Heston Blumenthal goes native with new Coles range

British celebrity Chef Heston Blumenthal has graced Australian shores once again, this time to launch 15 new products under the Heston for Coles brand.

The partnership between Blumenthal and the supermarket was announced in September last year, and since then, Blumenthal has met with a host of local suppliers and manufacturers, with the aim of including as many native Australian ingredients as possible in his new Coles range.

Blumenthal, who holds multiple honorary degrees in recognition of his scientific approach to cooking, told Food Magazine that although it was exciting to experiment with Australia’s native ingredients, some are simply not cut out for the food manufacturing sector.

“We went through quite a number of varieties of bush tomato and there was one (variety) that was very astringent,” he said.

“The problem with some of the native ingredients is that they have to survive in pretty extreme conditions … So to have the ability to survive, (the ingredients) are generally going to be more bitter.”  

Although the bush tomato presented some hurdles, Blumenthal says that Australia has some of the best produce in the world to work with.

“I’ve been coming to Australia now for 12-14 years and the produce here is amazing. From the seafood obviously to the best beef in the world, and the truffles, but also the native produce."

Some of the native ingredients that Blumenthal incorporated into the Coles range includes lemon myrtle in the in the Slow Cooked Asian Pork, and Pepperberries in the Beef Sausages.

Another product in the range is the Heston Remarkable Beef Burger which earns its name from the innovative way the beef is processed.

“We’ve developed a technique during the mincing process… As the mince comes out of the machine you basically catch it and then roll it into a big sausage… then when you cut the patties, all of the fibres are running one way, so when you bite down onto the burger, it’s really quite delicate," he said.

Blumenthal also said that the range has broken new ground by developing a number of slow cooked, supermarket ready products.

“One of the many things that have excited me about this range is that I don’t think that there is any supermarket, certainly in Australia, or even the world… that has managed to slow cook a piece of meat for 30 hours sous vide, which is an amazing thing to be able to have that as part of the range."

Other products in the new range include Pork and Sage Sausages, Slow Cooked Beef Ribs with Pepperberries, Beef, Onion & Shiraz Pies, Chicken, Leek and Mushroom Pies, Potato Topped Lamb & Rosemary Pies, Thyme and Lemon Roasted Chicken, together with a range of sauces.

Come September when the next Heston for Coles range will be rolled out, Blumenthal said that the inclusion of a few sweet treats are on the cards.

“We will be doing a sweet range,” he says. “We will be coming out with what I call the world’s best dunking biscuit. We did it for a show called Fantastical foods… [where] we looked at the science of dunking and tried to make a biscuit that can withstand it.”

The Heston for Coles range is now available at selected Coles stores across Australia.

Coles recalls RSPCA Approved Chicken Kiev

Coles supermarkets is recalling its Coles RSPCA Approved Chicken Kiev 700g (4 pack), best before 24/05/14, 25/05/14 and 26/05/14 and purchased from Coles supermarkets in South Australia, the Northern Territory, Mildura (VIC) and Broken Hill (NSW).

The recall is due to the product containing undeclared allergens of gluten, egg, milk and soy and is due to incorrect labelling. Products with other date codes are not affected.

Customers who have purchased the Coles RSPCA Approved Chicken Kiev 700g, with best before dates 24/05/14, 25/05/14 and 26/05/14, should return it to their nearest Coles supermarket for a full refund.

Customers seeking further information should contact Coles Customer Care on 1800 061 562.

Last week, Coles was fined over $30,000 for displaying food which was beyond its use-by date at its McLaren Vale supermarket in Adelaide.

The Magistrates Court was told some of the 33 items were about two weeks out of date.

Coles had recently moved to new supermarket premises in the Main Road shopping centre when council inspectors found the out-dated items, which included shaved ham and packaged salami.

 

Coles fined for out of date food

Coles has been fined over $30,000 for displaying food which was beyond its use-by date at its McLaren Vale supermarket in Adelaide.

The Magistrates Court was told some of the 33 items were about two weeks out of date, ABC News reports.

Coles had recently moved to new supermarket premises in the Main Road shopping centre when council inspectors found the out-dated items, which included shaved ham and packaged salami.

Magistrate David Whittle said the store's date-checking process had failed as many as three times.

