This is subject to The Coca Cola Company not using its last offer rights, which it holds for 90 days.  It would be a hard road for the guys from Atlanta to get the business with the ACCC having a close look at the Schweppes bottling arrangements for the Pepsi brand.

The cash sale price of the business is £550 million ($A1.19 billion), which is sightly more than market expectations.

Asahi Breweries

The Age reported that:

BusinessDay believes that unsuccessful bidders included Suntory, the Australian-based Coca-Cola Amatil (which has Coca-Cola as a 30 per cent shareholder) and P&N Beverages.

So I was close but no cigar.

Tim

• Woolworths cheapest on total grocery basket in 59 of 61 regions (up from 21 last month)
• Nationally, the price difference between Coles, Woolworths and Independents has narrowed
• ALDI cheapest on basic staple products

By the way this is what they do;(from the web site)

“Price information is obtained from an independent monthly survey of approximately 500 products from 600 supermarket outlets across Australia. The results of each monthly survey will be made available on the GROCERY choice website on the first business day of the following month.”

So lets examine the news from this month.

Woolworths Cheapest in 59 of 61 regions

This is a massive turnaround from last month where they were cheaper in only 21 of the total regions. Does it mean anything though? Coles won the first two surveys and now Woolworths has won this one.

The flaws in the survey are many, and not limited to the points below;

• No individual supermarket is measured
• The data is not dated so it might be 3-4 weeks old even on the day it is released and by the end of the month it could be 8-9 weeks old.
• Promotional price points change week to week and have a massive impact on the basket price
• Like for like product comparison are difficult to make with retailers ranging exclusive products and increasing numbers of Home brands.

Nationally the price difference has narrowed

It is nice of the ACCC web site to tell us this analysis on the front page headline, but there is no link through to the detail or the comparison number, just the Headline.

We may believe them, but;

• We don’t know how much it has narrowed by
• Was it uniform across the states
• How does each state as a total vary

Unless you printed off the results for each region for the past two months you can’t do any analysis. The website just shows the current data. How hard would it be for them to do that, not very.

The government is trying to push Unit Pricing to make the supermarkets more transparent with their pricing, but the governments own website on pricing isn’t even being transparent and doesn’t give access to the history. Bit of a double standard here.

ALDI cheapest on basic staple products

Well blow me down with a feather. Was it an economic guru at the ACCC that came up with this revelation. I thought this was rule number one on the ALDI business model, but no we needed the insight from the ACCC to let us into this secret.

I personally don’t hold out much hope for the future of Grocery Watch in its current format, but have a read of these headlines and decide yourself;

Grocery Choice a big flop – SKY NEWS Oct 1, 2008

Grocery Choice still a farce: Expert – Smartcompany.com.au Sept 3, 2008

Rural consumers not helped by grocery choice site – ABC.net.au Sept 4, 2008

Grocery Choice website does nothing – Channel Seven News Oct 1, 2008

Any one using it, or any other comments?

Tim

“Hardware group, Mitre 10, staged its annual convention on 23 September 2008. The organisation’s CEO, Bernie Bicknell, claimed that in the past 12 months, a lack of funds prevented the company from purchasing about half a dozen strongly performing stores. Bicknell reaffirmed that Mitre 10 is considering options such as an outright trade sale or a capital injection”

Well I believe it may well be Metcash who is the preferred bidder or injector. The complex franchise structure of Mitre 10 is proving a bit too much of a challenge for the Corporate Heads at Woolworths and they are getting cold feet. Without ultimate control of the entity they think it will be too hard to turn around this loss making network. Metcash on the other hand has the buying experience and understands the challenges of dealing with individual owners at store level.

The numbers being talked about are between $730m to $1billion for an outright purchase but I think this is the most unlikely outcome. A capital injection into the business by Metcash and management and buying integration seems the best outcome for all parties.

On another front the ACCC has woken up to the fact that Wesfarmers‘ purchased five Mitre 10 stores over the past 2 years. This must have come from them sniffing around the Mitre 10/Woolworths talks. Anyway they may request that Wesfarmers divest these stores in the near future.

Watch Singapore for the next move in Woolworths’ expansion!

Tim

Mitre 10 has been struggling for the past decade to have an impact in the Hardware channel, particularly in metropolitan areas. The Australian Financial Review has reported that Mitre 10 and Woolworths are in discussions regarding a capital injection or outright purchase of entity.

The AFR also indicates that Mitre 10 will be holding a shareholders meeting during its National Convention next week on the Gold Coast. With the vast majority of shareholders in attendance this is an ideal opportunity to present a restructure or buyout proposal.

Hardware should not pose any ACCC issues for Woolworths as this is one of the few areas that WOW do not participate in in the Australian market.

Tim