As predicted by The Register, once the IT and related industries lumbered into motion to respond to the Australian Parliament’s inquiry into IT pricing in Australia, the rent-seeking would begin. As has been amusingly pointed out by local publisher Crikey, some of the submissions read as if they were penned in imitation of Terry …
It isn't just IT
I took my kids to a roller-skating rink in Bayswater in Victoria - a fairly low-end industrial-estate area complete with sex-aid shops etc. The price was $36 for a family of four.
Compare that to the John Nike Centre in Binfield, Berkshire where ice-skating is £20 ($30) for a family of four.
Seriously? A (not very smooth) concrete oval in a warehouse with 4 staff in a working-class area of Australia (which has pretty much infinite land available) costs more than a high-end ice-rink (with all the infrastructure and power that requires) in one of the more expensive villages in grossly over-crowded south-east England?
I'm gonna quit my IT job and go sell coffee (retails at $3.50-4.50/cup) and a chips ($9/plate) for cash.
Re: It isn't just IT
That's not much of a price difference. The difference could be down to other factors like the demand for ice skating and population density. The opposite could be true of, say a surf training business.
But I agree it not just IT, I bought a box set of season 1-4 of Doctor Who for a Christmas present from the UK, cost plus shipping it came to $68, the cheapest I could find here in Australia was at JB HiFi at $264!
I hope something does come of this enquiry.
Re: It isn't just IT
Dont get too wound up, if you'd done the currency conversion 5 years ago it would look much different (let alone when it was 3 Pacific peso to the pound). A rather odd comparison, I would have stayed on the coffee and chips routine or any consumer electronics goods (Rip-off Britain has nothing on Pay-with-your-first-born Australia).
You could always go back to Blighty ?
Its the same story with AFACT.
AFACT, doesn't give a shit about the local Australian industry, and is more about protecting the big AMERICAN studios.
Sounds like someone's had the wind put up them.
The shipping thing always amazed me. How the hell is it cheaper for me to get an item bought and shipped from the US, even by a proxy shipping service, than it is locally? Surely individual item shipping is orders of magnitude more expensive than the bulk shipping that's available to retailers?
The answer (the only answer) is that people at various points in the chain are making out like bandits and are now getting pissed off we've noticed. Now they're afraid they may actually have to engage in that dirty word 'competition'
One thing I do know for a fact is that resellers margins are a lot higher here than in the UK/US. So it isn’t just the vendors themselves.
Also, there seems to be a huge sense of inertia across Australian consumers. I have had many arguments with locals where they try to convince me that Australia is actually a cheap place to live.
But the gouging is happening everywhere, cars, house prices, food prices (you can pay over one dollar for a single lime and THEY GROW THEM HERE), sports and recreational equipment, music, film, beer… the list goes on.
Yeah, but have you tasted the limes here compared to the ones off the shelves in the UK or Scandinavia? I'm more than happy to pay the price for food that tastes *this* good!
I just bought a piece of equipment from the US for $320 landed in Oz - local price is over $600. They do it because they can. "Charge what the market will bear" is the basic principle of business.
I'm now taking bets as to whether anything will happen as a result of this show trial.
Retailers and other price fixers
The responses from the main contenders in this inquiry show just how much they think of their Australian sucker^H^H^H^H^H^H customers.
Microsoft - Didn't bother to attend but submitted a statement
Apple - Didn't attend but submitted a confidential statement
Adobe - Didn't attend or submit a statement, saying that the AIIA spoke for it.
What a bunch of bankers.
What this is REALLY about
is bald two-faced, double-standard, fuck-you hypocrisy on the part of every business that rips off Australian consumers with differential pricing. Their boardroom mentality, stripped of all the bullshit, is simply this:
"WE want the benefits of globalisation so WE can pay less for cheap labour by outsourcing to third-world countries. YOU lowlife, consumer plebs, however, are not entitled to the same benefits, so YOU will pay full price regardless." One rule for us, and another for them. In. Your. Face.
