Code of conduct nearing completion

The code of conduct being developed to manage relationships between retailers and suppliers is nearing completion, says the Australian Food and Grocery Council (AFGC).

According to the ABC, the AFGC has spent months developing a dispute resolution mechanism with the supermarket duopoly – Coles and Woolworths.

The next step is to host a roundtable with a number of industry stakeholders such as the National Farmers Federation, which earlier this year pulled out of negotiations, arguing the code should be mandatory, not voluntary.

The AFGC hopes to hold the roundtable in the next few weeks.

The code is centred on the principles of codifying contractual arrangements between suppliers and retailers, ensuring that efficiency in the supply chain is achieved, and that the supply chain is not overregulated.

CEO of the AFGC, Gary Dawson, believes that a voluntary code would be just as effective as a mandatory one in ensuring the participation of the supermarket giants, especially considering failure to sign up could result in poor supplier relationships.

“It would be very difficult for suppliers given how competitive the market is. An important element of the code is about ensuring efficient retailer/supplier relationships,” Dawson told Food Magazine.

“To Woolworths’ and Coles’ credit, they have taken that on board and we are working through those issues.”

Dawson said that the AFGC is working with the retailers to develop an effective code that provides more contractual certainty, encourages investment in innovation, provides for appropriate sharing of risk and an effective dispute resolution mechanism – all without adding unnecessary compliance costs on suppliers.

Earlier this year, the ACCC announced it would be investigating the supermarket duopoly amid claims Coles and Woolworths bully their suppliers to force prices down.

The investigation is considering claims that the supermarkets impose penalties on suppliers that aren't part of the terms of trade, favour homebrand products, threaten to remove products from the shelves if extra payments or penalties aren't paid and fail to pay prices agreed with suppliers.

A key element of the code of conduct will be an examination of the shelf space supermarkets allocate to private label products.


 

Coles deal a rise in business for Toowoomba bakery

A multi-million dollar agreement between supermarket giant Coles and Homestyle Bake will see the Toowoomba bakery showcase their products on a national stage.

According to The Chronicle, the family-owned and operated bakery has signed a deal to beef up its baked goods supplies to the supermarket chain.

The business currently supplies about 20,000 loaves a week to 124 Coles stores in south-east Queensland.

"The meeting was essentially about further growth and focusing on increasing our volume to Coles," Homestyle Bake director, Brett Pascoe, told The Chronicle.

Pascoe said the deal with Coles is an opportunity for the business to grow further, having already expanded its staff from 11 when the company was established in 989 to more than 200 today.

"The agreement will allow us to grow even more.

"It will really allow us to put back even more into the community in which we operate from," he said.

Earlier this year, Coles conducted an extensive research program of its customers and found they wanted access to more local products from local suppliers and producers.

While the supermarkets' bolstered alliance with Homestyle Bake is in-line with this sentiment, just last week legal action was launched against it by the ACCC for engaging in misleading and deceptive conduct.

It's reported Coles bread marketed as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’, has actually been partially baked and frozen off-site – in places as far away as Europe and Ireland – transported to Coles stores and then ‘finished’ in-store.

In a statement issued by Coles, the supermarket expressed its intention to "vigorously defend the action brought against it by the ACCC. 

 

Coles’ ‘fresh’ baked products up to six months old

The not-so-fresh bread at the centre of Coles' latest controversy is baked up to six months before it's sold and as far offshore as in Europe.

Coles has once again hit the headlines this week, with the ACCC launching legal action against the supermarket giant for engaging in false, misleading and deceptive conduct.

It's alleged the supermarket has been supplying bread that is partially baked and frozen off-site, transported to Coles stores and then ‘finished’ in-store. The products are promoted as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’.

The legal action covers various ‘Cuisine Royale’ and ‘Coles Bakery’ branded bread products.

According to SMH, croissants, danishes and muffins are being shipped frozen from Germany, Belgium and Denmark.

Janet Blythman, head of the National Baking Industry Association, said a range of baked goods, which when frozen have a shelf life of six to 12 months, are shipped from overseas – a process which takes at least 10 weeks from Europe.

Coles, which has announced it will vigorously defend the allegations, isn't the only supermarket chain engaging in such practices.

According to SMH, Katia Abouthrouche, whose husband manages an IGA store in Annandale, said their bread came from Germany and was frozen until it was needed, and then baked in the morning.

"The people love it fresh," she said.

A Woolworths spokesperson, however, has confirmed all Woolworths bread is made in Australia.

