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Nelson's petrol tax cuts are a bad idea (Read 43454 times)
Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #180 - May 29th, 2008 at 10:01pm
 
You have to remember that they are not producing the product. They dont have to pay extra production costs to sell higher volume at a lower profit margin. They are just retailers taking a small profit on every litre sold.
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #181 - May 29th, 2008 at 10:08pm
 
deepthought wrote on May 29th, 2008 at 9:59pm:
Alex wrote on May 29th, 2008 at 9:34pm:
Quote:
The first figure certainly generates more turnover but as you will recall the gentleman said 'most profitable', not the highest turnover.

In the two instances you give the latter represents the most profitable scenario


You assume he meant profit margin, I assume he meant profit compared to
other states. "one of the company's most profitable states"

the first scenario makes 25% more profit than the second.


No I assume he meant what he said.  Most 'profitable'.  Profitability is measured by deducting the cost of the product (supply) from the sale price and is represented as a percentage.  It is a return on investment.  A high percentage is most profitable and a low percentage is a reason to do something else with your money.

Remind me not to hire you.  You would give me a very low return on my investment.


And remind me not to hire you, if you think making 25% more profit by simply watching your bowsers pump more fuel is not 25% more profit.
I'll be rolling in it while you gnash your teeth wondering why people aren't buying fuel from you anymore.
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #182 - May 29th, 2008 at 10:11pm
 
Alex wrote on May 29th, 2008 at 10:08pm:
deepthought wrote on May 29th, 2008 at 9:59pm:
Alex wrote on May 29th, 2008 at 9:34pm:
Quote:
The first figure certainly generates more turnover but as you will recall the gentleman said 'most profitable', not the highest turnover.

In the two instances you give the latter represents the most profitable scenario


You assume he meant profit margin, I assume he meant profit compared to
other states. "one of the company's most profitable states"

the first scenario makes 25% more profit than the second.


No I assume he meant what he said.  Most 'profitable'.  Profitability is measured by deducting the cost of the product (supply) from the sale price and is represented as a percentage.  It is a return on investment.  A high percentage is most profitable and a low percentage is a reason to do something else with your money.

Remind me not to hire you.  You would give me a very low return on my investment.


And remind me not to hire you, if you think making 25% more profit by simply watching your bowsers pump more fuel is not 25% more profit.
I'll be rolling in it while you gnash your teeth wondering why people aren't buying fuel from you anymore.


So tell me this then, if you think turnover equals profit, why do they ever put their prices up?  Why not just keep the price at a 1 cent a litre margin and sell more fuel than everyone else in town?
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #183 - May 29th, 2008 at 10:24pm
 
deepthought wrote on May 29th, 2008 at 10:11pm:
Alex wrote on May 29th, 2008 at 10:08pm:
deepthought wrote on May 29th, 2008 at 9:59pm:
Alex wrote on May 29th, 2008 at 9:34pm:
Quote:
The first figure certainly generates more turnover but as you will recall the gentleman said 'most profitable', not the highest turnover.

In the two instances you give the latter represents the most profitable scenario


You assume he meant profit margin, I assume he meant profit compared to
other states. "one of the company's most profitable states"

the first scenario makes 25% more profit than the second.


No I assume he meant what he said.  Most 'profitable'.  Profitability is measured by deducting the cost of the product (supply) from the sale price and is represented as a percentage.  It is a return on investment.  A high percentage is most profitable and a low percentage is a reason to do something else with your money.

Remind me not to hire you.  You would give me a very low return on my investment.


And remind me not to hire you, if you think making 25% more profit by simply watching your bowsers pump more fuel is not 25% more profit.
I'll be rolling in it while you gnash your teeth wondering why people aren't buying fuel from you anymore.


So tell me this then, if you think turnover equals profit, why do they ever put their prices up?  Why not just keep the price at a 1 cent a litre margin and sell more fuel than everyone else in town?


Well it appears to me that thats exactly what Woolies have done. They sell fuel at a lower price, and the competition just keeps withering up and disappearing. When the competition is all gone they can ramp it up and improve the profit margin. It's called predatory pricing.

