 28 cents per 100g, he said.
Woolworths on Wednesday said it was in discussions over volumes and prices of other canned fruit for the coming season, something it does every year.