COMPETITION – AUSTRALIA

Costco to float online and watch pennies fly

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 23-Aug-17

Costco will boast nine stores in Australia when its third store in Sydney opens in late August. The discount retailer intends to compete directly with Amazon.com in the local market, with plans to expand into online retailing within the next 18 months. Costco Australia MD Patrick Noone says the online store will enable the company to target consumers in regional and rural areas who do not have ready access to its warehouse-style outlets. Online sales now comprises 5-6 per cent of Costco’s overall sales in the US.

CORPORATES
COSTCO WHOLESALE AUSTRALIA PTY LTD, COSTCO WHOLESALE CORPORATION, AMAZON.COM INCORPORATED, MYER HOLDINGS LIMITED – ASX MYR, DAVID JONES LIMITED, WOOLWORTHS LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD, METCASH LIMITED – ASX MTS, BUNNINGS GROUP LIMITED, OFFICEWORKS SUPERSTORES PTY LTD, JB HI-FI LIMITED – ASX JBH, SUPER RETAIL GROUP LIMITED – ASX SUL, MORGAN STANLEY AUSTRALIA LIMITED

Retailer Godfreys sucks it up and goes back to basics

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Original article by Simon Evans
The Australian Financial Review – Page: 26 : 18-Aug-17

Vacuum cleaner retailer Godfreys Group has posted a 2016-17 net loss of $A18.4 million. Revenue declined by 2.9 per cent to $A174.1 million, while 22 of its company stores were converted to franchise outlets during the year. Analysts see Godfreys falling behind stores like JB Hi-Fi and Harvey Norman in the $A1.3 billion Australian vacuum cleaner sector, while the pending arrival of Amazon presents another challenge for the group.

CORPORATES
GODFREYS GROUP LIMITED – ASX GFY, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, AMAZON.COM INCORPORATED, WERTHEIM SCHRODER AND COMPANY, HOOVER (AUSTRALIA) PTY LTD, DYSON INDUSTRIES LIMITED

Calls to rein in ABC and SBS

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Original article by Darren Davidson
The Australian – Page: 24 & 26 : 31-Jul-17

Media industry executives have expressed concern that the ABC and SBS are increasingly competing directly with commercial rivals for content and viewers, and urged the Federal Government to step in to ensure that the public broadcasters adhere to their charters. Criticisms of the ABC and SBS include the fact that they are not subject to the same media regulations as their commercial rivals and that SBS is using taxpayers’ funds to outbid commercial networks for US content.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, SPECIAL BROADCASTING SERVICE (SBS), NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, FAIRFAX MEDIA LIMITED – ASX FXJ, SEVEN WEST MEDIA LIMITED – ASX SWM, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, TEN NETWORK HOLDINGS LIMITED – ASX TEN, AUSTRALIAN ASSOCIATED PRESS PTY LTD, STAN ENTERTAINMENT PTY LTD, FOXTEL MANAGEMENT PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, MELBOURNE PRESS CLUB

SBS driving up prices, says Nine

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Original article by Darren Davidson
The Australian – Page: 5 : 21-Jul-17

Nine Entertainment Company CEO Hugh Marks has told a parliamentary inquiry into Australia’s film and TV industry that the cost of buying overseas TV programs has risen due to competition from public broadcasters. He said SBS in particular is outbidding commercial networks for international content, and he has questioned the relevance of some of these programs to SBS’s charter. Meanwhile, the Ten Network has urged the Federal Government to abolish content quotas for children’s TV programs.

CORPORATES
NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, NINE NETWORK AUSTRALIA LIMITED, SPECIAL BROADCASTING SERVICE (SBS), TEN NETWORK HOLDINGS LIMITED – ASX TEN, AUSTRALIAN BROADCASTING CORPORATION, SCRIPPS NETWORKS INCORPORATED, GOOGLE INCORPORATED, FACEBOOK INCORPORATED, NETFLIX INCORPORATED, APPLE INCORPORATED, AMAZON.COM INCORPORATED

Tax good for competition: Morrison

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Original article by Andrew Tillett, Jacob Greber
The Australian Financial Review – Page: 3 : 14-Jul-17

Treasurer Scott Morrison had claimed that limiting the Federal Government’s bank levy to the five major banks would boost competition in the banking sector. However, smaller banks have been increasing their interest rates on higher-risk products such as interest-only loans. Shadow treasurer Chris Bowen says Morrison’s claim that the levy would enhance competition is "complete rubbish".

