Coca-Cola Amatil has come back to Coles on why a bottle of Coke costs up to 54 percent more in Australia than Indonesia, sighting major differences in labour costs as the core reason.
Indonesian labour costs range between $1.50 and $2.50 per hour for the company, compared to a much higher base rate in Australia, as reported by SMH.
Managing director of CCA, Terry Davis, said while costs such as aluminium and sugar are similar globally, not every cost is geographically equitable.
Davis said that CCA in Australia pays 15 to 20 times more per hour for labour and significantly more for rent than Indonesia, a similar situation for Coles as they pay more for rent in Westfield complexes.
He also mentioned that CCA pays a significant amount more to have a social security backdrop which isn’t present in many of the other countries where CCA operates.
“Do we actually want to pay our workers $1.50 and $2.50 an hour? Of course they are cheaper in Indonesia,” he said.
“Yes I can bring in cans from Indonesia cheaper than I could produce them in Australia. That is absolutely right, but I am not going to do that because I am fervently a believer that we have to have a manufacturing industry in this country, because if we don’t we do it at our peril.”
Davis said that CCA has done everything in its power to reduce costs, “And if that’s not good enough, well I’m not sure what happens to the rest of the Australian industry because it’s a very dour outlook if that’s the case,” he said.
Coles managing director, Ian Mcleod, has been accused of using deflection tactics by pointing the finger at CCA and other multinational suppliers claiming that they are enjoying excessive profits at the expense of Aussie retailers in an attempt to divert attention away from current investigations by the ACCC for allegations of misuse of power.
CCA’s packaged fruit business, SPC Ardmona had recently lost half of its local market share to imports sold by both Coles and Woolworths under their private label brands.