Lawyers for Coles entered guilty pleas on seven counts of breaching the food code and the prosecution dropped another 15 charges.

The magistrate said there was no evidence the items had become unsafe but out-of-date food had the potential to be a risk to public health.

The court was told Coles had changed its procedures to avoid any repeat of the problem.

Coles issued a statement, which said "At Coles we take food safety seriously and our South Australian stores have had an outstanding record in this area. We set high standards and when we do not meet them we take accountability and fix the problem."

The court also ordered the retailer to pay $10,000 for Onkaparinga Council's legal costs.

 

Supermarket supply agreements played major role in Rosella’s collapse: Sarantinos

The receiver of Rosella has said supply agreements with Coles and Woolworths played a major role in the company’s collapse.

The Gourmet Food Group fell into receivership in 2012, less than a year after the ACCC alleges Coles began its ‘Active Retail Collaboration’ program, The Sydney Morning Herald reports.

The ACCC alleges that in relation to 200 of its smaller ‘tier three’ suppliers, Coles required agreement by the supplier to the rebate within a matter of days.  If these suppliers declined to agree to pay the rebate, Coles’ personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.

The campaign is now part of federal court proceedings against Coles over alleged unconscionable behaviour.

Jim Sarantinos, a partner at Ferrier Hodgson, said the demand of both supermarket chains through rebates greatly contributed to Gourmet Food Group’s financial state.

''Coles and Woolworths had a target they wanted to reach in regards to private label products, which are obviously sold at a significant discount to branded products like Rosella,'' Sarantinos said.

''The problem that Rosella had was that it didn't necessarily have the financial resources to make the changes that were required to counter that move.''

Waterwheel, which was operated by the Gourmet Food Group, is one of the suppliers who were targeted for payments, according to the ACCC’s statement of claim.

A creditor’s report from 2012 says sales from Rosella's branded products fell 16 percent in 2012 ''due to retailer focus on private label products.'' The report also says that sales to major food chains were ''substantially less than budgeted'' due to major retailers ''deleting various product lines in store and delays in launching of new products and focusing on private label products.”

Sarantinos said ''The push from the supermarkets towards private labels and the negotiating power they are able to exert on suppliers certainly had an impact on Rosella's performance.''

''There were still issues in Rosella's business, and it may have been that receivership was inevitable, but [the push by the supermarkets] was certainly a big factor.''

Parts of the Gourmet Food Group’s business have since been sold off. In February last year, Waterwheel Industries was sold to Australian food manufacturer, Green's General Foods. In March 2013, Pitango was purchased by Sydney-based Beak and Johnston.

Rosella was then acquired in April 2013 by Sabrands, with manufacturing at Sabrands’ Yarra Ranges plant. Rosella’s tomato sauce is back in Coles, Woolworths and IGA supermarkets.

 

Coles’ incoming boss named by ACCC

The incoming boss of Coles supermarkets, John Durkan, has been named in documents as playing a key role in allegedly mistreating Coles suppliers.

According to the Sydney Morning Herald, Wesfarmers was refusing to comment on the future of Durkan late on Monday, and seems to be standing by him.

Coles may be facing fines up to $200 million in the claim lodged by the ACCC with the federal court, where Durkan is placed at the centre of an ''orchestrated and organised'' campaign to pump up Coles pre-tax earnings by as much as $30 million.

The campaign allegedly demanded payments from tier 3 suppliers as a rebate for the supermarket group improving its supply chain.

ACCC chairman Rod Sims said the extent of the demands and alleged unconscionable conduct by Coles surprised even him.

''I think it's fair to say the allegations we have made amount to more than we thought we would find,'' Sims said on Monday.

''We have very much treated this as being an organised and orchestrated campaign by Coles.''

It is alleged Durkan, who will take the reins in July, approved a plan to demand payments from 200 suppliers as part of Coles' Active Retail Collaboration program in 2011.

The ACCC claims in its court documents that Durkan had no reasonable basis for telling suppliers the rebates reflected the value of the supply chain changes. In fact no details on how the payment figure was reached were provided.

 

ACCC takes action against Coles for alleged unconscionable conduct

The ACCC has instituted proceedings in the Federal Court of Australia against Coles alleging that the supermarket giant broke Australian Consumer Law in conduct in relation to its Active Retail Collaboration (ACR) program.

