Barnaby Joyce calls for clearer country of origin labelling

Federal Agriculture Minister Barnaby Joyce has called for a country of origin framework that is unambiguous and compulsory.

According to Perth Now, Joyce promised to introduce a new, simpler labelling system for consumers, which would clearly state the country where the produce was grown, although there would be no bans on imported frozen products.

The Daily Telegraph reports that Minister Joyce has spoken to the Prime Minister about making changes to Country of Origin Labelling and will be presenting a White Paper with proposed changes soon.

“This is a good first step and we look forward to seeing solutions in the upcoming White Paper." said CHOICE spokesperson Tom Godfrey. "We now hope that any proposed country of origin system is more meaningful and clear for consumers,” 

Following the recall of frozen berries last week, Patties has increased its sample testing to 100 percent of all batches of imported frozen berries from all countries, not just China, for any microbial and viral markers such as HAV.

There is now 18 cases of hepatitis A linked to the recalled berries, but Patties said there is still no detailed viral analysis from accredited laboratories that proves any firm association of Hepatitis A Virus (HAV) with the recalled products.

CHOICE called on the Government to take action on country of origin labelling, launching a petition that resulted in over 17,000 petition signatures in just three days.

"This morning we released a new report showing almost half of the 55 frozen fruit and vegetable products we surveyed carried unclear or confusing origin statements."

CHOICE investigated the country of origin labelling on 55 packs of frozen mixed fruits and mixed vegetables and results show that 25 out of 55 products contain vague and unhelpful claims.

Some of the worst claims include "Packed in New Zealand", "Packed in Chile from imported and local ingredients" and "Processed in Belgium".

“These claims offer very little information about a product’s origin and are largely meaningless to consumers,” says CHOICE spokesperson Tom Godfrey.

Australia has recently experienced a growth in food imports. The value of frozen vegetable imports in 2013-14 moved up 12% to $256 million, and China – one of the countries associated with the latest food safety scare – remains our third largest source in this category.

 

The case for country of origin branding

Provenance is increasingly important to consumers in Australia – more and more they are becoming interested in where the food they are buying has come from.

This reflects a growing awareness of health and safety issues surrounding what we eat and also the positive consequences of ‘buying local’; and driven by concerns about health and safety, the issue of provenance is even more pronounced amongst the bourgeoning Asian middle class.

This is all good news for Australia’s farmers, manufacturers and food processors because there is no question being Aussie is an advantage in the marketplace. Our clean, green image, coupled with the recognition of our high health and safety standards for growing and processing food, gives the ‘Australian brand’ a flying start in the marketplace.

Research shows that country of origin branding has a direct impact on purchasing behaviours – both here and overseas. While many Aussie businesses are competing against cheaper products, particularly in the Asian marketplaces, those selling genuine Aussie products have a card up their sleeve that can help them get ahead – and that is country of origin branding. There is very often a premium that consumers will pay for genuine Aussie products and getting this can be crucial for our exporters and import competitors alike.

Aggressive country of origin branding can also reinforce corporate philosophies – boosting staff morale and demonstrating corporate social responsibility. It can open up new business opportunities when tendering for government contracts and major projects.

The green-and-gold Australian Made, Australian Grown (AMAG) logo is the only registered, certification trade mark in Australia across all 34 classes of goods. It instantly establishes the connection of the product carrying it with Australia; and this happens both here and overseas.

According to Roy Morgan Research, over 98 percent of Australians recognise the logo, and 89 percent trust it to identify genuine locally made and grown goods. Research by YSC Online also found that products carrying the logo in export markets were more likely to have increased sales than those which did not.

Today more than 2,000 Australian businesses are registered to use the logo on over 15,000 products sold here and around the world. Indeed for many small businesses involved in export, the logo, with its proven, established links to Australia, becomes their strongest brand in the marketplace.

The same can also be said for state, territory and local government branding activities overseas, where the AMAG logo creates the overarching connection to Australia and therefore the framework for their ‘sub-brand’.

The Australian Made Campaign has welcomed the private industry initiative being championed by Andrew Forrest of Fortescue Metals Group – the Australian Sino Hundred Year Agricultural and Food Safety Partnership (ASA 100), to position Australia as a primary food and fibre supplier to China. The ASA 100 proposal, with its emphasis on a collaborative, cohesive approach to export marketing incorporating a single brand and a single logo, is a fantastic opportunity for consistency in labelling and a global approach for our food exporters.

The idea of the public and private sectors working together to build the global impact of ‘brand Australia’ is an exciting one. The power of consistent branding, both here and overseas, cannot be overstated. There is definitely a pivotal role for the Australian Made, Australian Grown logo in that strategy.

