Below is the actual report, its eight pages, and really undercooked. Its more like a university report than any kind of plan.

Fair Go Grocers The plan to smash the supermarket duopoly Patricia Arcilla & Max Chandler-Mather 6 October 2026

At best, and I mean at absolute best, this is a conversation starter, not a plan. My worry is they haven’t gone into enough depth for such a big policy that the ‘serious’ stakeholders in this area will laugh it off and easily dismiss it with industry based arguments those familiar with the industry may know.

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My critiscism.

In its current form a plan like this will fail, and the cost will be hung over the neck of a Greens led government going forward.

• 5 years to build out a system of ~600 new supermarkets would be a herculean and unnecessary effort. I don’t believe it would be done in anywhere near that short a time period, which would blow the report’s revenue assumptions.

This is a massively expensive investment in new and seized fixed capital with large ongoing maintenance costs that at best adds a ‘slow lane’ to the Australian food network’s ‘food delivery highway’. There are smarter ways to achieve the results wanted without causing supplier induced demand.

For those who are interested, supplier induced demand.

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It will lead to farmers over producing, or higher levels of imports, to satisfy the demands for vegetables from established grocers and the added Fair Go supermarket chain. We’ve seen this with Aldi’s introduction to the Australian grocery chain landscape.

It will be required for all supermarkets to remain at a decent level of stock, while that level may be lower than before. And there is always a level of wastage at store level, that level of wastage will be increased by these added supermarkets.

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The Fair Go chains will be used by farmers as a dumping ground for their poor quality produce, which is great for them, but increases the cost in the cost/profit ratio to those Fair Go stores. This would force the government run stores to cutback in increased areas lessening the accessibility of those stores in incremental but important ways. This leads to a medium term negative feedback spiral, having a noticeable effect on the customers’ engagement with that store. Old, poorly looked after IGA’s are an example of this, people won’t shop there due to the ‘ick’ factor. The only salvage would be they cheaper, but will yhey be cheap enough for the perceived quality? Spudshed may be a positive indicator here, but they have a measure of vertical control over their fresh food. I think this problem will lead to an unexpected decrease in this plans expected revenues due to reinvestment in the stores becoming more diffficult as time goes on.

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The last two paragraphs are about ongoing burdens that could only be shaken off by becoming more competitive, but that would mean sacrificing profitability (likely no longer pay for themselves with their own revenues) to maintain the 25% price discount. There are existing examples in each paragraph that demonstrate the resulting problems the Fair Go stores would create and face.

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What we’re talking about is a market design problem. First thing I think we should do as a nation is call Alvin Roth for help. ;)

But now for a few of my suggestions,

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##Food Vouchers##. Its boring, but they can work. The aim is actually to increase access to fresh, healthy food, not to be a competitor to ColesWorth. The delivery system is already established, but the access to that is quarantined by the width of your wallet. Food vouchers could be triggered automatically by the ATO by flagging a combination of things like location, income, number of dependents, etc, in the yearly lodgements.

Food Vouchers could appear as a direct transfer payment at regular intervals (weekly, monthly) across the course of the financial year based on the expected cost difference that tax payer, in their situation, would be paying for the average basket of fresh healthy produce.

The above design is fairly liberal and places faith in the recipients to spend the money in the intended way. Other methods such as welfare cards that can only be used at certain kinds of stores have been trialled in indigenous communities that have had alcohol abuse issues, those may be another, more conservative, road to go down. And I’m sure theres other less onerous safeguards and nudges for wise spending that could be employed.

This would largely solve the problem for areas with existing ease of physical access to fresh, healthy food. But there are lots of communities without fair access to cheap, fresh, healthy food.

##Fair Go Shelves## these hard to reach areas are low access because Australia’s food delivery system isn’t built for them. But we don’t need to reinvent the wheel by establishing a whole new system of distribution and supermaket centres. The distribution centres are there, the shops are there, its the incentive to extend the system to get the fresh, healthy food to those shelves that isn’t.

Fair Go Shelves could be the PBS for our food, basically a subsidy scheme for putting that extra pallet of fresh food on the truck or plane to the hard to reach areas and then selling them at metro prices.

A mix of these two ideas could likely have better results than ~600 new stores could, it is also a kore dynamic solution that lends itself to alterations more easily.

However, it is also more easy to phase down, or completely remove were a hostile government to be elected. The only solution I could offer there are the political costs detering hostile governments from that course of action, meaning it would need to be a policy thats broadly popular, and well liked in the electorate.

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So i’ll try to conclude,

I’ve spent a couple hours on my sofa finding three points of failure in the Fair Go Supermarkets Plan. I’m sure, unfortunately, there are many more that others may highlight.

1. Adds an unnecessary and wasteful initial budgetary outlay for a ‘slow lane’ to the Australian food delivery system highway.
2. Supplier induced Demand. Farmers and importers will be incentivised to deliver more produce to market at a more varied quality than before due to the price floor. 25% lower than ColesWorth. Increasing operational costs.
3. ‘Ick’ factor, due to cost cutting will decrease revenue. Rich and poor alike want to shop in a nice place where they have ease of access to the food ranges they want.

On the other-hand, if the Fair Go Supermarkets plan is simply meant as a conversation starter about our supermarket and food delivery system. Then the Green Institute has been wildly successful with me, as evidenced by this long commentary on their plan.

Then I’ve identified the crux of the solution that the Fair Go Plan failed to identify,

##Its a Market Design problem##

I’ve had a quick go at some alternative suggestions,

1. Automatic Food Vouchers based off combination of the annual tax lodgement details.
2. Fair Go Shelves, a PBS for Outback greens… and other fresh foods. (The ‘Green’ marketing writes itself for this one).

Finally, now we know the problem, (market design) seriously we should contact the professionals. Market design is an undervalued part of the solution to so many of our problems. Whether its in democratic delivery, food delivery, or money markets, most of the problems we could largely solve by redesigning and maintaining the markets delivering these inputs to our complex liberal democracy.