 

How Coles got busted for its bread

The former Victorian premier, Jeff Kennett, played an integral role in the latest round of bad headlines for Coles, with the supermarket giant accused of misleading and deceptive conduct.

Last year, Kennett got tongues wagging when he started enquiring about the origins of his bread and muffins, sending the baked goods to the ACCC and sharing his thoughts with talkback radio listeners, the SMH reports.

The consumer watchdog hadn’t received any complaints about Coles’ bread until then, but with Kennett’s profile and growing interest in the his cause, was forced to dig deeper.

Yesterday, the ACCC issued a statement announcing that it had launched legal action against the supermarket, which it accused of engaging in deceptive and misleading conduct, specifically in regards to ‘Baked Today, Sold Today’ and ‘Freshly Baked In-Store’ claims on various ‘Cuisine Royale’ and ‘Coles Bakery’ branded bread products.

The ACCC says the marketing of these products is misleading as the bread is partially baked and frozen off-site, transported to Coles stores and ‘finished’ in-store.

According to SMH, court documents have shown that the bakery products were either made in Ireland or had been initially baked in different locations in Australia, some of which were frozen, reheated and then sold as “freshly-baked in-store.”

ACCC chairman Rod Sims said, "There are two important issues at stake. First, consumers must be able to make informed purchasing decisions. Bread is an important grocery basket staple and customers need to be confident in claims made about food they buy.

"We believe consumers are likely to have been misled by Coles that the entire baking process, including preparation, occurred in-store, when in fact the bakery products were prepared and partially baked off site, frozen, transported and then ‘finished’ in store. Indeed, the Cuisine Royale products were partially baked overseas.

"Second and just as important, is the detrimental impact on the businesses of competitors. Misleading credence claims can undermine the level playing field and disadvantage other suppliers. In this case those suppliers are the smaller, often franchised bakeries that compete with Coles," Sims said.

Sims has also said that a Queensland consumer complained to the Queensland fair trading office when they found their “baked today” bread was actually frozen in the middle.

The action brought against it could see Coles hit with fines of up to $1.1 million per offence.

In a statement issued by Coles, the supermarket expressed its intention to "vigorously defend the action brought against it by the ACCC. 

"Coles has only just become aware of the ACCC legal action and will fully examine the ACCC statement before making any further comment," the statement reads.

 

 

Coles are the piggy in the middle of animal welfare confrontation

Last week, Coles supermarkets began selling shopping bags on behalf of animal rights campaigners Animal Australia. Following a backlash from farmers, Animals Australia withdrew the bags. But the stoush raised some important questions about the growing power of ethical consumption, and about who gets to decide how much animal welfare is enough.

The animal rights group produced 15,000 bags displaying a little winged pig who encourages consumers to “believe in a world without factory farming”. They were to be sold in 500 metropolitan Coles Supermarkets. The National Farmers’ Federation (NFF) urged producers to boycott Coles, saying Animals Australia were “anti-farmer”.

Since ending the campaign, Animals Australia has raised enough in donations from sympathetic Australians to secure valuable air time for their television ad. According to the Canberra Times, Coles also received huge support in favour of the bags – leading many to ask why farm lobby groups are so strongly opposed the campaign.

Why don’t farmers like animal welfare campaigns?

The supermarket giant is trying to cater for the growing demand for high-welfare meat and eggs while remaining supportive of producers. But several farming lobbies called for immediate action against Coles in response to the bag sales.

Farmers groups didn’t object to a campaign to end factory farming. They objected to Animals Australia and its platforms. A representative of the pork lobby expressed his outrage that Coles would partner with an “anti-meat” organisation, and described Animals Australia as campaigning for a “meat-free world”.

 

At the core of any animal rights ideology is the objective to reduce suffering, as animal activists explain. Getting sows out of stalls and chickens out of cages is the first step in this process. Farmers say they also care about welfare. But farming lobby groups such as the NFF feel vulnerable to the effects of marketing campaigns by animal rights groups.

While animal welfare is important to farmers, there is immense pressure to supply chicken, pork and eggs to consumers at a low cost. This is why the factory farms that Animals Australia are protesting against exist. The Farmers Federation says it works with respected animal welfare groups and the government to make improvements in the industry. But they seem to think there is no place in the debate for a group that campaigns for animal rights; a group they describe as “extremist animal activist[s]”.

Farmers label the group as extremists because they campaign for an end to rodeos, no more kangaroo culling and no more culling of introduced animals. But these are different matters: if farmers are opposed to Animals Australia’s anti-factory farming campaign because it is based on false claims, they should tell the public what they are doing to improve farm animal welfare.

