Lotto, Lawyers and LAPs: The Latest Issues In The Supermarket Saga

Tv3’s The Nation released a segment this weekend discussing fresh allegations of bullying from the Mad Butcher Chief Executive Michael Morton, who accused Progressives of having in the past sent the company ‘threatening letters’ from lawyers when Mad Butcher advertised using comparative pricing. In addition, he complained that when the jackpots on lotto draws go up he can lose up to 15 percent of normal weekend business.
There has also been mention in articles of the ongoing LAPs issue between local Councils and Foodstuffs/Progressives who have both been lodging appeals around the country.

First, let’s look at the issue of the lotto tickets.
The introduction of the ability to purchase your tickets at the checkout of some Countdown stores (100, according to the segment) received some criticism from the outset amid concerns it would encourage increased gambling and present more temptation to problem or potential problem gamblers. There was also the concern about young people being able to purchase tickets – Instant Kiwi scratch and win tickets currently being the only item restricted to buyers 18 and over.

Mr Morton claimed that on weekends where lotto’s jackpots had climbed significantly his stores regularly reported “up to 15%” loss of sales in some of their stores compared to regular weekends – he gave a real dollar value estimate of about “A couple of hundred thousand dollars”.
But Morton’s most interesting comment was yet to come – host Lisa Owen asked him if money was going “away from food and into gambling”. Mr Morton emphatically replied “yes.”

It is this response with which I really take issue. Who is Morton (Or Jones, or any individual or group) to assume that that extra money is ‘all’ going into gambling instead of food?
It has been quoted that there is ‘evidence’ people buy tickets over food on weekends where the jackpot is high.
But ‘evidence’ is not solid fact – and it certainly does not represent a majority.

The fact remains that The Mad Butcher currently does not supply lotto outlets in their stores – so it is expected, surely, that folks will do their shopping at a place where they can conveniently buy their lotto ticket as well?
And who said all these people are buying tickets over food? The audacity of Morton to infer that this is the case actually astounds me and I think it is very disrespectful to New Zealanders – his customers – to effectively throw his toys out of the cot and make this baseless accusation that because they aren’t spending money in his store they all must be spending that money on gambling instead.
The question is – where is his proof that this consistently happening?
Of course, he doesn’t have any. This man wants the patronage of New Zealanders – and yet he infers that we’re all gambling addicts.

Jones of course is no better – grasping at the lotto issue like a drowning man and saying that it is “taking kai out of the mouths of children.” Again – prove that all that spending on lotto tickets comes at the expense of grocery items. And speaking of Jones and lotto – did you know his partner works at Sky City – who we could consider a competitor to the lotteries commission? He spends most of his time these days at the Sky City Hotel.

It has long been a reality that a small percentage of people will purchase alcohol, cigarettes and drugs or gamble with their money at the expense of essentials such as food and bills.
But to place all this blame on the lotteries commission alone (and Countdown, let’s not forget That Big Australian Business) is both ridiculous and an obvious attempt at mud-slinging.

What about the other lotto outlets – both the ones which are part of an existing store and the ones which are stand alone kiosks?
You can find lotto outlets in gift shops, bookstores, convenience stores, and even dairies. Many malls have more than one outlet. Their signs are big, colourful and eye catching, designed to tempt folks to buy tickets. Most outlets now have video screens with bright, attractive advertisements and flashing symbols – not unlike the displays on pokie machines.

We were saturated by lotto outlets and their advertising long before you could by your ticket at some checkouts – so why the big song and dance now, and the suggestion that gambling and the temptation to gamble wasn’t that big a problem now, but suddenly is destined to spiral out of control just because you can get your ticket at the same time as you pay for your groceries?

Once you start regulating where and when lotto tickets can be sold you’re starting down a very slippery slope.
First you say they can’t be sold in “Aussie owned supermarkets” to quote Jones. If Progressive owned supermarkets can’t sell tickets, why should Foodstuffs supermarkets be able to? If you can no longer buy lotto tickets in or around a supermarket, why should convenience stores, dairies, gift shops, book stores etc be given continued license to operate?
What about the flashy posters and display screens? Do they go – a nod to plain packaging? Will stand alone kiosks still be able to remain in the middle of a mall or will they need to be concealed in a spot out of the way of foot traffic?
They are opening a big old can of worms and that is just one part of the issue

Jones and Morton should both go easy on that Eau De Desperation cologne – it’s rather stinky.


