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Woolworths, market power and consumer choice


Against the backdrop of the Federal Court imposed fine of $8.9 million against Woolworths in a long running price fixing case…

Samsung 1610 has released a new computer printer. It’s available exclusively through Dick Smith (Woolworths owned) stores. What is not made clear to consumers at the point of purchase is that toner for the Samsung printer is not available anywhere except through Dick Smith.

One of my businesses, Inkfast, sells ink and toner online. We have excellent wholesaler relationships. None of our wholesalers has been able to supply the toner for the Samsung 1610 printer. One wholesaler, who deals direct with Samsung, advised us that they understood there to be an exclusive deal involved because they are unable to source toner for this printer.

While Woolworths (aka Dick Smith) is welcome to negotiate special deals on printers, it is unreasonable to restrict access to the fuel, toner, for these devices. Toner is where you make the money long term and a deal providing Woolworths exclusive access to toner for the Samsung 1610 for even a short period of time is bad for consumers as it does not deliver the same price pressure as if the toner is available elsewhere.

On the back of yesterday’s Federal Court loss, Woolworths and Samsung ought to reconsider their position on this. Woolworths makes considerable noise about being consumer friendly and socially responsible yet its actions on matters such as this demonstrate otherwise.

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By Mark