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COMMENT: Dick Smith Blames Aldi For His Own Failings

Dick Smith loves to be branded an entrepreneur despite being unable to run a profitable food Company, he also loves to blame others and in his latest tirade he has taken a stab at Aldi.

After announcing the demise of Dick Smith Foods, he now claims that the rise and rise of German discount supermarket chain Aldi in Australia has “basically destroyed us”.

He seems to have deliberately missed the point that they have lowered prices for all Australians across multiple categories while also driving a wedge between two Companies Coles and Woolworths who for decades were stripping money from consumers by selling basic products at premium prices.

In an interview with The Australian, Mr Smith said he had no choice but to close his Australian-sourced products business which he started nearly two decades ago. What he failed to mention was that he was unable to compete in a competitive market where prices are being driven down because of competition.

What Smith is trying to claim is that Aldi is flogging cheap overseas products Vs his locally manufactured products.

“It’s very, very sad. I’m depressed about the whole thing. Aldi have basically destroyed us.” He bleated.

Mr Smith repeatedly broke down this morning as he announced the end of the food venture, launched with much fanfare in 2001 with the motto “As Australian as You Can Get”.

He said he’d been forced out by the “extreme capitalism” of global supermarkets like Aldi which had lured Australian consumers with cheap food imports. These are the same food imports that are popular in Germany, France, Spain, the UK and many other sophisticated countries who are fussy about what food they buy.

He then took a stab at Aldi’s manufacturing process claiming that Aldi don’t use Australian peanuts and they don’t even use Australian labour to process the peanuts into paste. Their product comes completely out of Argentina. Some wages in Argentina are at subsistence levels. Imagine the cost (and the fossil fuel energy) of shipping peanut butter from Argentina to Australia, yet they can still sell the product 62% cheaper.” He said.

Really this is a guy who did not give a stuff about cheap Asian labour when it came to selling consumer electronic products. He created house brand components when he was building up the original Dick Smith store which he sold for tens of millions to Woolworths. His products were made in cheap labour factories in Asia.

In a letter sent to Coles boss John Durkan, Woolworths CEO Brad Banducci and Metcash Group CEO Jeff Adams, Mr Smith told them the business would be shut within a year. “Now that I have made the decision to close Dick Smith Foods, we will be winding it down over the next 12 months,” he said.

Mr Smith warned the three Australian supermarket CEOs that Aldi was making both products and the supermarkets themselves uncompetitive.

This was another Dick Smith furphy because Aldi is highly profitable, growing and is anal about the quality of their products for the simple reason that when you sell something cheap you cannot afford to have returns.

Take their relationship with Australian Company Tempo who make the Bauhn TV’s and Sterling appliances sold in their stores worldwide.

Tempo employ over 100 people in Asia checking the manufacturing processes and above all the quality of goods being delivered to their stores. I see that Dick Smith made no reference at his bleeding heat press conference earlier today.

Aldi and their cheap products have been good for Australia as they have delivered growth and jobs.
Their pricing has forced the monopoly of Coles and Woolworth to sharpen their pricing to compete and that is good for all Australians.

As for Dick Smith all he has become is a tired old man who loves to attract an audience. He has struggled to deliver a profitable product and he now wants to whinge about it.

He told today’s press conference that, as “devastated” as he was to have to give up his dream of supporting Australian farmers and food suppliers, at 74 years of age “there’s no way I was going into bankruptcy”.


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