Nestlé Indian factory expansion to create 250 jobs

International food giant Nestlé is making some changes to its businesses in India and the US.

The capacity of its Goa factory in Indonesia will be expanded as part of a three-year US$125 million investment plan in the key emerging market.

Switzerland-based Nestlé said the factory improvements will create 25o jobs.

 “We have been in India for 100 years and have factories in eight locations across the country,” Jean-Marc Duvoisin, global head of human resources at Nestlé said.

 “India is important for us and we have deep roots here."

In the US, Paul Grimwood, Chief executive of Nestlé UK & Ireland, has been appointed to the role of Chairman & CEO of Nestlé USA.

The appointment comes after the current chairman and chief executive Brad Alford, announced plans to retire in October this year after 32 years with the company and seven as chairman and chief executive.

Grimwood has been in his current role for over three years and prior to that, was the head of the  Nestlé UK Confectionery business for three years.

Supreme Court expected to enforce end to Coles Warehouse strike

Despite predictions that striking workers at the Coles factory in Melbourne will lose their legal battle today, they have pledged to continue their industrial action.

After the 600 striking workers at the Sommerton factory won the right from Fair Work Australia to continue picketing on Friday, management of the warehouse then applied on Saturday for an emergency injunction to end the strike.

Toll Group lawyer Stuart Wood said the 600 striking workers need to be stopped to allow the 150 workers who want to go back to work, to do so.

'There are real-life individuals whose livelihoods are being impacted by the picket,' he told the court.

'It is having a deleterious impact on employees who wish to cross the picket and work at the Somerton site.'

The Toll Group have told the Victorian Supreme Court that stopping the strike by National Union of Workers (NUW) members is urgent because they have blocked trucks from entering or exiting the Somerton warehouse since Tuesday.

The matter was adjourned until today when union lawyers failed to appear in court.

They were not present because they had not been properly served with legal documents, which Wood said was a deliberate action intended to create significant tactical advantage by extending the blockade until today.

NUW state secretary Tim Kennedy told reporters at the picket line yesterday, that he is expecting the Supreme Court rule in favour of Toll’s application.

He said workers will continue to strike regardless.

The workers are calling for better pay and conditions.

Coles warehouse strike to impact supply

As a strike at a Coles warehouse enters its second day, experts have warned the impact will take less than a week to impact supply to supermarkets.

About 600 workers are striking at the Somerton warehouse in Melbourne’s north, calling for improvements to working conditions including shift lengths and the accumulating rostered days off (RDO’s).

The workers say their working conditions are worse than those at all other Coles warehouses.

Victorian supermarkets will start to see a decrease in the availability of products including toilet paper, beer and toothpaste.

"I think you will see an impact at about the six-day mark, there could be empty shelves," National Union of Workers state secretary Tim Kennedy told the Herald Sun 

"If they do run out of beer then they will probably start talking to us."

Imported beer brands including Heinekin, Corona and Becks could be affected, he said.

Coles, which has stood down hundreds of workers at the distribution centre, argues that the action is unlawful, and has lodged an application with Fair Work Australia this morning, The Age reports.

The supply impact of the strike will spread, Coles predicts in its application.

"The company believes that industrial action will spread to all three sites," Coles said in the application.

Coles has apparently spent millions of dollars on trying to lessen the impact of the strike by sending products to other warehouses, but workers at the Somerton warehouse say they are determined to continue the action until they get a response.

"Most consumers will not take the risk to go to a Coles supermarket now in the belief that things may not be there," Kennedy told reporters at the warehouse.

"They'll probably go to the competition, so it will have a significant effect on sales for Coles."

Workers began their strike outside the plant at 6am Tuesday and braved the rain and freezing conditions last night to continue their fight.

The union said it was set to speak with Toll management which manages workforce issues at the site later on Tuesday.

Christopher Whitefield , spokesman for Toll Management, which manages workforce issues at the site, said the company had offered a four per cent pay rise, which is higher than similar work sites.

"In order to keep attracting and retaining the best people, Toll will continue to balance the needs of the business to remain competitive within the industry," Whitefield said in a statement.

What do you think of the workers' strike? Is impacting the supply to stores the only way to get the attention they need?

