Dick Smith: Whiz of Ozby Ruth Laugesen
Electronics millionaire Dick Smith has found a new role as a critic of “extreme” capitalism and a crusader for Australian farmers. And he doesn’t like our beetroot.
We Kiwis are a submissive lot when it comes to food nationalism. We stood silently by when our sublime canned Otago apricots were replaced by pale, insipid imports. We hardly even harrumphed when Heinz Wattie’s started putting Australian tomato sauce in those iconic plastic bottles.
But over in proud Australia, even the humble beetroot can stir the heart of a patriot. After Heinz shifted its beetroot growing and canning to New Zealand, businessman Dick Smith, these days a food producer, launched a stinging attack on the multinational company.
The label on Smith’s own-brand Magnificent Australian Grown Sliced Beetroot is a call to arms. It proclaims: “When American-owned Heinz decided to move its beetroot processing facility from Australia to New Zealand causing hundreds of lost jobs, we decided enough is enough. So we are fighting back against poor quality imported product.’’ Heinz has accused Smith of libel, saying hundreds of jobs were not lost, and has threatened to sue Smith about the slurs on its product. Smith remains defiant.
We put it to Smith: jeez, mate, Australia is a rich country, so do you really begrudge our beet farmers a living? Not at all, says Smith, speaking on the phone from Sydney, but it’s not his job to stand up for us. “That’s why you need a New Zealand Dick Smith; you need somebody there saying you should support New Zealand farmers. I’m not going to say that. When I go to the Olympic Games, I’ll barrack for Australia, not New Zealand. I’m trying to assist our farmers, because our country towns are now being closed down.”
And he says he isn’t against globalisation and free trade. “I haven’t said Australian farmers should be protected against New Zealand. I’ve said I should be able to say on my label they sacked the workers and the product isn’t any good. Now I’ve tasted your beetroot and either your soils are different or something – it has a different taste.”
Long before Smith was portraying New Zealand as a sort of China of the South Seas pumping out allegedly shoddy root crops, he was, of course, the electronics millionaire. His eponymous stores still dot our consumer landscapes. Smith sold his final 40% stake for over A$20 million just over 30 years ago to Woolworths, which recently sold the whole company to a private equity group for about the same amount.
Smith’s business rode the early boom years of globalisation, importing large quantities of cheaper Asian electronic goods and componentry. But Smith pleads not guilty to one of the crimes he is frequently accused of: driving Australian electronics giant AWA to the wall.
“AWA was this huge billion-dollar company; Dick Smith was 22 years old with a $600 company. I just happened to hit the time when globalisation was coming in and the Labor Government took all the protective duty off. Instead of AWA quickly importing, they didn’t do it quick enough and they closed down.”
In those days, says Smith, it was held that Japan was good at electronics, Switzerland at making watches and Australia at producing food, iron and steel. “Well, we now hardly make any iron or steel, and we’re now a net importer of processed foods.”
Indeed, last year the value of Australian food imports overtook the country’s food exports for the first time, prompting a round of soul-searching and angst about food security. New Zealand growers and processors, who account for almost a fifth of processed fruit and vegetable imports to Australia, were fingered as being among the culprits. Cheaper labour costs were one factor. Australian growers’ organisation AusVeg claimed the rising tide of food imports meant one in four vegetable growers were facing financial ruin.
Now a master of food jingoism, Smith founded Dick Smith Foods in 1999 to champion Australian food. As with Paul Newman’s food company, all profits go to charity. Some of the products take a dig at once-iconic Australian brands that are now foreign owned. There is OzEmite, a yeast spread labelled in the familiar red and yellow colours of Vegemite, and OzEnuts peanut butter, packaged to look like Kraft’s peanut butter. Smith reached an out-of-court settlement with Australian-based but foreign-owned Arnott’s after it sued him for his Temptin’ biscuits, which look a lot like Arnott’s Tim Tams. So far, says Smith, he has given $4.8 million of profits away in Australia. “I have done very well out of Australia. I was also very concerned about our farmers.”
Smith, now 68, grew up a bit of a loner, and credits the scouting movement with equipping him for later leadership. After he sold his electronics chain in 1982, he threw himself into adventuring, completing the first solo helicopter flight around the world; circumnavigating the world from north to south, including over both poles; becoming the second person to fly over Mt Everest; and later circling the world again by helicopter, this time with wife Pip Smith. In 1986, he founded the magazine Australian Geographic. In 2000, he mounted the first transtasman balloon flight.