On to the lawyers – Morton alleged that on several occasions Progressive’s legal team has sent his company letters when they have undertaken comparative pricing advertising. He used big dramatic phrases like “We get smashed with lawyers’ letters, they come down like a sledgehammer with lawyers’ letters”.
When he talks about these allegations of bullying though, like Jones he doesn’t actually have any solid evidence. He says that it’s his ‘belief’.
He has gotten involved with the Commerce Commission’s investigation and claims he’s talked to suppliers who have told him that “pressure is put on them” although he doesn’t choose to elaborate on this.

What was the most interesting about his issue with these alleged letters is that the Mad Butcher is itself guilty of false advertising. Ms Owen bought this incident up in the IV, saying, “ have both been hauled up by advertising standards…for misleading advertising, you’ve both got in hot water over it.. you’re equally as bad, aren’t you?”
Morton dodged this question, going off on a bit of a tangent about how they’ve always used comparative pricing to show they offer better deals and accusing the ASA of not giving them clear information and changing the rules constantly.

The incident to which Ms Owen was referring occurred late last year, where Mad Butcher claimed that “Jo from Onehunga” did a comparative shop between Countdown and The Mad Butcher, saving almost $30 by shopping at the latter store. Countdown lodged a complaint following this advertising on the grounds that it was not representative of the actual availability of all products.
The investigation revealed that “Jo” had not actually purchased any items from Countdown; several of the items she bought from the MB were not available in Countdown or were not of the same quality; and Countdown did not offer 1 kilo packs of the type sold by the Mad Butcher. This complaint was upheld as likely to deceive and be be misleading to consumers.

Jones jumped on the lawyers bandwagon too – claiming that the Commerce Commission’s select committee has received ‘threatening letters’ from Progressive’s legal team. When asked for further information and evidence in regards to the existence of the purported threatening correspondence, Jones gave the ambiguous reply that it was ‘around’ followed by what I thought was a rather petulant suggestion that Patrick Gower and his team “look for it themselves”. When pressed he continued to bumble and fumble his way through the topic.

There is one all-important similarity between Jones and Morton – when asked if they can prove their various allegations and assumptions, both answer “No.”


So what about the LAPs issue?

The Nation also interviewed Lawrence Yule, who is Mayor of Hastings and also the president of Local Government New Zealand.
The discussion and debate around the right of liquor outlets and supermarkets to appeal local council alcohol policies has been ongoing. Regular readers will know I’ve addressed this topic in previous blog topics – in particular how the focus seems to be solely on Countdown’s appeals while ignoring or minimising appeals by Foodstuffs and local liquor outlets. Let’s not forget that Foodstuffs owns bottle store giants Liquor Land and Henrys so they have a definite personal interest in appealing the LAPs to benefit them.

Mr Yule revealed that of the 18 LAPs currently available for review, there are a total of about 60 appeals coming from both supermarket chains as well as local bottle stores.
The issue with Progressive’s appeals appears to be that they want to extend their licensing hours – up to 11pm in some areas, despite the facts many supermarkets still close at 9pm. Some stores which currently open at 9am are wanting to open as early as 7am.
In Napier/Hastings the local councils agreed to allow supermarkets to open as early as 7am while retaining the original closing time of 9pm. In other areas discussions are still taking place and possible outcomes have not yet been indicated.

Should there be rules around the way appeals can be lodged? Well, possibly. But like regulating and controlling lotto outlets, regulating appeals processes starts a slippery slope.

Most council policies are submitted for public review and residents and businesses have the right to submit their views for or against the policy including suggestions, criticisms and appeals for change. If we start making rules for who can make submissions, or what kind of submissions they can make we risk taking away people’s basic right to have their say.
If businesses can’t appeal a draft policy, what happens to operations in that area? Businesses could become hostages to the local council’s opinions which could be biased or be influenced by a conflict of interest or ulterior motive.
The same could be said for issues or plans that involve residents – building  new structure or demolishing one, for example. Ratepayers wouldn’t have a say in where their rates are spent. Families or residents living nearby to the proposed site wouldn’t be able to appeal against any disruptions  – such as construction or demolition – they felt may negatively affect them.

Should supermarkets and bottle stores have the right to appeal LAPs? I think so. Is aggression and persistence the way to get what they want? Perhaps not the ideal method, but it would be a typical business move – appeals against LAPs by supermarkets and bottle stores is nothing new. Should both parties negotiate firmly but fairly? Absolutely.



ASA upholds complaint against Mad Butcher

Michael Morton and Lawrence Yule IV with transcript

Shane Jones IV with transcript

Whale Oil: Jones’ conflict of interest