SUPERSIZE McKIDS

The merging of ABC Learning Centres with Peppercorn Management Group, the other leading private sector childcare provider, has created a huge, profitable, market-leading group. ABC currently operates 327 centres but will add a further 452 from the Peppercorn group, giving it a total of 779 centres but Eddy Groves, the chief executive of ABC, told the Australian (10 September, 2004) he plans an expansion that would give the group up to 1100 centres within three years. At present, the merged group will control around 53,000 long day places – which, according to the Sydney Morning Herald (10 September, 2004) amounts to one in every five places available for the children of working parents. The Liquor Hospitality and Miscellaneous Union, which represents childcare workers, says it plans to ask the Australian Competition and Consumer Commission whether the merged group would have an unfair control over the private childcare market. Mr Groves claims this will not be the case, since his $800 million company will have control of only 20 per cent of the market. However there must be concern at how Mr Groves will achieve his promised increase in profits without sacrificing the quality of care provided to children. Already, according to the SMH, each ABC centre yields an average net profit of $100,000. Mr Groves has promised to increase the profitability of of the Peppercorn centres by about 40 per cent by 2007. One good thing about the very size of the new group means that it might finally start to attract some media scrutiny other than in the business pages. A company this size engaged in such a vital industry deserves to have its operations under the spotlight.

Judy Satin

March 1st, 2005 at 12:12 pm

“Supersize McKids” said “there must be concern at how Mr Groves will achieve his promised increase in profits without sacrificing the quality of care provided to children.”

After reading through this anti-daycare website, one wonders about the quality of care in any daycare!