(something Labor are addressing but which never occured to the ex-government when they allowed supermarkets to enter the fuel market along with their voucher thing). (Despite the fact that the same thing had already happened overseas before it started here.)
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #184 - May 29th, 2008 at 10:32pm
 
Alex wrote on May 29th, 2008 at 10:24pm:
Well it appears to me that thats exactly what Woolies have done. They sell fuel at a lower price, and the competition just keeps withering up and disappearing. When the competition is all gone they can ramp it up and improve the profit margin. It's called predatory pricing.

(something Labor are addressing but which never occured to the ex-government when they allowed supermarkets to enter the fuel market along with their voucher thing). (Despite the fact that the same thing had already happened overseas before it started here.)


Whoa soldier, according to the publicity about the FuelWatch scam the anti-competitve environment has allowed Woolies to flourish in WA.  Haven't they gone from strength to strength there?  In fact it is their most profitable state.

Are you saying that the ALP plan to address it will see that kind of predatory pricing nationwide?
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #185 - May 29th, 2008 at 10:44pm
 
deepthought wrote on May 29th, 2008 at 10:32pm:
Alex wrote on May 29th, 2008 at 10:24pm:
Well it appears to me that thats exactly what Woolies have done. They sell fuel at a lower price, and the competition just keeps withering up and disappearing. When the competition is all gone they can ramp it up and improve the profit margin. It's called predatory pricing.

(something Labor are addressing but which never occured to the ex-government when they allowed supermarkets to enter the fuel market along with their voucher thing). (Despite the fact that the same thing had already happened overseas before it started here.)


Whoa soldier, according to the publicity about the FuelWatch scam the anti-competitve environment has allowed Woolies to flourish in WA.  Haven't they gone from strength to strength there?  In fact it is their most profitable state.

Are you saying that the ALP plan to address it will see that kind of predatory pricing nationwide?

Hahaha dont forget it was the WA Liberals who introduced fuelwatch without introducing anything to fight the practice of predatory pricing. (still think it works OK too according to the WA senator)

Labor's fuelwatch scheme is being introduced alongside measures to fight predatory pricing.
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #186 - May 29th, 2008 at 10:47pm
 
Alex wrote on May 29th, 2008 at 10:44pm:
deepthought wrote on May 29th, 2008 at 10:32pm:
Alex wrote on May 29th, 2008 at 10:24pm:
Well it appears to me that thats exactly what Woolies have done. They sell fuel at a lower price, and the competition just keeps withering up and disappearing. When the competition is all gone they can ramp it up and improve the profit margin. It's called predatory pricing.

(something Labor are addressing but which never occured to the ex-government when they allowed supermarkets to enter the fuel market along with their voucher thing). (Despite the fact that the same thing had already happened overseas before it started here.)


Whoa soldier, according to the publicity about the FuelWatch scam the anti-competitve environment has allowed Woolies to flourish in WA.  Haven't they gone from strength to strength there?  In fact it is their most profitable state.

Are you saying that the ALP plan to address it will see that kind of predatory pricing nationwide?

Hahaha dont forget it was the WA Liberals who introduced fuelwatch without introducing anything to fight the practice of predatory pricing. (still think it works OK too according to the WA senator)

Labor's fuelwatch scheme is being introduced alongside measures to fight predatory pricing.


If I recollect it was the WA Libs who thought of it but the WA Liebor Party who implemented it.  And you say they didn't implement a predatory pricing strategy?  This is allowed Woolies to rip off the motorists?

What is the federal Liebor strategy for their version of the scam?  The anti predatory pricing measure, how will that work mate?
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #187 - May 29th, 2008 at 10:52pm
 
deepthought wrote on May 29th, 2008 at 10:47pm:
Alex wrote on May 29th, 2008 at 10:44pm:
deepthought wrote on May 29th, 2008 at 10:32pm:
Alex wrote on May 29th, 2008 at 10:24pm:
Well it appears to me that thats exactly what Woolies have done. They sell fuel at a lower price, and the competition just keeps withering up and disappearing. When the competition is all gone they can ramp it up and improve the profit margin. It's called predatory pricing.

