Well, here's an extract from the Senate report. I was wrong about charging city prices; in one instance, they charged 20% below city prices in a rural area (i.e. operated at a loss) for an extended period of time.
As for pricing, this testimony, and others in the investigation, reveal some interesting things about pricing:
http://www.aph.gov.au/senate/committ...report/c06.htm
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6.21 In 1993, South Australian retailer, Mr Mark McLauchlan, saw an opportunity in Alice Springs to open an independent store in competition with Woolworths and Coles. Mr McLauchlan said that his price checks of Woolworths and Coles revealed that there were `very healthy margins and that perhaps we could go in there and make a statement about price and get a share of the business':
So we went in with a 35,000 square footer. I guess the mistake I made was making a big noise about how much cheaper we were going to be than Coles and Woolworths. We applied what was a normal retail margin in an Adelaide metropolitan store but with a freight component added in. We thought, `We know we can run a business on these costs and that at that margin we will make a dollar'. We found that that was substantially cheaper than Coles and Woolworths, so we thought, `Here's an edge', and we really pushed it. Of course, what happened was that Coles and Woolworths overnight dropped their across-the-board pricing on every product in the store to a level that was equivalent to our cost price into the warehouse in Adelaide. [18]
6.22 Mr McLauchlan said that the store is now owned by Coles.
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What is this if not predatory pricing? I can only see significant consumer harm by these actions.
Another thing Australian supermarkets do is lock in with suppliers, including exclusive contracts with various classes of goods. They basically use their oligopoly power to distort both the supply and demand side of the equation, hurting suppliers, hurting local communities, and hurting competition through unscrupulous activities. Also note that this occurring in a large, diverse sector with low barriers to entry AND an oligopoly structure AND the presence of government watchdog with substantial powers to punish blatant offences. This is far from the most conducive environment to monopoly and predatory practices, yet they're happening to a significant degree. And similar thing was reported in the UK some years ago.
So, I find Borodog's assertion that predatory pricing is a myth, kind of bizarre. Common sense alone should tell that such business practices will occur and will work, at least in some markets and some classes of good.
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I'd rather deal with minor supermarket monopolies than huge bureaucratic government monopolies that I have next to no ability to avoid.
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This is but one examples of the actions of unrestrained businesses, and was only in response to Borodog's nonsense assertions about predatory pricing. This is far from the most significant example of how markets can and are distorted by the powerful to the detriment of all.