Robatech, Fallsdell, Proseal & Result Packaging head to AUSPACK PLUS 2013

Robatech, Fallsdell, Proseal Australia and Result Packaging are just some of the companies who will be heading to Sydney for AUSPACK PLUS 2013 and between them they will be showcasing new hot and cold glue technology, MAP in-line tray sealers and new ink jet technology.

Robatech announced that they will be displaying their advanced hot and cold glue technology on their stand during AUSPACK PLUS.

Milton Krowitz, National Sales Manager, Robatech, said that with the trend towards personalised print products, printers are finding production runs to be smaller than they have been in the past.

“Greater flexibility is therefore required in order to cost effectively manufacture these smaller runs of print products which are then packaged into folding boxes. Robatech innovative glue application system Corrutack-2 offers an ideal solution to meet this trend: It provides exceptional gluing flexibility for folding boxes as it can be easily readjusted for different types and lengths of production runs.” Krowitz said.

Error-free production with Corrutack-2

Corrutack-2 is a new system for the gluing of flaps of corrugated board and is suitable for flexo-folder gluer machines. Fixed gluing stations often impair a rapid change from top to bottom gluing, or board cut-outs block the run through the station. Corrutack-2 offers an ideal solution in such cases: The adhesive application and the glue verification take place contact-free, and the system is so flexible that it can switch very quickly from top to bottom gluing.

User-friendly gluing of liquid adhesives

CartoGlue LP, the mobile low-pressure cold glue system, enables flexible and fast utilisation on postal envelope machines, folding machines and flexo-folder gluer machines. The cold glue trolley feeds dispersion adhesive and uses up to four heads to apply it to print products and converting materials. The optional 7" touchscreen of the pattern control enables the user-friendly creation of application patterns.

According to Scott Templeton, General Manager of Proseal Australia, this will be their third consecutive AUSPACK PLUS, which is an indication of the success of the exhibition.

“Proseal Australia is very pleased to be exhibiting at AUSPACK PLUS 2013 as we see the show as a great way to showcase our machinery range and an excellent opportunity to meet new contacts and catch up with existing clients,” Templeton said.

“In 2013 Proseal will be showcasing our latest range of full vacuum MAP in-line tray sealers. The MAP in-line tray sealers are designed and built specifically for use in high-demand food production environments and the high-speed vacuum MAP machines will provide an excellent solution for many applications.” he said.      

Darren Cameron, Sales Consultant, Fallsdell Machinery, said that like other exhibitors the company is also looking forward to exhibiting at the 2013 AUSPACK PLUS.

“Fallsdell will once again be exhibiting a great range of our New Equipment as well as Equipment from our long list of Worldwide Agencies. AUSPACK PLUS is a great opportunity for us to showcase, under one roof, our full range and services to our customers and potential clients.”  Cameron said.

Michael Dossor, National Sales & Marketing Manager, Result Packaging added that they look forward to every AUSPACK PLUS as it is a major industry event.

“AUSPACK PLUS allows Result Packaging the opportunity to build our brand by showcasing our entire equipment range, and to develop new customer relationships opening the doors to more business,” Dossor said. 

“Result Packaging will be showcasing the new Leibinger’s JET3 and JET2neo which are state-of-the-art technology that will revolutionise ink jet printing," he said.

AUSPACK PLUS 2013 is a ‘must-attend’ exhibition on the Australian Packaging and Processing calendar and will be held at the Sydney Showgrounds, Sydney Olympic Park from the 7th to the 10th of May 2013.

AUSPACK PLUS is owned and presented by the Australian Packaging and Processing Machinery Association (APPMA), Australia’s only national packaging and processing machinery organisation.

To receive a prospectus on exhibiting at AUSPACK PLUS 2013, contact Luke Kasprzak, Event Manager, on PH: 02 9556 7972 or email LKasprzak@etf.com.au

 

Industrial action cancelled at QLD meatworks

The planned industrial action that was set to close Ipswich’s largest meatworks has been cancelled at the last minute.

Workers at JBS Rockhampton abattoir announced plans to walk off the job for four hours today, as they call for a four per cent rise to be included in their bargaining agreement.

The employer responded by declaring the work stoppages would mean the meatworks would have to be closed all day, and workers participating in the strike would not be paid for the day.

Union members voted in favour of the four hour stoppage, which is not the first time workers have walked off the job over the dispute.

But late yesterday, all workers voted not to support the planned industrial action, overriding the union’s plans.