The ACR program was developed by Coles in 2011 to improve earnings by obtaining better trading terms from its suppliers. It’s alleged one of the ways Coles sought to improve earnings was through the introduction of ongoing rebates to be paid by its suppliers in connection with the Coles ARC program, based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain.

The ACCC alleges that in relation to 200 of its smaller suppliers, Coles required agreement by the supplier to the rebate within a matter of days.  If these suppliers declined to agree to pay the rebate, Coles personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.  The ACCC alleges that, in a number of cases, threats were made when suppliers declined to agree to pay the rebate.

The ACCC alleges that Coles took part in the following conduct:

  • Providing misleading information to suppliers about the savings and value to them from the changes Coles had made;
  • Using undue influence and unfair tactics against suppliers to obtain payments of the rebate;
  • Taking advantage of its superior bargaining position by, amongst other things, seeking payments when it had no legitimate basis for seeking them; and
  • Requiring those suppliers to agree to the ongoing ARC rebate without providing them with sufficient time to assess the value, if any, of the purported benefits of the ARC program to their small business.

ACCC chairman Rod Sims said “the conduct of Coles alleged by the ACCC in these proceedings was capable of causing significant detriment to small suppliers’ businesses. This could have resulted in these businesses becoming less able to plan and less able to innovate in the market, with resulting reduced economic efficiency and consumer detriment.”

The ACCC is seeking pecuniary penalties, declarations, injunctions and costs.

These proceedings arise from a broader continuing investigation by the ACCC into allegations that supermarket suppliers were being treated inappropriately by the major supermarket chains.

The Australian Food and Grocery Council (AFGC) welcomed the announcement of the proceedings.

AFGC CEO Gary Dawson said the proceedings involve very serious matters in relation to retailer dealings with food and grocery suppliers that have been hanging over the industry for years.

“It is important that these allegations be tested in court because they go to the heart of whether we have a properly functioning food and grocery market in Australia under the current market power imbalance,” Dawson said.

“Consumer interest is best served by a properly functioning competitive market and the ACCC has a key role in ensuring fair and effective competition across the supply chain.”

“Today’s announcement underlines the importance of an effective Industry Code of Conduct which will deliver more contractual certainty, encourage better sharing of risk and provide a practical dispute resolution mechanism without excessive regulation or compliance costs.”

“It also underlines the significance of the current Competition Law Review which will examine the impact of vertical integration and market power in key industry sectors, including supermarket retailing,” Dawson said.

In a statement Coles says it will vigorously defend the allegations, ABC Rural reports.

Coles said it's committed to negotiating fairly and working collaboratively with its suppliers, to help them grow. The supermarket said it's building strong relationships with its supplier partners "to grow a resilient and competitive grocery manufacturing industry in Australia."

In April, Coles published corrective advertisements on media platforms after the ‘Our Coles Brand Milk Story’ video stated that the farmgate milk price had increased to 90 cents when they had in fact decreased to 84 cents.

The corrections were published after the ACCC accepted an enforceable undertaking on the matter.

Coles admitted that its actions would be likely to have contravened section 18 of the Australian Consumer Law, (which prohibits misleading or deceptive conduct). 

 

Woolworths has overtaken Coles in sales growth

Third quarter earnings for Woolworths rose 4.4 percent compared to the same period last year to a total of $10.38 billion, when Coles only had a 3.9 percent rise in food and liquor sales.

When stores opened within the past year are excluded, sales growth is neck and neck, ABC News reports.

Woolworth’s chief executive Grant O'Brien said the business' momentum was clear in these results. "This is evidenced through market share growth and demonstrates the success of the work undertaken to deliver our first strategic priority 'to extend our leadership in food and liquor', with fresh sales and market share growing faster than grocery," he said.

But not everyone was impressed by Woolworths’ growth, with shares in the supermarket dropping 3 percent after the release of the March-quarter sales result, the Sydney Morning Herald reports.

Deutsche Bank analyst Michael Simotas said Woolworths shares had run up strongly in the lead-up to the sales report, gaining 8 per cent in the past month alone.

''Woolworths was only marginally short of [market forecasts] and some of the expectations out there were fairly high,'' Simotas said.