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MOODY’S INVESTORS SERVICE INCORPORATED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MORTGAGE CHOICE LIMITED – ASX MOC

Competition inquiry looks into access to finance

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 13-Jul-17

A Productivity Commission inquiry into competition in the financial services sector will be wide-ranging but focus on banks. It will examine factors such as the effect of banks’ vertically integrated business models on competition and whether consumers ultimately receive the benefits of innovation in the sector. Submissions to the inquiry must be lodged by 15 September, and the Commission’s final report is slated to be completed by mid-2018.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKERS’ ASSOCIATION, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, SUNCORP GROUP LIMITED – ASX SUN, ME BANK, KING AND WOOD MALLESONS

Competition ‘is not appropriate for super’

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Original article by Sally Patten
The Australian Financial Review – Page: 15 : 11-Jul-17

Australia’s retail superannuation funds argue that fees would be lower and there would be more product innovative if there was increased competition in the default super sector. Nicholas Barr, the professor of public economics at the London School of Economics, argues against allowing more competition in the case of complex financial products, as many consumers lack the time or skills to fully assess such products and decide which is most suitable for them.

CORPORATES
LONDON SCHOOL OF ECONOMICS, FINANCIAL SERVICES COUNCIL, AUSTRALIA. PRODUCTIVITY COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Jungle king tears into groceries

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Original article by John McDuling
The Australian Financial Review – Page: 1 & 8 : 19-Jun-17

Robert Luciano of VGI Partners says Australian retailers should be concerned by Amazon’s purchase of grocery retailer Whole Foods. Amazon announced on 16 June 2017 that it will acquire the US grocery retailer for $US13.7 billion ($A18 billion), and that Whole Foods will continue to trade under its current name. Luciano suggests that the purchase represents a major evolvement in Amazon’s business model. Amazon is due to commence operating in Australia in 2018, and it is expected to have a major impact on the earnings of local retailers.

CORPORATES
VGI PARTNERS PTY LTD, AMAZON.COM INCORPORATED, WHOLE FOODS MARKET INCORPORATED, SOUQ, MACQUARIE GROUP LIMITED – ASX MQG, AMAZON WEB SERVICES LLC, UBS HOLDINGS PTY LTD, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN

Wesfarmers faces hit from Amazon

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Original article by Sue Mitchell
The Australian Financial Review – Page: 22 : 2-Jun-17

Morgan Stanley forecasts that Amazon’s entry to the Australian market could slash Wesfarmers’ earnings by more than $A400m a year by 2026. The firm expects the Kmart and Target discount department stores to be more vulnerable than specialist retailers such as JB Hi-Fi. Morgan Stanley has reduced its valuation for Kmart and Bunnings, while it now has a zero valuation on Target. It share price target for Wesfarmers has been downgraded from $A41 to $A36.

CORPORATES
WESFARMERS LIMITED – ASX WES, AMAZON.COM INCORPORATED, MORGAN STANLEY AUSTRALIA LIMITED, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, BUNNINGS GROUP LIMITED, JB HI-FI LIMITED – ASX JBH, SUPER RETAIL GROUP LIMITED – ASX SUL, MYER HOLDINGS LIMITED – ASX MYR, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS SUPERMARKETS

Don’t believe Google, this monopoly is not journalism’s friend

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Original article by Michael Miller
The Australian Financial Review – Page: 37 : 31-May-17

Google Australia MD Jason Pellegrino claims that news publishers can withdraw their content from Google News and Google Search at any time. Google’s 95 per cent share of the search market in Australia means that this is not an option. This market dominance means that local publishers are highly dependent on Google to distribute their free content and drive traffic to their websites. Meanwhile, Google is seeking to deter publishers from offering subscriber-only content, as this affects its own advertising revenue. Media reforms are necessary to ensure a level playing field for local news publishers.

CORPORATES
GOOGLE AUSTRALIA PTY LTD, GOOGLE INCORPORATED, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS