David Penberthy: Traditionalists and trendies must co-operate for Adelaide businesses to thrive
THIS so-called battle between “Old Adelaide” and “New Adelaide” is often presented as an either-or proposition, but we shouldn’t have to choose, says David Penberthy.
- Chinese fail puts Royal Croquet Club’s future in doubt
- Company behind the RCC to be put into administration
- CBD traders near Vic Park rue RCC’s move to Pinky Flat
- Adelaide Fringe event prosecuted over ‘booze law breaches’
THIS so-called battle between “Old Adelaide” and “New Adelaide” is often presented as an either-or proposition where we are urged to choose a side and barrack accordingly.
You are either in favour of bricks and mortar businesses — pints and parmies — or you’re wearing a scarf and drinking tempranillo on Peel St while flicking through a novel by Albert Camus.
If Adelaide is going to prosper and evolve, both the traditionalists and the trendies will need to find a way to coexist. For state and local governments, it means taking as much red tape and tax pressure off traditional businesses, while also encouraging new people — especially young people — to explore new business models.
The new businesses should not be able to directly undercut existing businesses by being allowed to operate with zero overheads, or duplicate services that are already on offer at bricks-and-mortar enterprises.
But traditional businesses also have to realise that this is meant to be a free market, and that if some young punk with a food van or a small bar licence has a novel plan for a unique dining and drinking experience, the traditionalists simply need to smarten up their act to remain competitive.
This week, we read the sad news that one of our most successful challenger brands, the Royal Croquet Club, is close to financial ruin.
There are several reasons that the men behind The Social Creative — young local entrepreneurs Tom Skipper and Stuart Duckworth — have been forced to put the RCC and other subsidiaries into voluntary administration.
The biggest of these is unrelated to anything specifically involving Adelaide, but a failed overseas experiment where the company was promised the world and wound up almost destitute.
The company lost $1.1 million after being convinced to take part in China’s Qingdao International Beer Festival last year. Qingdao is Adelaide’s sister city, and The Social Creative was invited to create the Royal Adelaide Club to showcase the best of SA’s food, wine and beer, wooing prospective Chinese investment and tourists.
The Adelaide City Council was an enthusiastic backer of the idea and urged Skipper and Duckworth to get on board. On paper it made great business sense. The Chinese promised the guys an attendance of 50,000 people a day, free access at the beer festival to water and electricity, and no import duties on the SA produce and booze they were sending north.
Instead, they got 700 visitors a day, were forced to cough up $100,000 for water and power, and hit with onerous import duties that left them more than a million bucks in the red.
The business might have been able to weather this storm if not for a storm of a more literal kind, the statewide blackouts last year, where power was lost after the transmission towers were blown over.
This coincided with the OzAsia Festival, that brilliant event which has seen record crowds at Elder Park eating noodles by the tonne. The Social Creative had won the contract to stage what was called the Good Fortune Market, which was anything but that after the storm killed the event dead.
Even with this second setback, TSC was still in with a chance of clawing its way out of trouble with plans to stage the return of the extremely popular Alpine Winter Village on the Torrens Parade Ground.
Bafflingly, they were denied permission to hold the event, even though it injected so much life into the city in the middle of winter. That decision looked like Old Adelaide doing what it does best, simply saying no to something because it does not want to tamper with the status quo.
The refusal to grant permission for the Winter Village plan is typical of a mindset that saw the RCC and other pop-up style ventures attacked as nothing but a threat and an irritant to existing businesses. This criticism didn’t always make sense, as evidenced by the fact that when the RCC decided to move down to the Torrens, there were complaints from businesses in the centre of the CBD that all the positive spin-offs created by the Croquet Club in its original Victoria Square location would now be lost.
This was an admission of something that the traditionalists had long denied — that there were benefits for existing businesses from the activity created by this new enterprise.
While the current situation is a bad one for the blokes at The Social Creative, it’s obviously also a serious worry for the creditors who are owed money by the company.
Tom Skipper and Stuart Duckworth stressed on Thursday that they have no intention of walking away from their debts, and want to stage the RCC again in a bid to trade their way out of strife and repay their creditors.
“Administration provides the best opportunity for our creditors to recover, and the best chance of there being a Royal Croquet Club next year, which we certainly want to see happen if at all possible,” they said. “We are certainly not walking away; voluntary administration is about finding a solution that benefits creditors.”
It might be a challenger brand but the truth is that with a payroll of $1.5 million, 400 casual jobs, and some $8 million in new economic activity in the CBD around Fringe time, this upstart business did a lot to bring new people into town and get more dough swooshing through the local economy.
The city needs people like these, in the same way it also needs the traditionalists. We shouldn’t have to choose between parmies and Peel St.