Woolworths doesn’t expect its sales to be slowed down by the looming tough federal budget, despite warnings from retail groups and economists of a possible hit to consumer sentiment.

According to The Mercury, O’Brien doesn’t expect the budget to affect consumer behaviour.  "Generally you can set your clock by a new government coming in and having a tough budget," he said. "So I don't see any great surprises and I don't see any great change in consumer behaviour as a result."

O’Brien said the retailer had been dealing with subdued consumer confidence for several years but expected sentiment to improve as memories of the global financial crisis fade.

Coles does not seem worried about the budget either, with Wesfarmers chief executive Richard Goyder saying on Tuesday that the company’s retail business is well positioned to withstand a slide in confidence.

"In a sense that's an opportunity for us, I think it plays into our strength, which is providing great value for our customers," Goyder said. "One of the things that attracted us to Coles was the fact that through different phases of an economic cycle the food business is pretty resilient."

 

Coles issues recall for undeclared allergen in gluten free cereal

Supermarket giant Coles is recalling its Coles brand Simply GlutenFree Nut Free Cereal (325g, Best Before 24/2/15) at all of its Coles and BI-LO stores throughout Australia due to an undeclared allergen.

The product has been identified as containing tree nuts (almonds) and Coles has said that people with either an intolerance or allergy to tree nuts should not use the product and return it to the point of purchase for a full refund.

Coles is said to be working with the manufacturer to understand how the undeclared allergen got into the product in the first place, and are said to be taking whatever steps are necessary to ensure this doesn’t happen again.

The cereal recall makes the second time in a week that Coles have issued a recall for undeclared tree nuts. Coles issued a recall for a Coles brand Easter Egg product which is manufactured by Heritage Chocolates last week after a child experienced a mild allergic reaction due to the presence of tree nuts.

 

Coles Easter Eggs recall after undeclared tree nuts found

Undeclared tree nuts have been found in Coles Easter Eggs (12 pack in plastic egg crate with various coloured foils), leading Coles Supermarkets to issue an Australia-wide recall of the product.

The recall was issued after a child experienced a mild allergic reaction on Monday, and Coles and Anaphylaxis Australia were immediately notified.

Yesterday Coles withdrew the product from sale, and issued a tree nut alert for the batch with a best before of 31 January, 2015.

It’s not the first recall from the company responsible, Heritage chocolates.

In April 2012, Heritage recalled Heritage Belgian Milk Chocolate Egg with Exquisite Chocolate Truffles from Coles Supermarkets nationally due to undeclared almond, hazelnut and gluten allergens.

Allergy and Anaphylaxis Australia has urged that the tree nut alert be shared with preschools and schools who may have purchased the product for Easter egg hunts.

 

Coles in court accused of selling out-of-date food

A South Australian council is accusing supermarket giant, Coles, of 22 breaches of Australian food standards, after an investigation uncovered it was offering out-of-date, sometimes mouldy, food.

Lawyers for Coles were in court yesterday after an investigation by City of Onkaparinga found more than 17kg of out-of-date meat, pasta, dips and fruit, some of which was mouldy, was for sale at its McLanre Vale outlet.

According to AdelaideNow, the breaches were discovered on 4 April, but the case has been put off until next month after lawyers for both Coles and the City of Onkaparinga asked for the case to be adjourned to allow for negotiations.

The products involved in the case include:

  • Eight 125g packets of Moira Mac's Australian chicken breast slices with a 1 April use-by date.
  • Five 300g packets of Primo diced bacon-style pieces with a 29 March use-by date.
  • Eight 150g containers of Wattle Valley Chunky Dips baby spinach with cashew and parmesan with a 23 March use-by date.
  • Six 200g containers of Yumis Authentic Hommus Toppers marinated eggplant and za'atar with a 25 March use-by date.
  • Eight 150g containers of Wattle Valley Chunky Dips basil with cashew and parmesan with a 26 March use-by date.
  • Multiple containers of Pronoto E Fresco Aussie Mix "which were labelled in a manner that was likely to mislead or deceive."

 

Coles pushes up Wesfarmers profits

Wesfarmers has reported a six percent rise in full year net profit, thanks, in part, to its supermarket chain, Coles.