According to Australian Meat Industry Employees Union industrial officer, Lee Norris, further meetings will be held to discuss the issues.

Workers, union members and the employers say they will continue to negotiate in good faith.

 

Injured meat worker wants $500 000

A Rockhampton meatworker injured when three knives plunged into his body is seeking more than $750 000 in damages.

Steven Charles Larson was working as a slaughterman at the JBS Nerimbera abattoir in 2009 when the freak accident occurred, leaving him with stabs to his neck, collarbone and hand.

The now 41-year-old wounds resulted in permanent damage and pain to his neck and left hand, and has also ruined his career possibilities, the court has heard.

Documents lodged with the Supreme Court in Rockhampton stated that at 5:45am on 14 July 2009, the Mount Morgan man was preparing for his shift by sharpening his knives in the "kill floor" anteroom.

The room was located directly below a set of stairs leading to the floor, and when a colleague was walking up the stairs, she dropped her knife kit.

Three knives fell and speared Larson, according to the claim.

Larson is suing for the loss of his weekly pay packet of $800 for the past three years and then for the next 25 years.

The total compensation will total over $500 000.

Larson is also seeking compensation for his medical expenses, both past and continuing, for the injuries sustained in the accident.

Larson has "endured and continues to endure pain, suffering and diminution of the enjoyment of the amenities of life,” according to the statements, which also say the company is "vicariously liable" for the actions of Larson's colleague.

They argue that JBS failed to provide a safe workplace by ensuring proper barricades would stop falling knives hitting employees.

It’s not been an enjoyable time of late for JBS, with news yesterday that it would be closing the Dinmore meatworks on Friday in response to workers walking off the job.

The move comes after a number of work stoppages, as workers fight for a four per cent annual pay rise to be included in a new enterprise bargaining agreement.

Management at JBS Australia’s Dinmore meatworks said the decision by workers to walk off the job for four hours on Friday will mean the entire plant will have to be closed all day.

Goodman Fielder slashes jobs to address rising costs

 

More than 500 Goodman Fielder employees across Australia will be out of work as the company restructures the business to reduce costs.

'It is expected that 115 roles will be removed from the baking division as a result of the consolidation of the three bakery facilities,' Goodman Fielder said in a statement.

'This brings the total number of roles removed across the company to 541 this financial year.'

More than 30 redundancies will impact those employed in central and far north Queensland.

The job losses are the result of difficult trading conditions, according to spokesperson Martin Cole.

Goodman Fielder’s Rockhampton bakery will be close in July, with the one located in Cairns to follow early next year.

"In total it's around 35 positions will be made redundant across those two facilities but we will be expanding the Townsville facility, we'll be offering redeployment opportunities where that's available to our employees," Cole said.

"It's really in response to what are continued difficult trading conditions and we need to make sure we can improve our manufacturing efficiency and that's why we've made this decision."

Goodman Fielder said on Monday that its Townsville bakery would be upgraded to service customers in the north Queensland region.

The bakery at Whiteside in Melbourne would be closed in 2013.

Goodman Fielder is also simplifying its bakery range to improve efficiency, on-shelf availability and already will reduce the current range of 450 products to about 350.

Late last year, Goodman Fielder was considering abolishing daily bread deliveries to save money, blaming the supermarket price wars.

Transportation of the food products accounts for 40 per cent of the company’s spending, but a spokesperson told Food Magazine that it decided not to proceed with the change.

“That was something that was said as an off-the-cuff remark made in a briefing, and it’s certainly not something we’ve progressed with and we do not have any plans to, moving forward,” the spokesperson said.

“It was something we were investigating, but will not be implementing at this stage.

The spokesperson explained that the move was, at that time, not necessary or appropriate for the Australian market.

“Of course we keep abreast of developments in other countries and look at whether they are things we should consider, but this is one we will not be moving on at the moment.”

Then in February the world’s largest palm oil trader bought a 10 per cent stake in the company.

Singapore-based Wilmar International bought the stake for $115 million, and may buy more.

“Wilmar is currently assessing whether to increase its shareholding,” the company said in a statement.

Coles and Woollies wiping out regional grocers: lobby group

The Senate Inquiry into Coles and Woolworths’ anti-competitive behaviour is not impacting their mission to take over the grocery sector entirely, and the independents are desperately calling on the federal government to step in.

The independents are banding together to create a lobby campaign group over plans for the big two to increase floor space by over 5 per cent in the next few years.

Coles and Woolworths have undertaken research and development over the last few years which has seen them close dozens of stores and reopen them in other areas.

These areas, the independents say, are usually where they are located.

A local IGA or smaller grocer is then pushed out of business as they find it impossible to compete with the ridiculously low prices the major supermarkets can achieve through their anti-competitive and bullying behaviour.

The Senate Inquiry into the actions of Coles and Woolworths is struggling to get people who will comment on the behaviour of the big two, while factories continue to close and more private label products spring up on shelves.

Last week, Steven Strachan, the outgoing chief executive of the Australian Winemakers Federation, who would only speak once he had left the position, for fear of the consequences if he spoke out earlier, said the major supermarkets are bullying the winemakers too.

''If you're an individual company that speaks out against them or says anything publicly that criticises their tactics, they would have no hesitation in giving you a holiday from their shelves and that is what's creating a culture of fear and compliance in the industry,'' Strachan said

''Whenever I've made comments in the press, I could only talk about retailers in a generic sense, but they [Coles and Woolworths] would religiously follow up on those comments and make it known they were displeased.

The pressure placed on food producers is well-known to everyone in the industry – Food Magazine has spoken to countless manufacturers about the pressures placed on them by Coles and Woolworths, but none will speak on the record – and they have even been accused of contributing to road deaths with unrealistic delivery demands.

A Commonwealth Bank assessment of Woolworths' $1-billion-a-year growth plan, which will see it swoop into more regional centres, including West Dubbo, Ulladulla and Morriset, found the huge supermarkets being developed are too big for the areas.

''Many of the Woolworths developments have been in areas with marginal medium-term economics for supermarkets,'' the Commonwealth Bank analysis said.

''We are concerned that in addition to the poor lending conditions, Woolworths is not helping itself by developing marginal sites.''

The report questioned Woolworths’ ''exceptionally high'' forecast floorspace growth of 3 per cent a year.

Master Grocers Australia, which lobbies on behalf of independents IGA and Foodworks, will use the bank assessment to support its claim that the big two are opening bigger stores than necessary to wipe out the competition.

''Master Grocers Australia believes the strategy is conscious, deliberate and intended to bring about a substantial lessening of competition in those local markets where over-large stores are developed,'' a draft report said, according to The Age.

Master Grocers will use the findings to lobby the federal government and Australian Consumer and Competition Commission (ACCC), calling for more action to stop the inundation of Coles and Woolworths’ around the country.

It wants MPs and the ACCC to use their powers to probably investigate and assess the profitability of such stores, push for mandatory competition and net community benefit tests in planning stages prior to approval and also legislate that prior notice of proposed property acquisitions by the major chains must be provided.

Coles spokesman Jon Church told The Sydney Morning Herald the claims are ''nice conspiracy theory with no basis in fact''.

''We only open stores where there is a consumer need and we believe we can make a return on our investment,'' he said.

And it’s not just the grocery market the big two are wiping out, they also plan to bring the liquor, hardware, office supplies and gaming, arms of their businesses to “marginal” areas.  

''The effect is the elimination of competition in these local markets,'' the report said.

Master Grocers has identified a number of stores which it says are “oversized,” including a 2383 metre square Woolworths store and liquor outlet in Bright, which has a population of 2100.

There is also a proposed 3100 metre square Woolworths store in Seville, where the population is 1800 and a 2600 square metre store which has opened in Koo Wee Rup, where there is only 2803 people living.

Woolworths spokeswoman Clare Buchanan told The Sydney Morning Herald that the company's competitors would not know the potential profitability of individual stores, but she did admit the company looks to open new stores in growth areas

''Developers look to incorporate amenities such as supermarkets in order to attract people to live in an area,” she said.

“This means we commit to a long-term investment in the future growth potential of a suburb.''

Here at Food Magazine, we've been asking whether we need a Royal Commission into the behaviour of the major supermarkets. Do you think it's come to that?

Pizzas not selling, we’ll make potatoes instead: McCain UK factory to slash 40 jobs

McCain Foods will stop producing frozen pizzas in the UK, amid disappointing sales.

About 40 jobs are under threat at the Scarborough factory, which will move away from baking and topping pizzas in favour of producing backed potatoes.

