Monopoly Menace: The Unchecked Expansion of Bunnings and Masters – Its Impact on Local Communities
Fear of Bunnings and Masters getting too strong was brought home to me when attending the World Plumbing Council meetings and Singapore International Water Week in Singapore in July 2014. So many Australians are starting to ask whether we should fear Bunnings and Masters getting too stronger a monopoly.
This was the first time I had attended a World Plumbing Council meeting. I was doing so as an individual member plus an observer from the Master Plumbers & Mechanical Services Association of Australia (MPMSAA).
For me personally, the overwhelming impression after two days was the commonality of issues worldwide. Countries such as India and China admire and would love to have:
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our professional plumbing standards and laws
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our training regime inclusive of apprenticeships
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our licensing of not only plumbing companies but individual plumbers
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our regulation of all things regarding plumbing, drainage and gas fitting
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our product regulation and safety, whereas all plumbing products must be Watermark-certified
In an equally perverse way, countries such as Australia, the UK, the USA and Canada are deeply concerned about a trend in all jurisdictions that are essentially dumbing down the plumbing industry, with the common thread being:
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reducing training standards
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deregulating or removing licensing
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reducing downward regulation standards
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tolerating more and more DIY plumbing
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reducing or eliminating product regulation
The Safety Paradox: Australia’s Remarkable Record in Preventing Plumbing Disasters Despite Bunnings’ Dominance
Unfortunately, in Australia, we take plumbing for granted because our high standards, training, regulations and enforcement of laws mean that, unlike many other developing countries, people do not die from poorly installed plumbing in Australia.
Strong plumbing regulations have made the world much safer in many countries. But with that safe environment that plumbing has created has come complacency to the degree that we only appreciate plumbing when we don’t have it.
In the USA, this complacency has been capitalised on by large corporations that have built large hardware box store warehouses importing products worldwide. In addition, they have led the charge to dumb down plumbing standards to sell more plumbing products to the public at a much higher profit.
In Australia, we see the emergence of this same pattern led by Bunnings (Coles) and Masters (Woolworths).
In Australia, much of the reduction in standards is trumpeted by politicians as a reduction in red tape. Still, it’s removing public health standards that have protected the general population for 150 years.
Acutely merely reducing public health standards is not a reduction in red tape but the caving in of bureaucrats and politicians to lobbyists who convince them our laws and regulations are too strong and restrictive.
The Big Squeeze: Bunnings Embraces American-Style Supply and Installation, Pushing Manufacturers and Plumbers to the Edge
Already you see Bunnings adopting the American models of offering total supply and installation of products squeezing the margins of manufacturers and plumbers to the absolute limit, and advertising the following ….” gas and electric hot water systems. From just $249*, we will arrange your standard installation for you, and if you need an emergency replacement system, we will also organise that to be installed.”
It is utterly impossible to legally and compliantly replace an existing hot water system for $249 (or what is, in reality, $226 exclusive of GST), and Bunnings know it, which is why they have the asterisk after the price, which states…. “*Additional costs do apply beyond standard installation. For information on licensing, please view details here.”
If you click on those links, it leads you to download a three-page document full of exclusions. So very simply, the $249 price is entirely false but is designed to get you to buy from Bunnings without checking the details.
A Dangerous Duo: The Risks of Allowing Bunnings and Masters to Gain Excessive Market Power
After listening to the issues raised by delegates from USA and Canada, we have much to fear if we let Bunnings and Masters get too strong. Already we have seen the effects of supermarkets’ continuous limit of choice, and now we are on the verge of seeing it in the hardware industry. Imagine an Australia where Bunnings and Masters control the plumbing industry:
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DIY is rampant, leading to lower house prices and higher insurance policy costs
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fewer skilled jobs leading to fewer apprenticeships
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licensed plumbers working at subsistence levels based on rates decided by Bunnings or Masters as occurs in the USA where a journeyman plumber in LA is paid $20000 a year
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limited choice of product
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no Australian manufacturing further decreasing career choice and leading to increasing unemployment
We need to ensure politicians understand the implications of dumbing down plumbing because the SARS outbreak and the current Ebola virus are a warning of what faulty plumbing can create. Viruses are ever-changing and ever-mutating, and India and China are only too well aware that strong plumbing regulations guard your health.
