Government releases food map report

The government is ramping up its involvement in finding the impacts of the supermarket duopoly in Australia, releasing a report detailing the extent of their control over the market.

The Foodmap: An analysis of the Australian food supply chain report, distributed by the Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, found the 2010-11 turnover from retail food and liquor sales was $130 billion.

This figure accounted for over 60 per cent of household expenditure, and as the report found 80 per cent of the market is controlled by Coles and Woolworths, it is obvious why they are continuing to record profits.

Australian food manufacturers, fruit and vegetable growers and dairy farmers have all voiced their despondency over the control the big two have over their operations and survival, as they favour their own private-label products over other companies and lower the retail price of milk and produce with little consultation or consideration for farmers’ livelihoods.

“Private-label pricing in supermarkets for commodity milk product lines strongly influences overall returns in the fresh milk category,” the report states.

The Australian Competition and Consumer Commission (ACCC) last week called on companies and farmers to dob in supermarkets engaging in anti-competitive practises.

A quarter of household expenditure goes on eating out, while convenience and specialty food and liquor stores get only 12 per cent.

In the report, several risks for the Australian food sector are outlined, including energy costs, the negative impacts of the supermarket duopoly and the high Australian dollar.

Jennifer Dowell, National Secretary of the Food and Confectionary division of the Australian Manufacturing Workers Union (NMWU) told Food Magazine last week that the high Australian dollar can’t last forever, and therefore neither can the low prices.

It’s all very nice when the Australian dollar is high, but when it goes back down we’ll see the same problems we’ve seen before but on a much bigger scale,” she said.

“In the Griffith region a few years ago, where they grow a lot of oranges they were up in arms because suddenly the supermarkets started importing this cheap Brazilian concentrate, but then the dollar went down and the price went through the roof, so they wanted to come back to Australian oranges.

“But a lot of them were out of the business already.

Dowell is part of the Senate Inquiry into the impact of the supermarket duopoly on the Australian food sector, and is calling for immediate action from the government to stamp out the predatory practices of Coles and Woolworths.

Well in the case of the duopoly of Coles and Woollies, the anti-competitive practices that go on are appalling, their behaviour is disgraceful and the ACCC needs to have more power to deal with it,” she told Food Magazine.

“[Senator] Kim Carr referred some incidents to the ACCC, but I’ve spoken to the ACCC as part of the process and encouraged manufacturers to speak to them, but the problem is that if you look at the legislation, there isn’t a lot they can do.

“Once you’ve achieved market dominance as they have through their creeping acquisitions, there’s not a lot of power for the ACCC.

“We think their power should be beefed up and we think there needs to be more oversight.

Dowell told Food Magazine that as the supermarkets push more Australian companies and farmers out of business, we will rely on imports.

“My concern is that if we lose food sovereignty, if we lose control of our food chain we become hostage to other countries supplying our food.

“How ridiculous is that? In Australia we have the ability to produce the best food in the world, so how are we getting into this situation?

“Once these companies go, they won’t some back, they’re not going to come back and rebuild factories and businesses because Australia is upset after it basically kicked them out in the first place.

“If we rely on imports, and a country decides it is going to give its own market priority, as it very well should, what do we do? Where do we go?

“At a time when the world is saying Africa needs to have food sovereignty, we’re actually participating in a process where we won’t be able to feed our own people.
“We will be reliant on importing food.

“When we finally hit the wall and find that everything is coming from overseas and we no longer have any Australian food industries, it will be too late.

Ludwig said that over the past two decades years, spending on food in Australia has increased by 13 per cent, and incomes have risen 36 per cent.

“Although food has become relatively more affordable, economic pressures have still impacted on the eating habits and expenditure patterns of households,” Ludwig said.

“Of the fresh food consumed by Australians, well over 90 per cent is grown and supplied by our own farmers.

“As well as producing high quality, safe food for ourselves, Australia also feeds another 40 million people around the globe.”

Last week the Australian Food and Grocery Council (AFGC) announced it would be extending its representative reach to include small businesses, to provide realistic representation of the entire industry.

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