The statement released by the company confirmed that declining pizza sales are the reason behind the move, and that the surge in demand for its Ready Baked jacket potatoes, which are sold frozen in boxes of four, would offer a better return.

While the cost of converting the prepared food facility currently used to produce the pizzas will be significant, the company believes it will be money well spent, as sales are expected to continue increasing.

“The scale of the work required means decommissioning the current unit and extensive installation of new equipment,” McCain managing director Alan Bridges said.

“As a result, we have met employers and made preparations for a period of consultation because, regrettably, up to 40 jobs may be at risk of redundancy.

“The exact number will become clearer once the consultation takes place and all options for sustainable alternative employment have been fully explored.”

Image: The Scarborough News

Coca-Cola’s 6-step plan to be the leading Aussie beer brewer

Coca-Cola Amatil has confirmed plans to re-enter the Australian brewing industry by 2014, despite earlier disputing such rumours.

The company confirmed in documents lodged to the Australian Securities Exchange yesterday that it will embark on a six-step plan to position itself ahead of foreign brewers SABMiller and Kirin in the Australian brewing market.

In its statement, Coca-Cola Amatil predicted that could be pre-tax earnings of $1.2 billion per year in the Australia and Pacific region along.

Once premium beers came into the mix, the company said it would be looking at another $200 million oer year.

The plan will revolve around developing strategic partnerships and export programs for its Fiji-based beer brands.

Last year Coca-Cola Amatil sold its share in brewing business SABMiller, and at the time denied it had any interest in the alcohol market.

When SABMiller put Foster’s Australian spirits and ready-to-drink (RTD) business up for sale in March this year, in a similar move to it’s Fijian sale, Coca-Cola decided not to buy it, but said discussions were continuing.

Then in March, the beverage giant has announced plans to buy an 89.6 per cent stake in Foster’s Fijian business, which is held in Foster’s Group Pacific Group.

The stake cost Coca-Cola Amatil $58 million, and it said at the time it had plans to then buy the remaining 10.4 per cent of the group.

The latest plan announced by Coca-Cola Amatil will see the beverage giant entering the New Zealand market through those international partnerships.

It says it has the reputation, sales force, distribution, equipment and IT to offer a new way for foreign brewers to get their beer sold in the Australian market.

 It is expected that Coca-Cola Amatil will push for local distribution rights to a number of international beers continuing to grow in popularity in Australia, including Corona, Beck's and Heineken.

 

 

As supermarket power rises, Heinz praises progress

One of the few companies to be openly critical of the supermarket duopoly in Australia, HJ Heinz, has apparently mended fences with Coles and Woolworths.

Amid a climate of fear and bullying behaviour by the major supermarkets, where even a Senate Inquiry is struggling to get companies to speak up, HJ Heinz’ head of Asia-Pacific, Christopher J Warmoth has discussed the improved relationships.

''In the past eight months, we've seen a stabilisation of this business and that comes down to three elements," he said.

“First, we've improved our relationship with the retailers and they have told us that they have noticed our increased ability to bring them real value,'' he said.

These positive comments come after the company’s chief financial officer and executive vice president, Arthur Winkleback told US analysts in August last year that the demise of many Australian companies can be attributed to the supermarket war and said they have created an “inhospitable environment” for manufacturers.

Then in November its executive chairman, chief executive and president, William Johnston, told investors the company has had to overhaul its business strategy in Australia to deal with the supermarket dominance of Coles and Woolworths.

The comments came amid an announcement by Heinz that it would be closing three manufacturing facilities in Australia meaning more than 300 local jobs would go.

But the food giant has since tried to distance itself from those statements, which earlier this year a spokesperson told Food Magazine had been taken out of context.

The Australian food manufacturing sector is struggling to survive the supermarket price wars, which are driving profits up, pushing products off shelves in favour of supermarkets’ private label alternatives and, according to the Transport Workers Union, killing people on the roads.

One in every four grocery items now sold in Australian supermarkets is private label and of those, about one in two is imported.

Staying on the good sides of Coles and Woolworths is a good business plan in itself, as failure to do so can spell the end of a business.

Countless producers and manufactures have shared their struggles with Food Magazine, but refuse to go on the record with their stories for fear that being critical of the major supermarkets would be suicide.

Australia is one of Heinz’s biggest markets, bringing in an estimated $1 billion last year.