Can high-welfare foods work for supermarkets and producers?

Rather than trying to turn Australia vegan, Animals Australia told the Age they want Australians to “eat less and pay more [for meat and eggs] – ensuring that the bottom line for producers can remain positive”. To achieve this requires a dramatic shift in thinking by consumers and support for supermarkets and farmers to supply high-welfare foods to the public.

An open conversation between producers, supermarkets, and consumers on the realities of farming, include the unpleasant truths, may help Australia move forward and implement more animal-friendly farming practices.

Both meat farmers and Animals Australia agree that consumers need to know more about farming in Australia. The Farmers Federation say on their website they are dedicated to increasing awareness of farming’s role in society.

When transparency and labelling standards are improved, it will be the consumer who determines the importance of animal welfare – and rights – in the scheme of things.

The Business Benchmark on Farm Animal Welfare has found welfare is not keeping up with consumer demands. Consumers' concern makes them sensitive to campaigns such as “Make It Possible” and open to alternative products and lifestyles.

On the surface, the farming organisations who were calling for an immediate boycott of Coles have won the debate. But they have done little to convince consumers they needn’t worry about farm animal welfare.

Australian consumers, and subsequently legislators, will determine the direction for farm animal welfare in the future. It is in the best interests of the meat and egg industries to reassure consumers that animal welfare is a priority. Otherwise Animals Australia will have gained much more from the proposed boycott than anticipated.

Sally Healy was the 2011 recipient for the RSPCA Australia Scholarship for Humane Animal Production Research.

Georgette Burns does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

This article was originally published at The Conversation. Read the original article.

 

ACCC launches action against Coles for misleading bakery claims

The Australian Competition and Consumer Commission (ACCC) has launched proceedings in the Federal Court against Coles.

The ACCC is alleging Coles has engaged in false, misleading and deceptive conduct in the supply of bread that was partially baked and frozen off-site, transported to Coles stores and ‘finished’ in-store. The products were then promoted as ‘Baked Today, Sold Today’ and/or ‘Freshly Baked In-Store’ at Coles stores with in-house bakeries.

The legal action covers various ‘Cuisine Royale’ and ‘Coles Bakery’ branded bread products.

The ACCC alleges that labels on these par baked products stating ‘Baked Today, Sold Today’ and in some cases ‘Freshly Baked In-Store’, and nearby prominent signs stating ‘Freshly Baked’ or ‘Baked Fresh’, were likely to mislead consumers into thinking that the bread was prepared from scratch in Coles’ in-house bakeries on the day it was offered for sale.

Coles also uses these same representations to promote bread that has been made from scratch in Coles’ in-store bakeries. A statement issued by the ACCC says it is "concerned that Coles’ lack of distinction in its promotional representations between bread products that are freshly prepared from scratch and par baked products is misleading to consumers and places competing bakeries that do freshly bake from scratch at a competitive disadvantage."

ACCC chairman Rod Sims said, "There are two important issues at stake. First, consumers must be able to make informed purchasing decisions. Bread is an important grocery basket staple and customers need to be confident in claims made about food they buy.

"We believe consumers are likely to have been misled by Coles that the entire baking process, including preparation, occurred in-store, when in fact the bakery products were prepared and partially baked off site, frozen, transported and then ‘finished’ in store. Indeed, the Cuisine Royale products were partially baked overseas.

"Second and just as important, is the detrimental impact on the businesses of competitors. Misleading credence claims can undermine the level playing field and disadvantage other suppliers. In this case those suppliers are the smaller, often franchised bakeries that compete with Coles," Sims said.

In a statement issued by Coles, the supermarket expressed its intention to "vigorously defend the action brought against it by the ACCC. 

"Coles has only just become aware of the ACCC legal action and will fully examine the ACCC statement before making any further comment," the statement reads.

 

Soft plastics recycling program launched in Canberra

The Australian Food and Grocery Council, together with Coles and the RED Group, has launched a soft plastics recycling program in Canberra today, to help mark World Environment Day.

The joint initiative will be rolled out across Canberra's eight Coles stores in a move to reduce the amount of soft plastic packaging going to the city's landfill.

AFGC CEO, Gary Dawson, "Food and grocery brand owners take the environmental impact of their packaging material seriously and so are pleased to support this product stewardship program. The good news is that recycling plastic not only reduces the amount of waste going to landfill, but it also reduces the need to use precious natural resources."