It is also important to be aware of the legal requirements. All country of origin claims must meet the following criteria:

• Australian Made: The product has been substantially transformed (made) in Australia and at least 50 percent of the production cost has been incurred in Australia.
• Australian Grown: All significant ingredients are grown in Australia and all significant (if any) processing has been carried out in Australia.
• Product of Australia: All significant ingredients come from Australia and all or almost all of the manufacturing/processing has been carried out in Australia.
• Australian Seafood: All significant ingredients are grown/harvested in Australia and all significant (if any) processing has been carried out in Australia.

It is also important to note that, for food products, the rules for using the AMAG logo with an ‘Australian Made’ claim are more stringent than those applying under the government’s Australian Consumer Law. A stricter set of criteria about what actually constitutes ‘substantial transformation’ was introduced several years ago to reduce any confusion about a food product’s true country of origin.

It is for this reason that consumers look for the AMAG logo when they shop so they can be sure that they are buying genuine Aussie products and produce.

 

Choice calls for further simplification of ‘made in’ claims

Consumer watchdog Choice is calling for further simplification of the country of origin framework for food products.

While the watchdog backs the Standing Committee on Agriculture and Industry’s recommendation that food country of origin labelling needs to change, Choice believes that the committee needs to go further by creating a more simplified framework.

Choice director of campaigns and communications, Matt Levey says that the proposed solution to the current system runs the risk of being equally as confusing as the new framework which has a focus on percentages of the amount of local inputs versus imported ingredients.

“It’s not clear that this will be a significant improvement for already confused shoppers,” said Levey.

“Choice is calling for a simplification of country-of-origin labelling, giving consumers the information they want, getting rid of the information they don’t, and testing the revised framework to make sure it’s meaningful.

“Our research shows many consumers are passionate about where their food is grown, and where it is manufactured, but are confused about current labelling requirements. We strongly urge the Federal Government to undertake direct consumer research before making any changes to the current labelling framework,” Mr Levey says.

The Committee’s proposal for the three claims are as follows:

  • ‘Grown in’ – 100 per cent content from the country specified;
  • ‘Product of’ – 90 per cent content from the country specified;
  • ‘Made in [country] from [country] ingredients’ – 90 per cent content from the country specified;

For products which can’t make these premium claims, the Committee recommends two qualified claims:

  • ‘Made in [country] from mostly local ingredients’ – more than 50 per cent Australian content;
  • ‘Made in [country] from mostly imported ingredients’ – less than 50 per cent Australian content.

Levey says that a Choice survey of 700 members found that only 12 percent were able to accurately identify the meaning of ‘Made in Australia’.

“Most consumers won’t know that ’made in Australia from mostly local ingredients‘ is any different from ’Made in Australia from Australian ingredients‘,” Levey says.

“One solution would have been to qualify the country of the characterising ingredient or ingredients. For example, a frozen vegetable mix made in Australia with some imported vegetables and Australian carrots and peas could state that it is ‘Made in Australian with Australian carrots and peas’,” Mr Levey says.

 

Imported prawns labelled as Australian: Prawn Association

The seafood industry is looking for technology which can decipher if imported products are being sold as Australian, a practice which the Australian Prawn Farmers Association describes as “rife.”

According to the ABC, Helen Jenkins from the Australian Prawn Farmers Association said some Australian retailers are mislabelling cheaper, imported prawns as Australian.

“It’s rife. It’s fraudulent,” she said. “Some of the retailers are selling imported prawns as Australian.

“It’s not fair for consumers.”

The industry is searching for technology which can identify fraudulent labelling, and Jenkins said there may be some solutions in testing technology used in other food industries.

The industry is calling for clearer labelling of seafood products, with Chris Calogeras from the Australian Barramundi Farmers Association claiming it would help to reduce confusion amongst consumers.

"Barramundi has an iconic Australian name and so when people buy Barramundi they assume their buying Australian fish, and their not,” he said.

The ABC reports that between 5,000 and 6,000 tonnes of barramundi are produced in Australian each year, valued at $50-60 million. Approximately 1,500 tonnes are wild-caught, and 13,000 tonnes are imported.

Helen Jenkins said prawn farming could be as much as 17 times bigger in Australia if red tape was removed for local producers and clearer labelling was introduced, with overseas investors keen to buy into production systems in Australia.

Each year, Australia produces about 4,000 tonnes of prawns in ponds, 22,000 tonnes are wild caught and 46,000 tonnes are imported.

Just last week a new campaign promoting accurate labelling was announced, with chef Matthew Evans partnering with Greenpeace and the Australian Marine Conservation Society to drive reforms.
 

Australian Made calls for mandatory country of origin labelling

In light of a recent announcement from FSANZ, the Australian Made Campaign has renewed its call for mandatory country of origin labelling across all food products.

According to Australian Made, Food Standards Australia and New Zealand (FSANZ) were instructed to develop a proposal to extend country-of-origin labelling across all primary food products for retail sale as part of the government’s response to the Review of Food Labelling Law and Policy in 2011.

However it was revealed this week that mandatory country of origin will not be extended to a small range of unpackaged foods including game meats, poultry other than chicken, eggs and cheese.

CEO of Australian Made, Ian Harrison, said that the he was disappointed the proposal had been scrapped .

“Food labelling requirements should be clear, straightforward and above all consistent – all food, packaged or unpackaged, should be required to carry a country-of-origin label,” said Harrison.

“Why should fresh chicken, for example, have to carry a country-of-origin label, but not duck or quail? Why should sliced ham have to carry a country-of-origin label, but not sliced cheese?”

“Consumers want to be able to buy with confidence, and a big part of this is knowing where their food comes from,” Mr Harrison said.

The Australian Made Campaign has called for mandatory country-of-origin labelling across all food products in numerous submissions, including to the current House of Representatives inquiry into food labelling.

 

Seafood industry calls for ‘country of origin’ labels

Nearly three-quarters of the seafood consumed by Australians is shipped from overseas, but most diners assume the seafood served in restaurants is locally sourced, the seafood industry said.

Research by the Australian Barramundi Farmers Association showed 60 percent of the 20,000 tonnes of barramundi eaten by Australians each year is from foreign fisheries, Good Food reports.

The heads of four major seafood bodies, including the National Seafood Industry Alliance, want seafood labelling laws to be extended to the restaurant industry, which is exempt.

Country of origin information should be published next to seafood dishes on menus so that consumers can be “protected from deception", they said.

“When people order barramundi, they just think it’s Australian,” said Scott Wiseman of the Seafood Industry Alliance. “There’s a requirement to know the fish species, but not whether it’s Australian. They have the right to make a full purchasing decision.”

Helen Jenkins of the Australian Prawn Farmers Association told the Federal parliamentary inquiry into country of origin labelling the Northern Territory had successfully applied labelling of origin laws to all its food sectors, including restaurants, in 2008. It remains the only jurisdiction to do so.

“It’s time for uniformity across Australia,” she said. "We'd like it to be legislated."

He said research of dining behaviour showed the country of origin of a product did not feature among the top factors that swayed purchasing decisions.

“We ranked a number of different factors, included origin, local produce, nutritional content. They were the eighth, ninth order issues. Primary order issue was the quality of product,” he said.

The seafood industry is the latest to be investigated by the inquiry, following the beekeeping and pork industry.

 

Cider Australia pushes for clearer country of origin labels

Cider Australia is pushing for clearer country of origin labelling on cider bottles, as the Federal Parliament’s labelling inquiry heads to Melbourne this month.

At recent hearings in Sydney and Canberra, industry groups said current labelling is too confusing for customers, ABC Rural reports.

Cider Australia president Sam Reid said consumers should be able to identify what they're buying.

"We estimate that in Australia probably 50 to 60 per cent of all cider is manufactured using foreign concentrate, most of that coming from China,” Reid said. "We just want to even up the playing field, to make sure that people are really aware of what it is they're putting in their body."

Reid says whether the apples used to make the cider are from Australia, New Zealand, England or China, it needs to be clearly labelled on the bottle.

For New Zealand cider makers, discussions around country of origin labelling is still in its infancy.

Justin Hall, managing director of the Redwood Cider Company and a member of New Zealand's Fruit Wine and Cider Makers Association, says he'll be watching Australia's labelling regulations with interest.

"It's a hot topic right across the food industry in New Zealand. It's early days in the conversation. It's only been raised in roundtable discussions within our own association and we haven't made any formal submissions. But we think its probably going to be a positive for us."

He estimates 90 per cent of New Zealand's cider is made from local fruit.

Last month, the Australian Made campaign's chief executive Ian Harrison, together with compliance and policy manager Lisa Crowe, appeared before the House of Representatives Standing Committee on Agriculture and Industry in Canberra and gave evidence to into its country of origin food labelling inquiry.

Harrison and Crowe made recommendations to the committee on how food labelling laws could be improved to support Australian growers and manufacturers and stated that an effective country-of-origin labelling system that is both understood and trusted by consumers, will help combat companies that are “attempting to mislead consumers regarding their products’ true country-of-origin.”

 

Country-of-origin labelling should be revised without government regulation, AFGC

Peak industry group for the Australian grocery sector, the Australian Food and Grocery Council (AFGC) has said that it is willing to work with stakeholders to help meet community expectations for country of origin labelling.

The industry group opposed changes to country-of-origin labelling before parliament last year, however, CEO Gary Dawson has now said that there could be an opportunity to re-work current terms such as “grown in and product of”, to increase community understanding without developing a new network of regulation, The Weekly Times reports.

He pointed to the recent example of SPC Ardmona’s resurgence as proof that government regulation of labelling was not necessary.

“Where (country of origin) is a driver of consumer preference, companies will incorporate it into their marketing and promotion. The most recent example of that was SPC,” Dawson told a parliamentary hearing into labelling laws.

“Regulatory changes were not required in that case. If it is not a driver of consumer preference and, therefore, not of great interest, then there is a question over how far you should go with regulation.”

On the other side of the coin, the Australian Made Campaign appeared before the House of Representatives Standing Committee on Agriculture and Industry in Canberra earlier this month to give evidence to into its country of origin food labelling inquiry.

The Australian Made campaign’s chief executive Ian Harrison, together with compliance and policy manager Lisa Crowe, made recommendations to the committee on how food labelling laws could be improved to support Australian growers and manufacturers. 

Harrison and Crowe stated that an effective country-of-origin labelling system that is both understood and trusted by consumers, will help combat companies that are “attempting to mislead consumers regarding their products’ true country-of-origin.”

“Today we again recommended that the regulations under Australian Consumer Law fall into line with the more stringent rules for using the Australian Made, Australian Grown logo, thereby eradicating some of the loopholes that currently exist,” Harrison said.

 

70 percent of bacon and ham sold in Australia is imported: Australian Pork

According to Australian Pork, 70 percent of bacon and ham products sold in Australian supermarkets is imported, and poor country-of-origin labelling makes it difficult for consumers to distinguish between local and imported products.

The industry body says that at present, labelling legislation allows the imported bacon and ham to be labelled as “Made in Australia” as long as the product has undergone a “substantial transformation,” The Weekly Times reports.

According to the ACCC website, The term “substantially transformed” means that the goods in question have been substantially transformed in a country as long as they undergo a fundamental change in that country in form, appearance or nature, so that the goods existing after the change are new and different goods from those existing before the change.

Andrew Spencer, chief executive of Australian Pork yesterday gave evidence at the House of Representatives Agriculture and Industry Committee public hearing, stating that the term “substantial transformation” needs to be reviewed if labelling is to become more in line with consumer expectations.

“The Australian Made Australian Grown Logo Code of Practice, for example doesn’t allow use of the “Australian Made” logo on imported bacon or ham due to consumer confusion over its meaning and we believe the regulated claims need to be similarly changed,” he said.

The Australian Made campaign also stood before the House of Representatives Standing Committee on Agriculture and Industry in Canberra last week, stating that an effective country-of-origin labelling system that is both understood and trusted by consumers, will help combat companies that are “attempting to mislead consumers regarding their products’ true country-of-origin.”

“…We again recommended that the regulations under Australian Consumer Law fall into line with the more stringent rules for using the Australian Made, Australian Grown logo, thereby eradicating some of the loopholes that currently exist,” said Australian Made chief executive Ian Harrison.

“Food products with high levels of imported content which undergo simple processing in Australia cannot use the green-and-gold Australian Made logo, and neither should they be able to claim that they were manufactured here under Australian Consumer Law.

 

Australian Made gives evidence at country-of-origin labelling inquiry

The Australian Made Campaign appeared before the House of Representatives Standing Committee on Agriculture and Industry in Canberra this morning to give evidence to into its country of origin food labelling inquiry.

The Australian Made campaign's chief executive Ian Harrison, together with compliance and policy manager Lisa Crowe, made recommendations to the committee on how food labelling laws could be improved to support Australian growers and manufacturers. 

Harrison and Crowe stated that an effective country-of-origin labelling system that is both understood and trusted by consumers, will help combat companies that are “attempting to mislead consumers regarding their products’ true country-of-origin.”

“Today we again recommended that the regulations under Australian Consumer Law fall into line with the more stringent rules for using the Australian Made, Australian Grown logo, thereby eradicating some of the loopholes that currently exist,” Harrison said.

“Food products with high levels of imported content which undergo simple processing in Australia cannot use the green-and-gold Australian Made logo, and neither should they be able to claim that they were manufactured here under Australian Consumer Law.

“Consistent food labelling laws would provide consumers with greater certainty in the choices they make at the checkout, and support growers and manufacturers of genuine Aussie products.”

A number of Australian food processors including SPC Ardmona, Simplot and McCain have sighted the steady influx of cheap imported products together with confusing country-of-origin labelling as key factors that have  affected their market share and profitability.

“We are thrilled that this inquiry is being conducted within the House of Representatives structure – the seat of Government – because there is great potential for positive changes to be made,” Mr Harrison said.

Further evidence by other interested parties will be heard in Sydney tomorrow.

 

China’s agricultural soil contaminated with toxic metals, AUSVEG

Peak industry body for potato and vegetable growers, AUSVEG is calling for further strengthening of Australia’s country of origin labelling laws after fresh reports have shown that almost 20 percent of China’s agricultural land is contaminated with heavy toxic metals, which can be carcinogenic and cause kidney damage.

Recent data released from the Communist Party of China has indicated that 19.4 percent, or around 1.05 million square kilometres of China’s agricultural land is contaminated with an array of toxic metals including cadmium, nickel and arsenic.

AUSVEG spokesperson, Hugh Gurney said that the findings are ‘mortifying’ especially considering that China is the second highest source of vegetable imports to Australia.

“In 2012-13, it was estimated that approximately $110 million worth of vegetables were imported to Australia from China, however, it’s highly likely that the amount of potentially harmful Chinese produce reaching Australian dinner plates is much higher than official figures suggest,” said Gurney.

“Under current trade agreements with China, New Zealand may import processed vegetables from China, repackage them as ‘Made in New Zealand from local and imported ingredients’, and ship the product to Australia for consumption.”

“…The risk associated with the consumption of Chinese produce is now indisputable. We should not allow inadequate Country of Origin Labelling requirements continue to put the health of Australian consumers at risk,” he said.

The House of Representatives Agriculture and Industry Committee recently announced that it will be conducting an inquiry into country-of-origin labelling for food. The inquiry has been referred by the Minister for Agriculture, Barnaby Joyce MP, and Minister for Industry, Ian Macfarlane MP.

The terms of reference for the inquiry:

  • Whether the current Country of Origin Labelling (CoOL for food) system provides enough information for Australian consumers to make informed purchasing decisions
  • Whether Australia's CoOL laws are being complied with and what, if any, are the practical limitations to compliance
  • Whether improvements could be made, including to simplify the current system and/or reduce the compliance burden
  • Whether Australia's CoOL laws are being circumvented by staging imports through third countries
  • The impact on Australia's international trade obligations of any proposed changes to Australia's CoOL laws.

Gurney says that AUSVEG has welcomed the inquiry, stating that it is paramount that Australian consumers are able to easily identify foreign produce.

“Australian growers follow the strictest environmental and on-farm protocols to produce some of the world’s safest vegetables. It would be shameful to continue to let ineffective Country of Origin Labelling legislation impede Australian consumers from making well-informed choices at the supermarket,” he said.

 

Renewed calls for country of origin labelling

Industry groups have called for better product labelling to highlight Australian-produced foods.

Roy Morgan research has indicated that consumers are “aware of the benefits of buying Aussie products, and of the impact that their purchasing behaviour has on jobs, local business and future opportunities,” the Herald Sun reports.

Apple and Pear Australia Limited industry services manager Anna Farrow said stronger labelling laws are necessary so that consumers can make informed decisions.

“The current ‘Made in Australia’ label can be a little confusing, if not outright misleading,” she said. “It can actually mean that all the ingredients are imported, and simply mixed or packaged in Australia.

“Worse, under current legislation ‘Made in Australia’ can be used in labelling processed fruit or juice if more than 50 percent of the value of the product is added in Australia, regardless of where the fruit comes from.”

Ritchies Supermarkets have rolled out Aussie-branded bays to highlight SPC Ardmona’s locally grown and made canned fruit and baked beans.

Coles and Woolworths said 96 percent of all fresh produce they sell is grown in Australia and Coles said its SmartBuy frozen vegetables and potato products are now 100 percent Australian grown.

Woolworths has teamed with SPC Ardmona to source Select brand tinned fruit and tomatoes. Its Select frozen vegetables will be 100 percent Australian-supplied by May.

Despite these efforts, $2 billion worth of foreign fruit, vegetables and nuts were imported last year.

The calls for clearer  country of origin labelling are amidst a push for labelling which helps consumers make healthier purchasing decisions. Last week, Monster Health Food Co became the first to introduce the Health Star Rating System, where processed foods are given a rating out of five stars based on their nutritional content. Products high in nutrition value receive more stars, while those foods lacking nutritional value have fewer stars.

Last week it was revealed that federal, state and territory governments committed $11 million to the Health Star Rating System before a cost benefit analysis was performed and despite being advised it didn’t comply with best practice guidelines.

 

Australian Made Campaign welcomes country-of-origin labelling inquiry

The House of Representatives Agriculture and Industry Committee has announced that it will be conducting an inquiry into country-of-origin labelling for food, a move that has been welcomed by the Australian Made Campaign.

Chief executive of the Australian Made Campaign, Ian Harrison said that the inquiry was ‘very important’ for the Australian food manufacturing sector, and that he was ‘thrilled’ that it will be conducted within the House of Representatives structure.

“The Australian Made Campaign has submitted comment to and appeared before a number of Senate Committees on country-of-origin labelling in recent years and certainly will again with this inquiry,” said Harrison.

“Our intention is that the food labelling requirements under Australian Consumer Law will fall into line with the more stringent rules for using the Australian Made, Australian Grown logo. This would be well received by consumers because of the recognition and trust the logo enjoys.”