In contrast to the comments made and financial hardship experienced by Heinz last year, Warmoth now says the company is doing well.

''Australia has also reduced cost on every front,” he said.

“We have five factories, we closed one and have downsized three.

“We had a record year by far on the supply chain productivity.

''Now we are not where we want to be in Australia, but we've made significant progress and we enter [next financial year] with a much stronger foundation.''

What do you make of the latest comments from Heinz? Do you think they’re sincere?

Arrests made over bombings of PepsiCo subsidiary

A drug cartel lieutenant and several other alleged gang members have been arrested over a series of firebomb attacks on a Mexican snack company owned by PepsiCo.

Dozens of Sabritas delivery trucks were burned and buildings damaged at five distribution centers in Michoacan and the neighboring state of Guanajuato.

Mexican police are providing heightened security for the PepsiCo subsidiary, with about a hundred state and federal police standing guard at distribution centres, according to Julio Hernandez, a spokesman for western Michoacan state.

He said the attacks will further impact investment in the state.

“There will be effects on investment,” Hernandez said.

“In fact, private investment, both foreign and domestic, has been stalled in recent years.

“There hasn’t been any.”

It’s believed the attacks could be linked to the company’s refusal to hand over protection money to the gangs, who have terrorised locals and businesses throughout the drug war which has gone on more than five years.

The bombings are believed to be the first time a multinational company has been targeted by drug gangs in Mexico.

Guanajuato state attorney general Carlos Zamarripa four alleged members of the Knights Templar cartel in connection with the attacks.

Vice president of Sabritas-PepsiCo, Francisco Merino, told local media earlier this week that company officials were not aware of any demands for protection payments, which drug gangs frequently use to control areas and bring in extra income for illegal activities.

Prosecutors say the four men arrested have carried out murders, kidnappings, drug sales, extortion and loan sharking, along with demanding payments from street vendors and vendors of pirated goods.

Image: The Daily Mail

Where does the food sold in Australian supermarkets really come from?

One in every four grocery items now sold in Australian supermarkets is private label and of those, about one in two is imported.

The Age has conducted an investigation into the state of the supermarket sector, and the results would not surprise anyone in the Australian food manufacturing sector.

It found the rate of imported food products is increasing at a rapid pace, as the only way for the companies to provide their ridiculously low prices is to buy food produced in countries by cheap labour.

South Africa and Thailand, two countries notorious for lacking in workers’ rights and having extremely low wages, are two of the markets commonly used by the cheap food retailers in Australia.

Researchers from the Australian National University embarked on a mission to follow the supply chain of many private-label products sold in Australia, which found them in South African fruit processing factories and canned pineapple facilities in Thailand.

"One of the canneries made private-label products for over 100 supermarkets," researcher Libby Hattersley, who inspected the South African businesses, told The Age.

"They just slap the retailers' label on it and send it out to them."

Differing food safety laws a risk for consumers

While the ethical issues involved with sourcing food from such countries are becoming increasingly important to consumers, there are various other issues involved with these systems.

“[No Australian food manufacturers] can survive in this environment, most places I’m going, they’re even competing with their own plants in other countries, if the Malaysian or Chinese plant is going better, they have to compete,” Jennifer Dowell, National Secretary of the Food and Confectionary division of the Australian Manufacturers Workers Union (AMWU) told Food Magazine earlier this year.

“The problem with that is that people aren’t comparing like with like.

“We produce food to a very high level and what is being imported from overseas needs to be the same quality.

“There needs to be more regulation and better testing for what comes into our country.

“If food is imported from a high risk site, like China, that will undergo testing, but not if it’s from New Zealand.

“The way the import laws work in New Zealand mean that they can import a product from China, put it in a bag in New Zealand and ship it to Australia as a ‘product of New Zealand.’

“If we try to export to other countries we face huge barriers, but we have removed all the barriers for others getting food into our country.”

The issues with the Senate Inquiry

Dowell was heavily involved in the Senate Inquiry into the supermarket duopoly in Australia, which was set up to investigate the anti-competitive practices and bullying behaviour of the major supermarkets, which are pushing Australian companies out of business.

But ironically, or tragically, the proof was in the imported pudding, as the Inquiry struggled to convince manufacturers to speak up, as they were terrified of the repercussions, including being relegated to a lower shelf, incurring more fees or removed from the shelf altogether.