My response is simply to buy most of my stuff directly from Chinese drop-shipping sites like Chinavasion or TMart instead. They sell more stuff than Amazon at third-world prices to anywhere in the world, from clothing and shoes to office stationery to CDs and DVDs to electronics, and with no middleman markups.
I will not buy anything from these hypocritical thieving bastards. If they can benefit from globalisation, I can as well.
Not only software and IT services
Have a look at clothing.
If I log into Sears in the US saying I am from the US Levi 501 jeans are $US45-$US50 (with the current exchange rates this would be around $AU44-$AU49). If I say I am from Australia the option to view and order Levi 501s from then Sears website is removed. If I search Australian sites Levi 501s are $AU110-$AU150.
In the US there are various fitting lengths In Australia there is only one length.
Levi setup "exclusive" distribution rights for an Australian company and restricts official sellers in other countries from selling on-line and shipping to Australia to protect their monopoly. I wonder what training/warranty infrastructure a clothing company needs to setup to justify 100% retail price markups?
A few years ago the parallel import laws were changed to reduce the cosy "exclusive" import license monopoly a number of companies setup to gouge the Australian consumer. I have a friend of mine who saw a niche. He was able to import a UK product from a supplier in the US and sell them in Australia to his retail customers (and make a good profit) cheaper than the "official" distributor could buy them from the UK parent company. The "oficial" distributor could only buy from the UK parent and because the volume was low they got very little discount. The US supplier was the largest customer of the UK company and got good volume discounts which they passed on to their customers (including my mate who was the largest customer of the US supplier for this particular product). He provides the warranty cover for the products he ships. He has also been known to supply the "Official" distributor when the "Official" distributor was out of stock and unable to get stock quickly from the UK company.
". . . because, of course, warranty support is not offered in markets such as America."
Chirgwin pretty much says what I scream every time I read these half-arsed 'justifications'. Almost every expensive that is blamed for the increased price is one that is paid in every other market as well. A product made in China must be shipped, have import duties paid, be transported to the distributer, be inventoried and warehoused, be ordered, processed and handled by staff for distribution, transported again to a wholesale vendor, stocked, stacked and processed again, ordered, shipped and finally sold. It must be supported by local sales and technical staff and warranties must be provided and honoured.
NOTHING in this is different between Australia and the US. There is consensus that costs associated with selling products in Australia are indeed higher than those in the US but every estimate I have seen puts that difference somewhere between 5-20%, depending on the product.
Those with vested interest never actually put figures on the extra costs they blame, merely saying things like: "market factors", which is just a way of saying: "we charge more because we can".
It's been said before, here and elsewhere but it's not just IT. I play guitar and the markups can at times be extraordinary. One particular pedal I was keen to try retails in the US for $10 (assuming parity) than in Australia. Seems completely understandable until you take into account the fact that the pedal in question is MADE IN AUSTRALIA!!! Seriously. When I can buy and Australian made product cheaper overseas than I can here (DIRECT from the manufacturer - no 'middle men',) there is something dreadfully wrong.
The manufacturer exclusivity agreements that they all have are the main problem it is this that should be made illegal.
It discourages competition and is often the main reason for price fixing. If only one wholesaler exists then they effectively set the local price.
Easy to check
It is simple to check, download the Australian and US IKEA Catalogues and compare them, page for page the pictures and the items are identical, but consistently the US prices are much cheaper usually up to 40% lower for the same item that has to be shipped to both the US and Australia.
LOL - fucking laughable....
Most of the comments here are pretty good.....
Out of curiosity, I actually looked up the prices of Microscoff Orifice 2010 - the prices..
I think in the USA - Amazon etc.. the Office Pro, was about $280.
The average price in the USA or via Microscoff, was about $360.
Harvey Norman - the whiniest fucking retailer about SMART people giving him and his fleecing franchises the flick, sells it for just under $900.
(I may be a touch out on the US prices.. as I was quite tired at the time... but it's sort of close enough)
And these shit head corporations and their bullshit "AIIA" shop front of bullshit artists and their slimy submissions..