A number of Australian manufacturers including SPC Ardmona, have been significantly impacted by ambiguous country of origin labelling legislation, resulting in decreased market share and profitability.

“The Australian Made Campaign does not support the use of qualified claims such as ‘Made in Australia from imported and local ingredients’ unless the product meets the full ‘made in’ test, and has previously proposed that regulations be introduced to make it harder for food products which have a high imported component to pass the ‘substantial transformation’ test,” said Harrison.

“Clarifying the concept of ‘substantial transformation’ and specifying processes which, by themselves, do not satisfy this test, would close some of the existing loopholes surrounding the use of the words ‘Australian Made’ for food products.”

 

Greens push for stronger country of origin labelling laws

On the back of a surge in consumer support for Australian-grown food, Greens senator Christine Milne has approached federal government, industry, farmers and fellow MPs to push proposed reforms in country of origin labelling.

Milne is calling for more transparency in country of origin labelling as she says that current regulation is misleading.

The proposed changes for Country of Origin labelling are as follows:

  • ‘Product of’ or ‘Grown in’ – will be used to describe food that has been wholly grown and processed in a country. 
  • ‘Manufactured in’ – will replace ‘Made in’ for food that has been substantially transformed in a particular country. The term ‘made in’ will no longer be used as many people think that ‘made in’ refers to where the ingredients were grown. 
  • ‘Packaged in’ – will be used on food that has been highly processed but can’t claim to have either ingredients of significant processing in a particular country. Companies can still choose to highlight the source of significant ingredients if they wish. 

In addition to the county of origin labelling changes, Milne is also proposing to introduce regulation that stipulates what kinds of food processing does not qualify as manufacturing, as manufacturing typically involves significant investment in local equipment and jobs.  

Fruit and vegetable processor SPC Ardmona recently experienced a spate of consumer support on the back of a social media movement that was started by Newcastle resident, Linda Drummond.

The processor claims to have suffered significantly from confusing regulation surrounding country of origin claims coupled with an increase in cheap imported produce.

 

Will community support seal the deal on SPC’s future?

It was only a few weeks ago that the future of Australia’s last remaining fruit and vegetable processor, SPC Ardmona, was in doubt.

A steady influx of cheap imported tomatoes, a consistently strong Australian dollar and confusing regulation surrounding country of origin claims have all impacted on the processor, which warned it may have to cease trading in Australia.

SPCA reached out for government assistance to meet rising costs, a request that was initially met with a $25m pledge from Labor, but was later rejected by the Abbott government.

The processor also appealed to the Anti-Dumping Commission to have tariffs imposed on tomatoes imported from Italy on the basis that the cheap imports were causing material injury to local producers. The Anti-Dumping Commissioner ruled in favour of SPCA, and imposed a tariff of around nine precent on 14 Italian processed tomato brands.

The imposition of tariffs and increased consumer awareness of SPCA’s plight led to a steady increase in sales, but not enough to secure its future.

It wasn’t until late one Thursday night in early February that SPCA’s future would really take a turn for the better.

Newcastle resident and loyal SPCA customer, Linda Drummond pioneered a movement on Twitter that encouraged Australians to purchase SPC products over the weekend. She created the hashtag #SPCSunday which soon spread to various forms of social media including Instagram and Facebook.  

Within less than 24 hours, the hashtag had been used in over 1,000 tweets and reached the likes of Australian celebrities including Magda Szubanski, Father Bob and Adam Spencer who were all eager to support the cause.

By the time Sunday rolled around, the hashtag was tweeted over 7,000 times and sales of SPCA products soared..

Food magazine recently spoke with Bronwyn Powell, the marketing and innovation director for SPC Ardmona about the #SPCSunday campaign and the impact that it has had on the business.

Powell said that sales in the lead up to #SPCSunday were already increasing, but since the campaign, more consumers have been reached than they could have possibly hoped for.

“In our key line and our key retailers we have increased sales by over 50 percent, which was actually happening even before #SPCSunday. We have had such great support from consumers, retailers and everyday Aussies, and now even more so,” she said.

“We are just overwhelmed with the everyday Australian supporter for our company really. So it’s amazing, it’s really been fantastic.”

When asked whether SPCA would consider integrating #SPCSunday into the company’s marketing activities, Powell said it is something that the company would ‘definitely’ consider.

“We are definitely looking at how we can continue to support and grow this idea whether it is instore or online with consumers. It’s only early days but trust me, my team are crazily thinking, about how we can help grow and support #SPCSundays and really connect with our consumers and the community.”

Since #SPCSunday, both Coca-Cola Amatil (SPCA’s owner) and the Victorian state government announced a new $100 million investment plan to assist the processor over a three year period. The cash injection will no doubt provide much needed assistance to the brand, however for the company to continue to prosper now and into the future, ongoing consumer support is vital.

