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Brumby’s bakery boss forced to resign over “carbon tax memo”

It was a dumb memo to write:

“Brumby’s recommended some “simple things for you all to do to find some extra sales”.

“We are doing an RRP (recommended retail price) review at present which is projected to be in line with CPI (consumer price index), but take an opportunity to make some moves in June and July, let the carbon tax take the blame, after all your costs will be going up due to it,” Mr Priest wrote.”

“It is understood the newsletter was sent to franchise owners last month.” [The West Australian]

But the outcry about it is over-the-top. It has drawn national interest, been published on the news around the country. The company has issued apologies. The outrage has been so overdone, that today managing director of Brumbies bakery’s (Deane Priest)  resigned.

The memo was dumb because it wasn’t suggesting a totally honest approach, and because it projected the wrong attitude to staff of Brumby’s, and it was especially dumb, because there is a witchhunt on for any business which blames a fraction of a cent more than they should on the carbon tax. With 300 stores across the country there was a 100% chance of at least one staff  member being a fan of the carbon tax, or the Labor Party, and leaking it to the press, whereupon it would fuel the fire at the stake being readied for some random unlucky sod.

Don’t mistake me, trying to pull one over on customers is a bad-and-mad business strategy, but at the end of the day, the customer was still getting the same load of bread, for a price agreed in advance. If they didn’t like the price (or the tax quotient), they can always shop at Bakers Delight, right?

In normal times, sloppy memos like that one never make it to the national news. The company is not making itself richer by promising that the bread contained Hand-Seeded Organic Aztec Flax while it was really made with GM wheat from Weifang, China. If the memo was cheating anyone here, mostly it wasn’t the customer, it was the government. If Brumby’s was trying to sell more bread by pretending that a larger cut of the price was “helping the environment” then that would be deceptive, and customers could rightly feel aggrieved that more of their money was not subsidizing bird-chopping fans, as they had been led to believe — but they weren’t. Brumby’s, or rather, Deane Priest, was trying to cheat the government of it’s story that the price rise due to the carbon tax would only be 2 cents.

So look how effective that threat of fining businesses $1.1million dollars is already? It didn’t need to be invoked, or tested in the courts (which could potentially backfire badly) it just needed to be announced, as long as the furore against it was moderate and bearable, and it was.

Thus the Labor Party have silenced their critics – and I’m not talking about Deane Priest, I’m talking about all the honest business people watching the news for the last two days who now know absolutely that it’s better not to mention the carbon tax, unless they do it in cautious careful terms, with their lawyer at their side.

The regulation never needs to be tested in court, it merely needs to hang like a cloud of dengue-filled mosquitoes. The drone with encephalitic undertones will clear the area.

In a real free market, with true free speech, when a new tax comes in and one company takes a silly approach and blames the tax unfairly, a whole lot of push-backs occur. Some customers will figure that since the other baker only put up his prices by 2c due to the carbon tax, they’ll shop there instead. There are customers who might be in  favour of the tax (remember in a democracy, in theory, that’s supposed to be near 50%). If they suspect the owners of the bakery are exaggerating, it poisons the goodwill, they shop elsewhere. Then there are competitors, who might point out — or even advertise — that their company was more environmentally  friendly, and didn’t produce so much “pollution” as baker XYZ, and they’d win over some customers too. Lastly, there is a chance the memo would leak, and customers would feel they weren’t being treated with care and respect, and that would be bad for business too.

All of which tells us that in a real free market, there are plenty of ways to reduce this type of “spin” and the only situation where it might go down a treat is one where most of the customers didn’t like the tax, didn’t like the government who made it and didn’t care less if the tax was blamed unfairly, because they liked to whine about it themselves. And in this situation the problem is not the bakery but the government.

And the government knows it, which is why it needed draconian anti-speech laws. They knew the free market wasn’t going to protect them. Ultimately, the regulating class can’t rely on the free market to help them, because they are not an honest player in the game.

While too many politicians were caught on the hop today, pandering to the ACCC witchhunt, at least one politician put things in perspective. From the HeraldSun:

“Opposition small business spokesman Bruce Billson said Mr Bradbury was threatening small firms.

“Small businesses across Australia will be hit with the carbon tax – ovens, fridges, freezers and air conditioners will cost more to run and suppliers will increase prices,” Mr Billson said.

“This is the result of the carbon tax and no amount of threats by Mr Bradbury will hide that fact.”

Mr Billson said the biggest misleading comment about the carbon tax was Prime Minister Julia Gillard’s broken promise not to do it.

“If David Bradbury wants to crack down on misleading and deceptive conduct, he would ask the Prime Minister to apologise for her no carbon tax lie,” he said.”

It was a foolish thing for Priest to do, but he didn’t deserve to lose his job — and in normal times he wouldn’t have.

Post Note: Looking closer at the memo (or the only part we can see) — The company is thinking of lifting prices anyway (partly due to the carbon tax), and his crime is to suggest that timing the price rise to fit with the carbon tax timing is an “opportunity”, because people will assume it’s due to the carbon tax (and some of it is). He’s not suggesting anyone write or say anything to deceive the public. It’s is a form of cheap opportunism: “Let the carbon tax take the blame“.

H/t and thanks to Jaymez

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