Now a voluble and hyper-energetic adult, Smith doesn’t drink alcohol and is uninterested in sports. All the same, he has been embraced by his compatriots, regularly topping the Reader’s Digest “most trusted Australians” poll and a front runner in polls on who should be Australia’s first president. He is also a maverick who will do almost anything to draw attention to his products. Early this year, TV networks banned an ad he made to run on Australia Day (January 26) because it was too rude, with a string of “Dick” jokes.
In his new incarnation as food patriot, Smith has detected flaws in the economic system that made him rich. He calls economic growth a “cancer”. “The only thing in nature that I know that has perpetual exponential growth is cancer. And it normally kills its hosts.” He says the expectation of never-ending economic growth and company-profit growth is possible only with a growing population and an increasing exploitation of resources and energy, none of which is sustainable. As companies come up against the limits of growth, they must resort to “extreme” capitalism to keep growing. “Extreme capitalism is doing things extremists do.”
Australia’s two big supermarket chains, Coles and Woolworths, are heading into extremism in their quest to keep growing, says Smith, and farmers have been the victims. “In the old days, Coles and Woolworths could make good money and grow because the population was growing and they were taking over other businesses. They didn’t have to beat the farmer down below costs.”
Smith says a senior executive in one of the two chains took him aside and said, “I don’t like my job any more.” He told Smith that supermarket operators used to believe it was important for suppliers to remain viable, but now they didn’t care. He had been instructed to tell suppliers, “We’re not interested if you make a dollar – if you don’t give us a lower price every year, we will go to China or New Zealand or anywhere.”
Belief in economic growth has become a religion, Smith declares. He staked his ground as a non-believer in his 2011 book Population Crisis, in which he sounded the alarm over Australia’s fast-growing population. Australia’s population has risen more than 50% since 1980, from 15 million to 23 million in 2011. It is expected to hit 36 million by mid-century. But he concedes the argument has gone “nowhere”.
“There’s absolutely no discussion at all. Eight out of 10 Australians, from our surveys, are concerned and don’t want a bigger Australia, and the politicians say we don’t want a bigger Australia.” But, he says, politicians know they must allow a bigger population, because it drives economic growth.
“Everyone says perpetual growth gives perpetual advantages. It does for wealthy people like me, because we get more customers.” But for the rest, he says, it just means spreading the jam more thinly. “They’ve now got 60-storey buildings in Parramatta, one of our western [Sydney] suburbs. That’s just the start – they’ll be 100 storeys, so our kids will be brought up like termites.”
Smith says no one has benefited from growth more than he has. “A lot of my critics say that in that case, I shouldn’t say anything. It would be easier for me to say nothing and go and live in Monaco. But I’m concerned about my grandchildren.”
But Smith has no clear answer for what the alternative is, or how we can live in balance with nature, as he would like us to. He certainly isn’t promoting socialism. He hopes for “a fantastic system of capitalism but with a different type of growth”. It might be growth in efficiencies, in removing waste, in quality of life. “We should get the learned people to work out how you do that. My logic says if you’ve got a system that requires unbelievable waste to be successful, it stands to reason you can have one that doesn’t require waste.”
On climate change, Smith believes humankind will probably do nothing about it and we will just have to live with it. He is unrepentant about his own very high carbon footprint, a result of his three houses and two helicopters. “Our whole economy is based on sending coal to China. Me selling my planes would have no measurable effect.”
Meanwhile, Australia’s biggest beet farmer, Ed Fagan of Cowra, New South Wales, who had to plough his crops into the ground after Heinz upped sticks, is now growing the crimson crop for Smith. Despite his product being 30c a can dearer than Heinz’s Golden Circle beetroot from New Zealand, Smith reckons the legal threats are a sign he is making a serious dent in his competitor’s sales. Fagan has been unable to grow enough beetroot to keep up with the demand from Dick Smith Foods.
But with extreme capitalism on the march, Smith predicts any smug feelings in Kiwi beet farmers supplying the Australian market will be short-lived. “These multinationals are ruthless. Unless you’re prepared to drop your wages, Heinz will only be temporary in New Zealand.” At which point we might just need a Dick Smith, too.
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