Dick Smith launches blistering attack on 'greedy' Aldi - accusing the supermarket of 'funnelling hundreds of millions of dollars to Germany'
- Dick Smith has accused Aldi of being 'greedy' and 'ruthless'
- He said Aldi was forcing Woolworths and Coles of replicating its model
- Competitors are being forced to import home brand products, he said
- Woolworths had canned its contract to buy SPC tomatoes
Aldi discount supermarket has been accused of funneling 'hundreds of millions of dollars' out of Australia by forcing its competitors to cut costs or face financial ruin.
Dick Smith on Wednesday responded to reports Woolworths would cancel its deal with local fruit supplier SPC Ardmona, News.com.au reported.
The billionaire defended Woolworths in a letter, claiming had been forced to move to home brand products and reduce selection 'while sacking most of their Aussie employees'.
Dick Smith defended Woolworths on Wednesday and accused Aldi of driving money out of Australia by forcing competitors to cut costs and import home brand products
Smith said Woolworths and Coles would have to replicate Aldi's model or 'be sent into bankruptcy'
'Don't blame Woolworths for the SPC Ardmona disaster,' Smith said. 'Blame ourselves and capitalism as it gets to the limits of greed.
'It's clear that Woolworths and Coles will have to either replicate Aldi, that is, move to around 90 per cent home brand products and reduce their product selection from over 20,000 to just a few thousand, while sacking most of their Aussie employees, or they will be sent into bankruptcy.'
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He said Aldi was one of the world's most 'ruthless' retailers.
'Their greed is unlimited. Aldi Australia is now one-third the size of Coles and they haven't opened in Australia for charitable reasons. They are here to eventually take hundreds of millions of dollars out of our country and repatriate this money to Germany.'
He noted Australian jams sell at nearly three times the price of the Aldi equivalent.
Woolworths had canned its five-year contract to buy SPC tomatoes just two years in, and wouldn't say whether it will honour a $70 million fruit deal signed in 2014
'They are here to eventually take hundreds of millions of dollars out of our country and repatriate this money to Germany,' Smith said of Aldi
Smith also said there will be no jobs for generations to come when the Aldi model takes over because it is 'designed for very low staffing levels'.
An Aldi spokesperson said the supermarket sourced 90 per cent of its groceries from private labels, the majority of which were from Australian manufacturers.
'We only source products from overseas when we can’t find the product, quality, efficiency or innovation we seek here in Australia,' the spokesperson told Daily Mail Australia in a statement.
'Aldi directly employs almost 10,000 people throughout our retail stores, distribution centres and corporate offices.
'In addition, over the course of the year we engage with more than 1,000 suppliers, the majority of whom are Australian and have enjoyed growth and success as we have expanded.
'While we are proud of our global heritage, Aldi has established an independent operation here in Australia. All of our profits continue to be reinvested in our Australian operations, funding expansion and growth.'
The contract to take SPC's tomatoes, separate to other canned fruit, has ended and won't be renewed
Woolworths had canned its five-year contract to buy SPC tomatoes just two years in, and wouldn't say whether it will honour a $70 million fruit deal signed in 2014.
Independent MP for Shepparton Suzanna Sheed said it was 'cynical' of the supermarket.
'They really got on board with the Buy Australian campaign at that time and it's pretty cynical behaviour now two years into a deal to back out,' Ms Sheed told reporters on Wednesday.
The Victoria government contributed $22 million to help modernise SPC's operations as part of the 2014 deal.
The supermarket giant on Tuesday said it was in discussions about volumes and prices for the coming season - something it does every year.
But the contract to take SPC's tomatoes, separate to other canned fruit, has ended and won't be renewed.
An Aldi spokesperson said the supermarket sourced 90 per cent of its groceries from private labels, the majority of which were from Australian manufacturers
Woolworths will buy tomatoes from another provider that sources them from the Murray Valley region in Victoria.
The supermarket giant said it remained committed to the 'spirit' of the 2014 deal with SPC.
That deal kept the Shepparton cannery afloat, saving at least 500 jobs and guaranteeing supply from farmers.
Treasurer Tim Pallas says SPC and the state government invested money based on Woolworths' commitment.
'I'm bitterly disappointed with what I hear coming out of Woolworths (now),' Mr Pallas told reporters on Wednesday.
'They were in the media at the time that these arrangements were unveiled, they told the world, they told Victorians that they had a five-year commitment.'
Woolworths says talks with SPC will conclude this week.
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