Food magazine asked Powell what she believed Australia would lose if SPC was to close.

“There are a lot of things that we are going lose if we lose SPC. The first one that I have to say as the marketing director is great brands that have been around for nearly 100 years – Many of them people have grown up with. Household names like Ardmona, IXL jam, Goulburn Valley and Taylors more recently which is a newer brand, those brands will be lost and lost from a lot of our Australian childhood memories.

“And because we are an agricultural based company with Australian grown fruit and vegetables – we are going to actually lose a lot of Australian growers. And the sad thing for me, the thing that probably brought me the most emotion in this job was that we would be losing 100 year old pear trees that have gone through three generations of families.

“The other thing is that consumers are going to lose the reassurance that they are buying Australian, and when they are buying Aussie grown, and our products, I can assure you that they are clean, green and wholesome. We give consumers comfort that their food is premium quality and safe – that is critically important and something that we know and we can demonstrate.”

Powell says that differing standards in food safety is another concern that the Australian public will face should SPC close and shelf space be replaced with imported products. The call for stronger country of origin labelling and more rigorous testing of imported fruit was heightened last year after high levels of lead were detected in Chinese canned peaches. Tests on the fruit showed alarming high levels of lead – up to twice the amount that is legally permissible under the Australian and New Zealand food standard.

“One of the things I always say is actually look at where products come from… Have a look in the fine print and actually see where that product was really made and then ask yourself, do you really know what goes on in terms of the conditions that the product was made in? Do we really know if they have the same strict laws that we have in Australia around food safety?”

Powell explains that innovation within the Australian fruit sector is also something that the nation stands to lose.

“We would lose all of the future innovation that myself and my team have been working on. Just one of those is Goulburn Valley Perfect Fruit [soft serve fruit] which is currently in test market. We have loads of other ideas too that won’t be there if we go, as there is nobody else that really operates in fruit to offer that innovation in Australia. Fruit is at the core of what we do.”

Although SPCA has been enjoying a spate of increased support from consumers and retailers in recent months, ongoing sales is what’s required to  to keep the company alive.

In mid February, parent company Coca-Cola Amatil posted a $400m slump in net profit, related to write-downs from SPCA. In order for the company to truly come back into prosperity, constant consumer support is paramount, and also achievable.

Spring Gully, a South Australian sauce and pickle manufacturer was in a similar predicament, albeit on a smaller scale, in mid-2013. The company entered voluntary administration with debts of $4.9 million in July, but showed stronger signs of life months later as a result of community and retail support. 

Fellow South Australian food brand, Robern Menz launched the “Shop and Swap” campaign which encouraged consumers to swap one supermarket food item with its South Australian produced counterpart.

Not long after Shop and Swap was launched, three weeks' worth of Spring Gully sales took place over a three day period with Foodland, IGA and Coles placing extra orders to make up for the increase in sales. In November, the company announced that it had cleared $1 million in debt.

The question is can SPCA follow a similar path and pave a road to recovery through increased consumer support? Powell thinks that they are most certainly on the right track.

“The support is certainly helping us, it is certainly saying to everyone that this is a company with brands and products that Australians want to keep alive.

“SPC is overwhelmed with the support, and we want to thank each and every Australian who has supported us – retailers and the consumers.”

 

Federal government to ramp up anti-dumping measures

Industry minister Ian Macfarlane has announced that the federal government plans to increase penalties against processors of illegally dumped imported tomatoes, as well as introduce legislation that will reverse the onus of proof on foreign suppliers.

According to Macfarlane, tomato importers that have illegally dumped product earlier this month are also likely to be penalised, The Weekly Times Now reports.

However trade advocates together with the labor government have stated that the reversing of the onus of proof could be in breach of World Trade Organisation rules.

Liberal MP Sharman Stone, who has been very public about her support for struggling food processor SPC Ardmona, says that ‘urgent’ action needs to be taken. She also dismissed concerns regarding potential retaliation from trade partners.

“Let’s test it and see. If we are the poor little pathetic scared people who always worry that someone might say ‘Just a minute’, then let’s forget our anti-dumping regime and continue as before,” said Stone.

SPCA recently secured $22m from the Victorian state government, and $78m from parent company Coca-Cola Amatil as part of a restructure plan over the next three years.

CCA announced this week that it had taken in excess of a $400m hit to profits due to write-downs related to SPC Ardmona. CCA says that the write-downs are a result of dumped imported product and the high Australian dollar.

 

New Zealand PM says that Buy Australian push could breach CER

New Zealand Prime Minister, John Key will be meeting with Tony Abbott this week to discuss concerns that the “Buy Australian” supermarket campaign is forcing New Zealand products off shelves.

