Wesfarmers chief executive Richard Goyder has hit out at Aldi, claiming the discount supermarket chain is not paying its fair share of tax.
“I think someone should go and have a good look at how much tax Aldi pays in this country because I suspect they’re very profitable,” Goyder told the American Chamber of Commerce in Australia in Melbourne yesterday.
Fairfax reports Goyder said new entrants to the Australian market should be on the same “playing field” as Coles, which Wesfarmers owns, and Woolworths.
“They should be paying corporate tax in Australia, they should be very transparent”.
Mystery surrounds Aldi’s taxation arrangements in Australia because it has registered its Australian business as a limited partnership, known as Aldi Stores.
Aldi Stores is one of just 3400 limited partnerships with an ABN in Australia.
Limited partnerships are not required to disclose their accounts to the Australian Securities and Investments Commission although they are still required to lodge tax returns.
Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany Coles is clearly starting to feel the heat from Aldi.
“Everything Mr Goyder says may well be correct but would he be saying these things if Aldi wasn’t having the success it is having?” he says.
“Mr Goyder is one of the best CEOs in the country but he can’t escape the fact Aldi is making inroads into the Australian supermarket sector.”
Walker says Aldi is expanding aggressively and performing well, which is clearly hurting the existing supermarket duopoly.
“If you look at Woolworths and Coles, one of the challenges they have at the moment is keeping and maintaining their profit margins, which are world best,” he says.
“The challenge is to keep these margins in the face of heavy discounting and competition.”
Aldi continues to grow its market share in Australia with a Moody’s report earlier this year showing an increasing acceptance of the German supermarket chain by Australian consumers.
Moody’s estimates Aldi holds 8% of the local market, whereas Woolworths has 37% and Coles has 26%. Metcash is estimated to have 11% of the market, with another 18% made up of “other” retailers.
But Moody’s predicts Aldi’s market share will continue to increase as a result of its aggressive expansion plans.
SmartCompany contacted Aldi for comment but did not receive a response prior to publication.
Written by Cara Waters, first published on Smart Company on 23 June 2015. Click here for original article.