Articles by Frank Zumbo

So how are you being ripped off? It’s simple really – once, of course, you know the games that can be played by the big oil companies and Coles and Woolworths.Let’s begin at the retail level.Here the rip off can occur in two basic ways. First, there is the practice of geographic price discrimination. This is where, for example, the same oil company charges one price for unleaded petrol at location A and a higher price for the same petrol at location B.Why the higher price at some locations and lower prices at other locations?Quite simply because the oil company can get away with the higher prices at those locations where there is little or no competition. At these higher priced locations there is simply no incentive for the oil company to lower its prices. Motorists simply pay a higher price than they would have if there had been independents in the local market.Clearly, geographic price discrimination serves two purposes. To begin with, it allows the oil companies and Coles and Woolworths to gouge motorists in those locations where there is no competition from independents.This gouging is nothing more than profiteering as the failure of competition in the local market means that consumers are being forced to pay much more than they would have if the local market had been vigorously competitive.The profiteering gets larger as local competition fails in more and more areas.Conveniently for the oil companies and Coles and Woolworths the geographic price discrimination can facilitate the destruction of local competition as the practice allows independents to be ambushed.This can occur as the lower prices charged by the oil companies and Coles and Woolworths where there are independents can be subsidised by the higher prices in those areas where the big players don’t face any competition from independents.In this way geographic price discrimination can be used in a predatory manner to target independents through at times below cost pricing with the clear aim of driving those independents out of business. The big players can sustain this below cost pricing against the independents through their higher prices in those areas where independents have been driven out of the local market.Sadly for motorists the below cost pricing only lasts as long as the independents do, because once the independents are forced out of the local market prices will go up.Read more abour petrol prices 

It might have been in the city, at a shopping centre or at the airport when picking up or dropping off loved ones? If paying inflated petrol prices wasn’t enough, motorists are now also being hit with inflated parking rates when they go shopping or to the airport.Then, of course, there are the CBD parking stations that cost an arm and a leg. It’s these CBD parking stations that consistently cost motorists dearly as the fees at the CBD parking stations start climbing the moment that boom gate rises to let you in. Of course the apologists for the CBD parking stations will rush to their defence and say that the exorbitant CBD parking station fees are the fault of higher land values in the CBD and city councils that impose parking levies on the parking station operators.And, naturally, the free market theorists will say tough luck as it’s “the market” that decides the price. Well, the problem with all those excuses is that there’s a real market failure when it comes to CBD parking station fees. Quite simply, there’s a lack of full and timely transparency of the CBD parking stations fees. How many times have you driven past a CBD parking station only to see advertising boards offering an attractive “from” price? Rarely, do you see a full price board until you are sitting right in front of the boom gate with some impatient driver behind you honking their car horn for you to quickly go through.Why don’t the CBD parking stations put their full price board in large print at a highly visible place where motorists have an opportunity not to enter the parking station if they don’t like the advertised prices? It’s pretty simple. CBD parking station operators don’t want you being able to shop around and that’s what you could do if you see the full price board from the road.The harsh reality is that the operators don’t mind ambushing you with the exorbitant prices at the boom gate as you then have no choice but to accept the parking fees given it’s impractical or just dangerous to try and back out onto the road with cars behind you or that could come in behind you anytime. As for the price boards indicating an attractive “from” price there’s certainly a good argument to be made that they are misleading motorists by creating a false impression as to the true cost of parking at the particular parking station. And, of course, parking station operators should not feel protected by some tiny asterisk next to the attractive “from” price as the tiny fine print linked to the asterisk cannot generally be seen or read from a motor vehicle.The key message is that the onus is on parking station operators not to mislead motorists. Here our friends at the ACCC could certainly take action to deal with the misleading conduct. They could also have some useful input regarding the development of a mandatory code of conduct for full and timely transparency of parking station fees. These initiatives would obviously help motorists, but more needs to be done as it’s not only motorists that suffer from inflated parking rates. Whether it’s at a Westfield Shopping Centre or a major airport inflated parking rates hurt retailers at those locations by penalising customers who spend more time shopping at the particular location. It defies logic that the longer customers stay to shop and spend money at the shopping centre or airport, the more they pay for parking. Where’s business sense in that? Or is it simply a case of what the shopping centre can get away with?Read full story on The Punch

Have you ever thought that you were being taken for a ride on petrol prices? Well, you have! So how are you being ripped off? It’s simple really – once, of course, you know the games that can be played by the big oil companies and Coles and Woolworths. Let’s begin at the retail level. Here the rip off can occur in two basic ways. First, there is the practice of geographic price discrimination. This is where, for example, the same oil company charges one price for unleaded petrol at location A and a higher price for the same petrol at location B. Why the higher price at some locations and lower prices at other locations? Quite simply because the oil company can get away with the higher prices at those locations where there is little or no competition. At these higher priced locations there is simply no incentive for the oil company to lower its prices. Motorists simply pay a higher price than they would have if there had been independents in the local market. Clearly, geographic price discrimination serves two purposes. To begin with, it allows the oil companies and Coles and Woolworths to gouge motorists in those locations where there is no competition from independents. This gouging is nothing more than profiteering as the failure of competition in the local market means that consumers are being forced to pay much more than they would have if the local market had been vigorously competitive. The profiteering gets larger as local competition fails in more and more areas. Conveniently for the oil companies and Coles and Woolworths the geographic price discrimination can facilitate the destruction of local competition as the practice allows independents to be ambushed. This can occur as the lower prices charged by the oil companies and Coles and Woolworths where there are independents can be subsidised by the higher prices in those areas where the big players don’t face any competition from independents. In this way geographic price discrimination can be used in a predatory manner to target independents through at times below cost pricing with the clear aim of driving those independents out of business. The big players can sustain this below cost pricing against the independents through their higher prices in those areas where independents have been driven out of the local market. Sadly for motorists the below cost pricing only lasts as long as the independents do, because once the independents are forced out of the local market prices will go up. Read the full article on The Punch Find the cheapest petrol near you