(something Labor are addressing but which never occured to the ex-government when they allowed supermarkets to enter the fuel market along with their voucher thing). (Despite the fact that the same thing had already happened overseas before it started here.)


Whoa soldier, according to the publicity about the FuelWatch scam the anti-competitve environment has allowed Woolies to flourish in WA.  Haven't they gone from strength to strength there?  In fact it is their most profitable state.

Are you saying that the ALP plan to address it will see that kind of predatory pricing nationwide?

Hahaha dont forget it was the WA Liberals who introduced fuelwatch without introducing anything to fight the practice of predatory pricing. (still think it works OK too according to the WA senator)

Labor's fuelwatch scheme is being introduced alongside measures to fight predatory pricing.


If I recollect it was the WA Libs who thought of it but the WA Liebor Party who implemented it.  And you say they didn't implement a predatory pricing strategy?  This is allowed Woolies to rip off the motorists?

What is the federal Liebor strategy for their version of the scam?  The anti predatory pricing measure, how will that work mate?

I dont know of any federal party called liebor! Dont know what Liebor's policy is in regards to predatory pricing.
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #188 - May 29th, 2008 at 11:39pm
 
Alex wrote on May 29th, 2008 at 10:52pm:
I dont know of any federal party called liebor! Dont know what Liebor's policy is in regards to predatory pricing.


Nice try.  But I know the truth of the matter.  There is none.  

The only mention of predatory pricing you will hear is the Liebor Party moving an amendment to Section 46 of the Trade Practices Act which already covers predatory pricing anyway - Boral was prosecuted under that section recently for predatory pricing.  They are not introducing anything new.  They are tinkering, much to the dismay of the legal fraternity because Bowen (the minister) has no idea what he's up to and he's likely to dislodge the whole section and render it useless.

But the truth is there is no provision other than the pre-existing TPA for predatory pricing in the new scam.  Though even that may be ruined after Minister Bowen gets his two left hands on it.
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #189 - May 30th, 2008 at 12:07am
 
The Federal Government's promising to make business competition fairer, with broad changes to the trade practices laws.

It's moving to crack down on so called ‘predatory pricing’, by which, big powerful businesses set prices on some items so low that they force smaller players out of the market.

The competition watchdog the ACCC is on side, it says the new laws will make it easier to prosecute predatory pricing cases.

Big and small business organisations are on side too.

The Federal Government's proposing to amend the Trade Practices Act to make it illegal for big businesses to slash prices to wipe out smaller rivals; a practice known as predatory pricing, saying the new rules will make it easier to prosecute such anti-competitive behaviour.

At least one deputy chair of the Competition and Consumer Commission will have to have small business expertise.

And it will be cheaper to launch a misuse of market power case, with some cases to be heard in the Federal Magistrates Court, rather than the Federal Court.


contiued at
http://www.abc.net.au/pm/content/2008/s2229580.htm
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #190 - May 30th, 2008 at 12:15am
 
Alex wrote on May 30th, 2008 at 12:07am:
The Federal Government's promising to make business competition fairer, with broad changes to the trade practices laws.

It's moving to crack down on so called ‘predatory pricing’, by which, big powerful businesses set prices on some items so low that they force smaller players out of the market.

The competition watchdog the ACCC is on side, it says the new laws will make it easier to prosecute predatory pricing cases.

Big and small business organisations are on side too.

The Federal Government's proposing to amend the Trade Practices Act to make it illegal for big businesses to slash prices to wipe out smaller rivals; a practice known as predatory pricing, saying the new rules will make it easier to prosecute such anti-competitive behaviour.

At least one deputy chair of the Competition and Consumer Commission will have to have small business expertise.

And it will be cheaper to launch a misuse of market power case, with some cases to be heard in the Federal Magistrates Court, rather than the Federal Court.


contiued at
http://www.abc.net.au/pm/content/2008/s2229580.htm


Yep, exactly what I said.  An amendment to the existing provisions but not connected to the FuelWatch scam.

And it even confirms my worst fears.

Quote:
ALEXANDRA KIRK: Big business groups back the changes



Uh oh.
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #191 - May 30th, 2008 at 12:54am
 
deepthought wrote on May 30th, 2008 at 12:15am:
[quote author=Alex link=1210996459/180#189 date=1212070045]
Uh oh.