The company posted net profit of $2.26 billion in the 12 months to June, up from $2.13 billion the previous year.

It's also announced a $579 million capital return to shareholders, prompting a 1.8 percent rise in shares to $42.72, SMH reports.

The profit rise  is short of analysts' forecasts, who had expected a rise of 7.6 percent.

Wesfarmers' supermarket chain, Coles, represents 40 percent of its total earnings and experiencing a rise of 11.4 percent in food and liquor earnings before interest and tax, to $1.37 billion.

Coles' key competitor, Woolworths, reported a 4.3 percent rise in fourth quarter total group sales year-on-year.

Both supermarket chains have engaged in strong price cutting strategies this year, Coles with its Down Down campaign and Woolworths counter-attacking with its Every Day Value discounts.

 

Coles creates superhero for Unreal Deals campaign [video]

Adding to its Down Down campaign, supermarket giant Coles has launched a new “Unreal Deals” promotion, featuring a new superhero character called Col.

This morning the supermarket chain put a “teaser” news-style 30-second clip on its YouTube channel previewing Col, using clips from the new TVC.

The new 30 second spot set to air tonight features the red-and-yellow lycra suited superhero running around a store offering “unreal deals”.

A voiceover proclaims: “Meet Col, a regular guy with unreal powers. He can slash prices at the point of a finger. He doesn’t do it for fame or fortune, he does it to help Australian save lots of money.”

They have also produced this infographic showing how you can make your own Col costume.

The new "Unreal Deals" campaign is in addition to Coles controversial Down Down campaign, which the Australian Food and Grocery Council claims limits the product range available to consumers as Coles favours its own private-label brands over indepedent brands.

Recent Roy Morgan research also raised questions on the effectiveness of such campaigns, with only 45 percent of Coles customers believing the supermarket has low prices.

Fellow supermarket chain, IGA, launched a similar TV campaign recently, and while it doesn't feature a lycra-clad superhero, it does feature an animated lock, Lockie.

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Woolies gives thumbs up to Thankyou

Both Woolworths and Coles have agreed to stock Thankyou products following an intensive social media based marketing campaign.

Coles agreed to stock the brand's bottled water, food and body care lines earlier this week, and following a meeting yesterday afternoon, Woolworths has now signed up to sell Thankyou water and some of its food products.

Thankyou is a social enterprise which donates profits (once business costs are taken care of) to funding water, food and hygiene projects in developing nations.

Thankyou co-founder and MD, Daniel Flynn, said "By bringing the Thankyou range to the 19.5 million customers that pass through Woolies every week, we will be able to make a massive difference for people throughout Asia and Africa, who are in desperate need of safe drinking water, food and hygiene education.

"We're absolutely thrilled and, to be honest, a little amazed at much support we have received from the Australian public in recent weeks."

The two week campaign urging the supermarket duopoly to stock Thankyou's products saw two helicopters, each carrying a 30x30m banner, fly over both Coles' Melbourne headquarters and Woolworths Sydney headquarters.

Over 15 million people were reached through social media, online traffic and traditional media including thousands of posts and videos on both Coles’ and Woolworths’ Facebook walls from Thankyou fans and celebrities such as Jules Lund, Chrissie Swan, Andrew Gaze, Rebecca Morse, Peter Helliar, Nicole Livingstone and Tim Costello.
 

Consumers shouldn’t assume ‘baked’ means fresh, says Coles

Defending allegations it misled consumers by masking imported bread as freshly baked products, Coles says consumers shouldn't assume 'baked' means 'baked from scratch.'

The supermarket giant told the Federal Court that standard industry practice could become an issue in proving whether consumers believe bread from Coles' bakeries is baked fresh on-site, AFR reports.

In order to properly defend the allegations brought forward by the ACCC, Coles needs to prove that the average consumer should or would assume that the word 'baked' means something other than 'baked from scratch.'

In June, the ACCC launched legal proceedings against Coles for supplying bread that's partially baked and frozen off-site, transported to Coles stores, ‘finished’ in-store and then promoted as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’.

While the ACCC claimed Coles actions create an unfair playing ground for those bakeries genuinely baking fresh products daily, the supermarket chain claims par-baked products are "commonly offered" for sale in supermarkets, fast food outlets, bakeries and restaurants.