The program will see Coles customers drop off soft plastic packaging from food and grocery items as well as their plastic shopping bags which will be collected by the RED Group and sent to Melbourne, where it will then be recycled by Replas into outdoor furniture and other products.

These products will then be donated to schools and will also be available for purchase.

RED Group director, Liz Kasell, said the launch in Canberra resulted from the collaboration of Coles, RED Group, Replas, and key Australian food and grocery brands including Bird’s Eye, McCain, Helga’s, Sunrice, Kellogg’s, Tip Top, Abbott’s Village Bakery, Wonder White, Arnott’s, Cadbury and Kleenex. 

 

Animals Australia asks Coles to withdraw Make it Possible bags

Animal activist group Animals Australia have asked supermarket giant Coles to withdrawal their Make it Possible shopper bags from stores.

The decision to pull the bags was a direct response of the ‘vicious campaign’ launched by the National Farmers Federation (NFF) against Coles and Wesfarmers.

"It is a dark day for animal welfare in this country when a retailer’s support for an animal welfare initiative is vehemently opposed by the farming lobby,” said Animals Australia Campaign Director, Lyn White.

“This decision was not made lightly but in the midst of this distracting attack, the animals at the heart of this issue were being disregarded and forgotten. We also could not stand by and watch an act of generosity from Coles be turned against them.

“It is one thing for these groups to defend the live export trade, but to actively oppose a public initiative encouraging consumers to use their purchasing power to get laying hens out of cages and a better quality of life for pigs and meat chickens in this country is deplorable.” 

White says that while some members of the farming community may see the decision to pull the bags as a victory, she urges them to reflect on the message that they are sending to the wider community.

The alliance between Coles and AA was designed to provide a platform for farmers to move to more humane systems, but White says this message has been lost.

She adds that the NFF’s reaction to the campaign has only increased the groups’ determination to provide factory-farmed animals with the representation they need, and the group will bring back their successful Make it Possible television commercial to air from next Monday.

“Assisting us to keep this ad on air will provide the many thousands of Australians who have been angered by the farming lobby's attack on Coles with the opportunity to respond in the most positive way.”

 

Cost of doing business forcing processors offshore

New Zealand's primary producers are reaping the benefits of the high cost of doing business here in Australia.

Coles' Robert Hadler said food processors are heading to New Zealand because labour costs are too high, with Australia paying its food manufacturing workers $10 more an hour than their Kiwi counterparts.

According to ABC, John Brent, chair of Ausveg, agrees costs are too high, referrring specifically to power, water and labour.

"If you want a future manufacturing industry in Queensland or Australia, these things need to be reviewed and understood," he said.

Unsurprisingly, New Zealand growers couldn't be happier. Head of the peak growers group, Vegetables New Zealand, said at the Ausveg conference on the Gold Coast over the weekend that the industry is experiencing a resurgence.

"Beetroot crops have come back, carrots have come back, and it's come back to the region where it was originally; back into Hawkes Bay, back into parts of the South Island," he said.

 

Woolworths launches its own price cutting campaign

In light of the success of Coles' Down Down campaign, fellow supermarket giant Woolworths has announced that hundreds of its best selling products will have their prices cut by up to 33 percent.

On average, Woolworths customers will find between 40 and 50 Every Day Value prices in every supermarket aisle, with discounted products including MSA Australian Beef, sliced and shaved ham, Tip Top bread, Western Star butter, Arnott's Multipacks and International Roast Coffee.

"While we know that Woolworths is consistently cheaper than Coles on a comparable basket across the store, we are constantly looking for new ways to offer our customers ways to save," said Tjeerd Jegen, managing director of Woolworths supermarkets.

"The hundreds of Every Day Value price cuts that we are launching are just the beginning of our commitment to delivering more savings every day on essential family items. These prices will stay down for at least six months, and we have even more great savings in store for our customers – every day."

The new campaign is very similar to that of supermarket rival, Coles, which added 40 new products to its Down Down range last month, including iconic brands like Vegemite, Cornflakes and Milo.

Woolworths insists it's not playing copy-cat, with a spokesperson telling Mumbrella, "We play our own game."

A statement issued by Woolworths says the campaign was prompted by consumer feedback which found that extra savings at the checkout are a top priority.

"Our customers have told us that finding savings in their family budget is more important than ever. It’s our job to make life easier for our customers, every day, by making sure they are saving on the essential items that they buy most often," Jegen said.

Only time will tell if Woolworths cops the same bad press that Coles has for its price-cutting efforts.

While consumers might enjoy cheaper shopping bills, food producers and the Australian Food and Grocery Council have criticised Coles for favouring its own private-label products over its suppliers and not supporting Australian farmers.