Australian food producer Dick Smith said the blame lands at the feet of supermarkets ALDI and Costco, who rely entirely on imported goods, when he fronted the Inquiry earlier this month.

He believes the other supermarkets embarked on a game of catch-up, which has led to the current situation.

Australian made: are people really willing to pay more?

In April, Smith joined a number of local food and beverage producers, including Glen Cooper, chairman of Australia’s largest beer brewer, in  calling for a dedicated “Australian made” aisle in supermarkets to make it easier for consumers to choose locally made products and keep local businesses afloat.

Cooper believes laws which force supermarkets to set aside a minimum quota of floor space for locally-made food would be one way to slow the flood of cheap imports and prevent some manufacturers from tricking consumers into buying products they think are made in Australia, but are in fact made primarily from imported products.

"It's not realistic for busy shoppers to read every label to see its country of origin before you put it in your trolley," Cooper told Channel 7's Out Of The Blue program.

"So I think they [supermarkets] should be forced to have a certain amount of locally grown content and that it should appear in a clearly defined area designated for Australian-made products only.

While most Australians say they would prefer to buy Australian made, even if it comes at a higher price – indeed, at last check, a poll on The Age’s website showed 80 per cent said they would pay more for locally produced foods – the realities of the current economic climate are seeing more shoppers buying primarily on cost.

Coles and Woolworths maintain that they endeavour to source the majority of their food products from Australia, but one in two products in the Woolworths Select brand is imported.

It’s premium brand, Macro, has 85 per cent Australian products.

Coles will not release a figure on the percentage of its private label products that are sources locally, but The Age reports a source with connections to the business said it imports about one third of its own brand products.

The supermarkets like to toot their own horn when they do make a local supply deal, and blame it on a lack of Australian interest when they source from foreign markets.

"You'd be surprised how many times we get no one responding in Australia to our invitations to supply," Woolworths head of own brand Gordon Duncan told The Age.

It is notoriously difficult to get any Australian food manufacturers to speak on the record about the struggles, as they fear punishment from Coles and Woolworths, but Food Magazine is aware of numerous companies who are unable to supply to them due to their unrealistic demands.

Indeed, earlier this month Transport Worker Union (TWU) accused the major supermarkets of contributing to road deaths as they place unrealistic expectations on suppliers and drivers.

Coles recent deal with Simplot, the only remaining Australian-based frozen food processor,  to supply its house-brand vegetables, will apparently be so good for the industry they won’t even be able to grow the amount needed to supply both major supermarkets, according to Duncan.

The peak representative body, AusVeg, has labelled this “nonsense.”

Considering that in the last two years, fruit and vegetable exports have declined $200 million to $497 million, Coles’ comments are very optimistic.

Earlier this month the second Queensland tomato processor to go into administration this year left 40 employees out of work.

Bundaberg tomato farm, Basacar Produce went into voluntary administration, following in the footsteps of the nearby SP Exports, which collapsed in February, blaming the high Australian dollar and the supermarket price wars.

The SP Exports farm was the biggest in Australia before it collapsed, leaving hundreds of people unemployed.

While the Simplot-Coles deal is being touted as positive for the produce industry, it could mark the beginning of issues for the frozen vegetable industry that have plagued fresh produce suppliers for some time.

With the dairy industry still reeling, Coles slashed the price of produce in half in February and AusVeg spokesperson Simon Coburn told Food Magazine it “had the making” of the milk price wars.

“Long term this could deliver lots of damage to the industry,” he told Food Magazine.

“Depending where the reduced retail price is going to be absorbed, whether it’s a small grower or a big business, this will damage them long term.

“Eventually it will come back to growers and that’s where they’ll get into trouble.

“These prices aren’t sustainable if they’re passed onto growers, small operations and even big ones won’t survive this.

How do you feel about buying imported versus local products? Do you think we need a Royal Commission into the state of the supermarket duopoly? 

Potato farmers call for investigation into McCain’s

McCain's has been accused of ripping off Tasmanian potato farmers, and a leading agricultural group wants the Australian Competition and Consumer Commission (ACCC) to investigate.

According to farmers who supply potatoes to McCain’s, 28 of them have been told they will not have contracts in the upcoming season, and in further breach of the growers’ collective, the fast food processor has also allegedly been negotiating lower prices with a select number of growers.

