Dick Smith lashes out at Aldi: “When will enough be enough?”
Aussie entrepreneur Dick Smith has slammed Aldi, calling out the German supermarket chain for sucking wealth from Australia.
Mr Smith wrote an open letter to the discount retailer’s owners Karl Albrecht Jnr and Beate Heister, after Aldi was named the most trusted brand in Australia and our most profitable supermarket chain.
Mentioning how Aldi is employing less staff per dollar turnover compared to Australian owned supermarkets, Mr Smith asked: “When will enough be enough?”
In his letter, he asked if the owners have plans for “endless expansion” and continual price reductions.
He wrote: “Will these goods, just like your peanut butter, come from countries like Argentina where wages are extremely low?
“Won’t this mean our Australian farmers and food processors will never be able to compete with such low prices?
“You are privately owned, so it is not possible for Australians to share in the wealth creation of your company, and you also don’t have the costs of publicly listing on the stock exchange which would result in the employment of many additional Australians.”
Mr Smith highlighted how supermarkets such as Coles, Woolworths and IGA were predominantly Australian owned, with tens of thousands of Aussie shareholders.
He said Aldi’s “phenomenal success” had taken away billions of dollars of business from existing Australian owned companies.
Mr Smith recalled his conversation with Aldi’s chief executive in 2000, then Michael Kloeters, who revealed why Aldi was opening in Australia.
Mr Smith said he was told: “Dick, in Germany if we don’t keep expanding we would be going backwards. Our plan is to expand throughout the world.”
In his letter he also mentioned Australia’s unemployment rate, saying that less Aussies would be employed because of the German company.
“We already have a problem in Australia,” he said.
“We have 14 per cent youth unemployment and over 20 per cent youth underemployment — that is, where our young people can’t get a proper full time career.”
He said the discount retailer was “basically sharing wealth less”.
“Your father, who started the great expansion of the company, worked out that by having a lesser selection of products, you could therefore employ less workers,” he said in his open letter.
“This would result in lower prices and higher profits.
“This plan has worked incredibly well in Australia. So well that the larger Australian owned supermarkets are criticised by many, while your company is praised.
“I have an important question to ask you. When will enough be enough?
He also accused the brand of going against Australia’s tradition of openness and being secretive.
“Can I ask why you are so secretive? Surely being worth $30 billion US dollars (that’s $40.63 billion Australian dollars) you have a responsibility to be open and explain your long term plans to all those who are affected.”
Aldi Australia chief executive Tom Daunt responded to the letter, saying that the company employs more than 11,500 Australians and partners with more than 1000 Aussie suppliers.
“We continually refine our exclusive brands together with our suppliers while supplementing these with other popular national brands,” Mr Daunt said.
“As a privately owned business we have never sought to ‘maximise’ profits at the cost of something or someone else. Rather, we opt for long term sustainable growth strategies.
“We are proud to have influenced the entire grocery sector, which has led to price deflation benefiting all Australian shoppers.
“Our estimates suggest that we are saving Australians more than $1.5 billion per year.
“This is money that is returned to the economy for bills, holidays, education and other vital expenses.”
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