Dick Smith says he is closing his food business to avoid bankruptcy, blaming the “extreme capitalism” of ALDI.
Dick Smith Foods will be shut down gradually over the coming months.
But the 74-year-old Australian businessman intends to keep 13 Dick Smith food products on shelves. He’ll do this, he says, by connecting individual suppliers with major supermarket chains, including Woolworths and Coles.
In a personal statement posted on the Dick Smith Foods website, Mr Smith writes, “It is my melancholy duty to inform everyone that after 19 years, I’ve had to make the decision to close Dick Smith Foods.
“It’s really sad – the reasons are covered in the attached letter (see link below), which I sent yesterday to our three major retail supporters, Coles, Woolworths and Metcash (IGA). I thank everyone for the incredible support over the years.”
In the “attached letter”, Mr Smith reiterates his company’s ethos: “The aim of Dick Smith Foods was to be “As Australian as you can get”, which meant we supported Australian farmers and manufacturers. It’s an important contribution to sharing the wealth in Australia because our manufacturers pay a higher minimum salary in Australia compared to other countries.”
But he pulls no punches in identifying the main cause of his decision: “The driving force of our closure, however, is ALDI.”
Mr Smith calls ALDI “secretive”, “ruthlessly astute” and “brilliant in the global stakes of ‘extreme capitalism’”.
“I am not complaining about ALDI”, he writes, before going on to suggest that ALDI uses cheap overseas labour to lower its costs.
But ALDI was quick to hit back. In a statement to ABC News, ALDI CEO Tom Daunt claimed the business employed 11,500 Australians and partnered with more than 1,000 local suppliers.
“At ALDI, we strive to provide our customers with high-quality products at affordable prices,” Mr Daunt said. “Losing focus of this purpose just adds costs.
“We’re proud of the reputation we have built and feel strongly that the recognition we have earned as Australia’s most trusted brand is a result of our commitment to openness, honesty and integrity in all our dealings.”