Vodafone has signed on as a major sponsor of the Wallabies, Brumbies, QLD Reds and Western Force in what is reportedly a multi million dollar deal. Vodafone has just cut newsagent commission by 37.5% while maintaining commission for Coles at 16% and, reportedly, Australia Post at 11%.
Newsagents now earn a merge 5% from Vodafone recharge sales. A $20.00 recharge earns $1.00 for around five minutes work. Coles is paid $3.20 for the same transaction. Newsagents hand the recharge revenue over daily whereas Coles gets to hold the cash for a month.
Vodafone’s commitment to Australian small business is well demonstrated by their attack on small business newsagents. Newsagents have more outlets and are open, usually, longer hours yet Vodafone has hit them hard. Maybe this is necessary so they can fund their rugby sponsorship.
Vodafone is demonstrating poor corporate social responsibility by financially hurting those least able to weather a cut in commission. Newsagents need Vodafone support more than rugby teams. Our businesses employ more people, Vodafone logos in our retail network are seen by more people every day than at a rugby match. We support Vodafone at the point of purchase, when recharge is top of mind.
The rugby sponsorship is about making Vodafone look good to the public. What the public does not know is what is going on behind the scenes. It’s like fashion and sweatshops. Thanks to news reports we are more aware of the pressure of some major brands on workers in poor countries to produce high fashion products for a few cents so they can be sold for obscene profits. Vodafone is our on the rugby field touting itself as a good corporate citizen by sponsoring this loved sport while at the same time ripping 37.5% commission from newsagents – not supermarkets, not Australia Post, but newsagents. Yeah, the poor and the voiceless are at the mercy of Vodafone and Vodafone has demonstrated how they deal with these folks.
Newsagents have been let down on this by the Australian Newsagents Federation (ANF) – a national association which has a commercial relationship with the company through which newsagents transact Vodafone recharge business. The ANF has failed to gain any ground in its meetings with Vodafone or Bill Express (the aggregator) on this matter. Indeed, following one meeting with Vodafone, the ANF bereted newsagents over lack of discipline and tried to explain that Coles offered better discipline and this was why they earned more than three times what newsagents earn on Vodafone recharge.
If Vodafone wants to be judged a good corporate citizen by Australians it needs to be fairer to small businesses like newsagents. It needs to reinstate a more equitable commission structure. It needs to demonstrate respect for newsagents as valued retail partners and not sweatshops to be exploited so they can fund expensive sports sponsorships.
See my earlier comments on Vodafone here, here, here and here.