But according to The Land, Woolworths will be absorbing 100 percent of the price reductions for meat and produce, but discounts for packaged groceries will be funded by the suppliers, who wil enjoy more shelf space in anticipation of greater volumes of their products being sold.

 

Coles praised for fighting hunger with Foodbank award

Supermarket chain, Coles, has been presented with Foodbank's Patron's Award, recognising its ten year partnership with the food relief organisation.

The Governor-General Quentin Bryce presented the award over the weekend at an event at Admiralty House, attended by 80 of Foodbank's supporters.

The Patron's Award is presented to a company that has demonstrated unrivalled commitment over time to furthering Foodbank's objectives, and has acted as a role model to other organisations.

Over the course of its ten year relationship with the organisation, Coles has contributed to 10 million meals beginf generated for Australians in need. In 2012 alone, Coles donated 1.26kg of food and groceries.

Foodbank Australia’s chairman, Enzo Allara said "As a Foodbank partner, Coles is continually surpassing its commitment to provide food donations, ensuring that food rescue is integrated into its supply management procedures and always looking out for new ways it can support Foodbank’s efforts.

"Coles is a committed partner in our goal to end hunger in Australia and for that we would like to recognise and thank them for their tireless efforts over the last ten years," he said.

Foodbank is a non-denominational, non-profit, national organisation with distribution centres in all states, the Northern Territory and eight regional centres.

The organisation is endorsed by the Australian Food and Grocery Council (AFGC) as the food industry's charity partner, and in 2012, donated 24 million kilograms of food, creating 32 million meals.
 

Coles’ head of operations moves to Target

Wesfarmers has recruited the head of operations of Coles, Stuart Machin to run discount department store Target.

The move comes after the shock resignation of Dene Rogers.

Machin has been Coles’ stores and development operations director since 2008, when Wesfarmers bought the supermarket chain started transforming it.

Wesfarmers managing director Richard Goyder said Machin played a vital role in the development and opening of new stores during Coles’ five year turnaround plan.

“He has impressed everyone with his capacity to develop a successful, enthusiastic team with a strong focus on outstanding execution in stores,” he said.

Machin worked in British supermarkets like Sainsbury and Tesco before joining Coles.

"I am delighted to be appointed to lead Target. It is a privilege to lead such an iconic Australian brand and I look forward to getting started,” he said.

Wesfarmers said Rogers resigned so he could take up other opportunities, Brisbane Times reported.

He had been running Target for 18 months before Wesfarmers revealed his resignation today.

Options XPress analyst Ben Le Brun said the market was surprised at Rogers’ resignation but it quickly rallied after news of his replacement came out.

“Even though this would have come as a bit of a surprise – and the market doesn’t like surprises – it will be very glad that Wesfarmers has been able to fill the gap relatively quickly,” he said.

He also added that Wesfarmers’ choice of the new Target head from within its own ranks was also encouraging.

Target is employing a turnaround strategy to enhance customer service and strengthen its mid-tier position.

The department store’s sales for the six months to December 31 rose by 1.2 per cent to $2.1 billion.

Coles praised for complying with olive oil standards

Supermarket giant, Coles, is being praised by the Australian Olive Association for promising to ensure its own range of olive oils will meet the Australian Standard by the end of the year.

Coles has announced that all Coles Brand olive oils, whether Australian or imported, will by bully compliant with the Australian Standard for Olive Oils and Olive Pomace Oils by the end of December.

The Standard aims to protect the consumer by defining different grades of oil, including extra virgin, which at the moment are quite confusing. It also details the testing methods which can be used to ensure that products for sale are what they claim to be on the label.

Olive oil labelling at the moment can confuse consumers, with 'Light' not referring to any health characteristic of the product but rather the oils flavour and colour. There are also issues surrounding the labelling of extra virgin olive oils (widely recognised as the highest grade olive oil) with genuine extra virgin producers frustrated with cheaper, imported products marketing their product as extra virgin when in fact that's not the case.

Speaking on Coles' compliance, CEO of the Australian Olive Association, Lisa Rowntree, said "It is really great that Coles have agreed to make their own branded products comply. We hope that other brands including market leaders Moro and Always Fresh together with other supermarket home brands will quickly follow suit."

The AOA worked with industry stakeholders in the development of the voluntary standard which was finalised in 2011 and has since been actively encouraging olive oil suppliers and supermarkets to comply. Australian oils that do comply with the Australian Standards as well as the industry’s own Code of Practice carry the symbol above.