Small business support it too, so whatever your concern is you shouldn't keep it to yourself because obviously they need to know your opinion in order to make an informed decision.
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #192 - May 30th, 2008 at 7:23am
 
Alex wrote on May 30th, 2008 at 12:54am:
deepthought wrote on May 30th, 2008 at 12:15am:
[quote author=Alex link=1210996459/180#189 date=1212070045]
Uh oh.


Small business support it too, so whatever your concern is you shouldn't keep it to yourself because obviously they need to know your opinion in order to make an informed decision.


Like I said there is already provision in the TPA Section 46 for action against predatory pricing.  But Liebor's Bowen is meddling with it in a most alarming way.

Quote:
“If anything, by virtue of having a specific section in there now dedicated to predatory pricing, it just highlights the fact that there are elements of such a claim that the ACCC has to prove that are highly contentious like recoupment.”

The latest amendment by the Assistant Treasurer and Minister for Competition Policy & Consumer Affairs, Chris Bowen, stipulates there should be no element of recoupment in a predatory pricing case in Australia.

Corrigan, however, argued against the striking out of the recoupment element, citing its inclusion in the definition of predatory pricing in overseas jurisdictions such as the United States.

“That’s his view,” Corrigan said in response to Bowen’s move, pointing to the High Court’s ruling in Boral as a confirmation of the importance of recoupment to a predatory pricing action. “Even Justice Kirby accepted it, and he was a dissenter. Kirby said that when you look at that, case recoupment is an important [even] if not essential part of any predatory pricing case. So the government’s gone against the Justice Kirby line as well as the majority, without any real satisfactory explanation.”

Dr Beaton-Wells also tabled criticism of the minister’s interpretation of the High Court’s past rulings, focussing on its interpretation of the test for ‘taking advantage’.

“Bowen, the minister, says in his speech that in Rural Press, the court endorsed a test which inquired whether the corporation could have undertaken the [anti-competitive] conduct without a relevant degree of market power, but … he’s just wrong about that: the court didn’t endorse that test.

Link


One aspect that they are talking about there - 'recoupment' - which Bowen is striking out, will make it harder for small business to prove intent.  Another is Bowen's misinterpretation of the 'taking advantage' test. This will create considerable wealth for lawyers arguing about what constitutes 'advantage' and what is merely competition in a competitive market.

Now this would all be exacerbated in the anti-competitive environment created under the FuelWatch scam.  The government is licencing petrol retailers to collude and even providing the means - a tax payer funded web site.

Bowen is making the path to predatory pricing much easier for big business.  That's why they support it.
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Alex
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Re: Nelson's petrol tax cuts are a bad idea
Reply #193 - May 30th, 2008 at 12:01pm
 
The best argument the libs can come up with is that small business support the new predatory pricing laws it because they would be bad for them and fuel companies oppose fuelwatch because it would benefit them.

It would be funny if they weren't being serious. As it is, we can just all be glad they are irrelevant.
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deepthought
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Re: Nelson's petrol tax cuts are a bad idea
Reply #194 - May 30th, 2008 at 1:00pm
 
Alex wrote on May 30th, 2008 at 12:01pm:
The best argument the libs can come up with is that small business support the new predatory pricing laws it because they would be bad for them and fuel companies oppose fuelwatch because it would benefit them.

It would be funny if they weren't being serious. As it is, we can just all be glad they are irrelevant.


First, the 'predatory pricing laws' are not new.  They were introduced by the coalition in about 2003. 

Second, of course small business supports predatory pricing regulations in general but this fiddling by Liebor's Bowen would be supported by big business as he is going to make it harder for small business to prove their case.

Third, oil companies oppose all regulation.  It comes with the territory.  In fact if you read the ACCC report that is about all they say.  "In principal (insert oil company name here) opposes additional measures to regulate the industry".  The only one who apparently opposes it for markedly different reasons is Gull Petroleum (who represents independents) proposing that the independents will be targetted in their territories by the majors and will be unable to respond to competition on an intra-day basis.

Fourth, do you support FuelWatch?
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