Coles also explained that certain bread labels stated the product was 'Made in Ireland.'

 

Coles could extend supply chain restructure to convenience and liquor

Coles' plan to replace traditional, independent merchandising reps with its own panel of approved field agents is also being considered for its convenience and liquor stores.

BusinessDay obtained a confidential tender document setting out Coles' plans to restructure its relationship with suppliers and field agents, and proposing the new arrangements could be introduced at its 1500 Coles Express convenience store network as well as its liquor store brands – Liquorland, First Choice and Vintage Cellars.

Coles is said to be in the process of putting together a shortlist for its panel of approved field agents for supermarkets, after the first tender closed on Friday.

The new supply arrangements are expected to be introduced towards the end of this year, starting with five suppliers in its first two months, then offered to all suppliers by late 2015.

Coles announced the restructure in early June, arguing it would save the company millions of dollars annually.

The changes will see Coles become the arbiter of fees charged to suppliers by field agents and will allow the retailer to generate significant rebates.

Coles believes the move will deliver more value for suppliers by simplifying and standardising duties performed by field reps.

"One area suppliers tell us we could improve is how we work with their field force teams – reps they employ to support their brand in-store,” said a Coles spokesman

"So we are currently exploring options to make this service better for suppliers, better for our stores and most importantly better for customers."

 

British-Indian chef spices up Coles’ shelves

Coles is stocking a new range of Indian curry sauces on its shelves, created by British chef Anjum Anand.

The Spice Tailor range was launched in Britain two years ago in the upmarket supermarket chain Waitrose. Now, the range of eight sauces is coming to Coles’ supermarket shelves.

Anand cooked up the Spice Tailor range with the purpose of exposing non-Indians to different regional Indian cuisines. She also wanted to make her native food lighter and more accessible.

“I grew up eating and cooking Indian food. I love it and I wanted to make it easier for more people to enjoy delicious and healthy home-cooked Indian cuisine,” Anand said.

“Australia has such a vibrant food culture but Indian has often been overlooked, especially on supermarket shelves. We’re thrilled to be introducing the range and I hope that Australians will fall in love with The Spice Tailor and opt for a Punjabi Tomato Curry over a Pad Thai.”

The range was launched yesterday (3.7.13) with the help of marketing company Liquid Ideas, owned by Stuart Gregor. Gregor hosted a lunch in his home, attended by Food magazine, where Anand cooked up a banquet with her range of sauces.

She explored regional India by cooking with her Keralan Coconut Curry. Located in the south-west region of India on the Malabar Coast, this state is known for its abundance of coconuts. ‘Kera’ means coconut.

Anand cooked prawns with coconut curry, mustard seeds, oil and coriander. For those of the vegetarian persuasion, she modified this and substituted prawns with eggplant.

She used Punjabi Tomato Curry from Northern India to make a curry with paneer (cottage cheese) and capsicum. The meal also included Rustic Rogan Josh curry with lamb.

 “My food mantra is you need to enjoy what you eat,” Anand told Food magazine.

“I like to have a little bit of honesty in my food. So I want it to have some heritage. I’ve brought out some proper regional heritage of India so we’ve got Keralan curry, I’ve got a curry from Mangalore, and I’ve got the Punjabi tomato curry.”

Her range also includes the South Indian Mangalore Herb Curry, which has flavours of coriander, mint and coconut.

She said she hopes her range will show that not all curries taste the same.

“I really do believe that if we get people to try it and you like Indian food you’ll like this. We have our fingers crossed that we make enough noise to get everyone to try it,” Anand said.

The range of curry sauces will be on Coles’ shelves from Monday 8 July for $4.99 RRP.

 

Murray Goulburn plans new $60m milk facility

Milk processor, Murray Goulburn, will invest $60m in a new milk processing facility in western Sydney.

The company bought a 5ha site, formerly a quarry site, in Erskine Park.

Devondale general operations manager, Keith Mentiplay, said work on the site would begin soon.

"There is just over one year to go before we are scheduled to begin production and we are well on track to becoming the nation's most efficient producer of daily pasteurised milk," he said.

Earlier this year Murray Goulburn announced it planned to build two new facilities, with work already underway at the new Victorian plant at Laverton.