Australian supermarket giants, Coles and Woolworths, both signed deals with troubled frozen vegetable processor, Simplot in September last year, committing both retailers to purchasing 100 percent Australian grown for their private label lines by 2014. A move which saw the retailers replace imported product from several countries including China and New Zealand with locally grown.

Key, who arrived in Sydney yesterday said that he is investigating whether the campaign is illegal under the Closer Economic Relations agreement – one of the most comprehensive bilateral free trade agreements in existence.

“It is undetermined yet whether it is a breach of CER,” Key told SBS News. “But even if it’s legally not, it’s arguably in my view, a breach of the spirit of CER.”

Ian Harrison, Chief Executive of the Australian Made Campaign doubts that the retailers' push to source more Australian produce over imported is in breach of CER, stating that the decision to source locally was that of the supermarkets, not government.

“The reality is that the retailers are not part of government, they make decisions on what they stock and what they make available to their customers,” Harrision told SBS News.

“I think New Zealand manufacturers that have lost their place on the shelf would be no different to a lot more Australian manufacturers that have probably lost their place on the shelf as a part of the restructuring of the retail profiling that a major retailers have done.”

Australia’s food manufacturing sector has been suffering over the past number of years as an influx of cheap imported products have filled supermarket shelves, resulting in the near closure of fruit and vegetable processors, Simplot and  SPC Ardmona.

Simplot’s Bathurst plant in NSW as well as its Devonport plant in Tasmania were both under threat of closure due to an intensely competitive industry and unsustainably high costs. Simplot’s new contracts with the reatilers are reported to have potentially saved up to 200 local jobs.

 

Current regulation has set up local industry to fail, Xenophon

Independent senator, Nick Xenophon has said that poor testing and weak anti-dumping measures for cheap imported food products is a key reason as to why the Australian industry is in trouble.

Xenophon’s comments have come just after Chinese cabinet minister, Wang Shiyuan revealed that more than three million hectares of farmland was “too polluted” go grow food. A figure that some scientists believe is closer to 24.3 million hectares, the Weekly Times Now reports.

Weak environmental laws coupled with an increase in Chinese agricultural production has left parts of the countryside significantly damaged by the overuse of chemicals, resulting in high levels of lead, cadmium, pesticides and various other toxins.

While some areas are now prohibited for Chinese farmers to grow crops intended for human consumption, tainted foods are still getting through the cracks with recent tests indicating that some Chinese canned peaches intended for sale in Australia contained twice the acceptable amount of lead.

"The Government needs to understand that free trade shouldn't be 'free for all' trade," said Xenophon.

Xenophon also said that current regulation has “set up the local industry to fail,” and that the country would face an influx of cheap imported produce should troubled cannery, SPC Ardmona close.

WA today also reports that Xenophon intends to push for a senate inquiry into the food processing industry with a focus on anti-dumping mechanisms.

 

Anti-Dumping Commission lowers tinned tomato tariff

The Anti-Dumping Commission has reduced the tariffs placed on prepared and preserved tomatoes exported from Italy.

In July last year, the Anti-Dumping Commissioner initiated an investigation into the alleged dumping of cheap imported tomatoes from Italy following a request from troubled fruit and vegetable processor, SPC Ardmona.

The commission ruled in favour of SPC on November 15 last year, enforcing a nine percent tariff on imported tinned tomatoes on the grounds that imported goods had caused material injury to local producers.

The new tariff however has now been reduced to 5.06 percent, with a 26.35 percent tariff applying to “Uncooperative exporters”.

The new tariff of 5.06 percent will be applicable from February 4.

The reduction in tariffs comes just days after the liberal government announced that it will not be providing assistance to SPC Ardmona, who requested $25m as part of a restructure package to keep the company afloat.  

The Victorian opposition leader, Daniel Andrews has since pledged $30m to the struggling fruit processor should it be successful in the next election.

 

Navy bean producers fear industry ruin should SPC close

Australian Navy Bean producers, including some that have been supplying SPC since World War II are fearing a possible end to the industry following Tony Abbott’s decision to refuse funding  to the troubled fruit and vegetable processor, SPCA.

SPC Ardmona had been promised $25 million in funding by the labor government following fears that the cannery would close without government assistance. However, Abbott’s announcement last week confirmed speculation that the Liberal government would not be honouring labour’s pledge.

"The reality is that the navy bean industry would close … would finish," Bean Growers Australia managing director Lloyd Neilsen told ABC News.

SPC launched its 100 percent Australian grown baked beans product in July last year creating contracts for navy bean farmers in Kingaroy and Atherton in Queensland, and the Riverina district in NSW.

The launch marked the first time that an Australian brand had committed to sourcing 100 percent Australian grown inputs for a baked bean product – a decision that was welcomed by local suppliers that had been affected by the influx of cheap foreign imports.

SPC Ardmona’s Shepparton plant is the only baked bean cannery in Australia and processes almost of all of the nation’s locally grown navy beans.