Woolies insider

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The smoking gun that unravels predatory pricing, an ex- Woolworth's manager, backs up a two-year investigation into price undercutting in the fruit and vegetable game by Australia's largest retailer.

Mark Thompson's a fruit and vegetable super-grass, a Woolworths insider, an ex-boss who turned his back on the company in disgust but is now blowing the whistle on how the supermarket giant takes on and takes out its competition.

"We had to increase our price by probably 30% to offset the loss at the Ashmore store and this was on a regular basis," Thompson said.

"They definitely undercut, if it was just a case of matching the two stores would be competitive, then they'd go under, the opposition forced to come down to a point where they can't exist."

"It was discussed at the meetings, how much we had to do it, and that was set by the area manager, when it was worked out what he needed to cover the loss at that particular store."

Thompson was an employee of Australia's largest retailer for 26 years, now a fencer, he says the supermarket he managed at Runaway bay on Queensland's Gold Coast was part of a cabal of stores that worked together to wipe out one small operator.

"And this was an ongoing process until the fruiterer went bankrupt," Thompson said.

According to Thomspon, the supermarkets at Harbor Town, Runaway Bay and Australia Fair marked up fruit and vegetable prices by as much as 30 per cent while Ashmore Wooloworths heavily discounted.

"At that time we were asked to increase our prices on bananas, at the Runaway Bay store and at other stores in the surrounding area, by the area manager to offset a loss where he was selling product at a below cost price to harm the local competitor with the view of putting him out of business," Thompson said.

This was what seemed to be happening to Peter Chahoub two years ago went he went to the wall helping Today Tonight illustrate how Woolworths was undercutting him.

Rugby League legend Mel Meninga and business partner Gary Grienke approached Today Tonight with a similar story.

Today Tonight found the Woolworths at Taigum next to Meninga fresh was selling rockmelons, pak choi and pumpkins far cheaper than two other nearby Woolworths and far cheaper than Meninga fresh.

Further investigation has revealed price differences at Taigum Woolworths.

Delicious apples at Taigum Woolworths are $2.44 a kilo, at both Carseldine and Nundah Woolworths, they're $3.96. Granny Smith apples come in at $2.44 verses $3.94. Navel oranges are $1.32 versus $2.96. Pears $1.98 versus $3.84. Sweet potato $1.48 at Taigum, $1.98 at Carseldine and $3.68 at Nundah. Carrots 98 cents at Taigum, $1.33 at the other two, and broccoli is $2.32 compared $3.98.

What's the difference between the three stores? Only Taigum has the small independent Meninga Fresh as competition.

"The area manager had a sole purpose of getting rid of him, that was the end of the story," Thompson said.

Woolworths' Clare Buchanan insists prices differences reflect issues of supply and demand to different stores.

"The prices of groceries in Woolworths stores have always been set on a regional basis and not store by store," Buchanan said.

"We have a policy which makes it clear that store managers cannot increase prices beyond our standard low prices."

"Our store managers only have the ability to reduce prices to clear excess products and compete with other retailers," Buchanan said.

Eventually Mark could no longer bear it, walking away to find a job building a small business rather destroying them.

"Not only was it victimisation to independents to put them out of business, but also victimisation to the staff and I wasn't going to be a part of it," Thompson said.

"I don't think it's fair competition because that was with regards to undercutting the local independent, it really is a David and Goliath battle."