In April the company hinted it would be enlisting new suppliers throughout Victoria and entering new supply region to help meet the requirements of a landmark deal with supermarket giant Coles.

The deal, said to be worth $2 billion, will see Murray Goulburn supply Coles with house-brand milk for 10 years.

The deal includes the NSW-based cooperative Norco. The two cooperatives will replace house brand-suppliers Parmalat and Lion in these states.

 

Coles fined $61,000 for country of origin claims

Coles has paid six infringement notices totalling $61,200 for allegedly misleading representations about the country of origin of fresh produce in five stores.

The stores are located across Queensland, NSW, Western Australia and the ACT and the infringement notices refer to claims made between March 2013 and May 2013.

The fines follow an investigation by the Australian Competition and Consumer Commission after a complaint was made that Coles had displayed imported navel oranges and kiwi fruit under a board which read 'Helping Australia Grow' and accompanied by the Australian Grown symbol.

The ACCC also discovered the same signage at a number of Coles stores promoting the sale of imported asparagus and almonds.

While the overseas country of origin was correctly identified either by stickers on the produce, on its packaging or under the display bin, the ACCC says the signage gave consumers the impression the produce was Australian grown.

"Consumers should be able to rely on the accuracy of claims about food, particularly when they are prepared to pay a premium for products made in Australia. Misleading country of origin claims can also have a significant impact on the competitive process and hurt the local economy," ACCC chairman, Rod Sims, said.

"While this does not appear to be a case of widespread or systemic conduct, ‘Helping Australia Grow’ is a significant national campaign driven hard by Coles to advertise its fresh produce. This is a lesson to all retailers that they need to take care when undertaking significant advertising campaigns to ensure consumers are not misled by those campaigns."

According to Coles, the misrepresentation of imported produce as Australian grown was unintentional – the result of stock being relocated within stores but not the corresponding promotional imagery.

This isn't the only instance which has seen the supermarket giant fall under the gaze of the ACCC.

Just last month the competition regulator launched legal proceedings against Coles for engaging in false, misleading and deceptive conduct in the supply of bread that was particually baked and frozen off-site, then transported to Coles stores, 'finished' in-store and marketed as 'Baked Today, Sold Today' or 'Freshly Baked In-Store'.

The ACCC is also investigating the conduct of both Coles and Woolworths in regards to their dealings with suppliers, amid accusations both supermarket chains use bullying tactics to force prices down.

 

Will $1 bread be burnt by new Goodman Fielder contract?

A rumoured contract between foods group Goodman Fielder and Coles could see the end of the supermarket giants' $1 private label bread offering.

According to SMH, GF shares surged today (25 June) amid news the brand had negotiated a contract, believed to be with Coles, after GF claimed earlier this year that it needed a price rise to continue supply to Coles beyond the end of June.

The contract's announcement overshadowed a profit downgrade for GF, with the group expecting a pretax profit of between $195m and $200m, down from median analyst forecasts of around $202.5m for the year to June.

"This result includes a significant increase in direct marketing expenditure," the company said, which will position it for growth in the new financial year.
 

Coles poised to increase dairy processor payments

With a number of milk processors announcing increases in opening milk prices for the next season, Coles is being pressured to stay "true to their word" and increase its payments to processors.

Fonterra, Murray Goulburn and Warnambool Cheese and Butter recently announced stronger opening milk prices, crediting the rise (20 percent, on average) to global demand and the weakening Australian dollar.

According to Queensland Country Life, the supermarket giant has "rise and fall" clauses in its private label milk contracts and has announcedit will ingredient processors' payments to reflect the higher farmgate prices.

"If they are true to their word the price for Queensland dairy farmers supplying Coles with fresh milk should see their price rise by at least 24 percent, which is the increase announced by Murray Goulburn," said Queensland Dairyfarmers' Organisation president, Brian Tessmann.

A Coles spokesperson said the company will be reviewing and substantiating claims and cost price rises and then deciding whether to absorb the increases or pass them onto consumers.

There's no doubt the dairy industry will welcome any move by the supermarkets away from their $1 pricing schemes, which have been heavily criticised by dairy farmers and are belived to have contributed to the collapse of two West Australian dairies, one being Lactanz Dairies, the state's biggest dairy producer.