Previous potato contracts with Heinz have been negotiated by the growers’ committee, but the remaining 15 will now have to negotiate individually and sign confidentiality agreements, according to farmers.

"I think it's just a very poor way of doing business," Potato farmer Richard Bovill told the ABC.

"I think they just haven't had the courage to come out and deal with these people in difficult situations."

The industry believes the individual negotiations will force farmers into lower prices.

Graham Harvey from McCain’s told the ABC contracts are still being negotiated and collective bargaining is voluntary.

"Certainly numbers aren't final and to be quoting number of growers that have been cut and price reductions is just speculation at this point in time,” he said.

McCain’s processing plant in Smithton is experiencing less work as the demand decreases, like so many other food manufacturers in Australia recently.

According to Tasmanian Farmers and Graziers Association's Andrew Craigie, potato farmers are now at a loss about where to go from here.

"The ones I've spoken to are absolutely shattered," he told the ABC.

"There seems to be no rhyme or reason at why some were approached and some weren't approached, so they're left very much in the lurch that they have nobody to sell potatoes, possibly, to next year."

Sustainable Agricultural Communities’ Mike Badcock wants the ACCC to investigate the decisions, which he says are unfair.

"This is taking competition clean out of the system," he said.

"The farmers are having to sign an agreement where they will not be releasing what tonnage they get and what price they're going to get and it's splitting the grower organisations to smithereens."

Federal Government provides $1m funding to improve dairy technology

Dairy Australia has received $1 million from the Federal Government to conduct research to assess energy efficiency on dairy farms nation-wide.

As the national services body for dairy farmers and the industry, Dairy Australia helps farmers adapt to a changing operating environment, and work towards a profitable, sustainable dairy industry.

The funding will provide over 900 farmers with information and support to improve farm energy efficiency, hopefully cutting costs for individual farmers and larger organisations, who are struggling to compete in the current retail environment.

Earlier this month, dairy farming was rated the second worst job in the world, based on physical demands, work environment, income, stress and hiring outlook. 

In April, Western Australian farmers met with Wesfarmers boss Richard Goyder to discuss the impact of the milk price wars on production and try to find a solution.

The farmers want fairer pricing strategies from the group, which includes Coles, and last week the WA Farmers Federation passed a motion to boycott Wesfarmers and its subsidiaries.

The WA Farmers Dairy Council say the “predatory pricing” by the major supermarkets have devalued the industry.

The Australian Dairy Industry Council’s project is also supported by the Australian Dairy Industry Council, milk processors and state agencies.

Manager of Dairy Australia’s Natural Resource Management Program, Catherine Phelps, said the cost of using energy is a major concern for farmers and other workers in the dairy industry.

 “The conditions are right for a very effective national project,” she said.

“The secured funding would help deliver energy assessments to all eight dairy regions across Australia, tailoring it to meet local needs.”

Some of the recommended options will most likely include changes to management practices, optimisation of current equipment and capital investment, Phelps explained.

50 per cent sold with 51 weeks to go before AUSPACK PLUS 2013

AUSPACK PLUS organisers are continuing to surpass their KPI’s for the 2013 exhibition with over 3200 square metres of space already sold and there is still 51 weeks until the show opens.

According to Luke Kasprzak, Event Manager, exhibitors that have signed include packaging and processing machinery companies, plastics manufacturers, processing equipment suppliers and leading labelling and coding agencies in Australasia.

“Companies that have already booked stands include ERC Packaging, Australis Engineering, FlexLink Systems, Festo, JMP Australia, HMPS, ABB Australia, A&D, Accuweigh, Laser Resources, Result Packaging, ITW Zip-Pak, Rhima Australia, Plastral and many more,” Kasprzak said.

As Mike Phillips, Managing Director, ERC Packaging said ‘they are pleased to once again be taking part in AUSPACK PLUS and are looking forward to introducing just some of their many products to the Sydney market.’ 

“We are looking forward to participating in the Sydney event and promoting not only our expansive range of bag sealing machinery, induction sealers and shrink labelling machines and labels but we will also be demonstrating our expanded range of container sealers including the Modified Atmosphere (MAP) range,” Phillips said. 

Peter Gustafson, Managing Director, Australis Engineering, added that they are exhibiting at AUSPACK PLUS 2103 because it brings together the decision makers across the FMCG sector.

“AUSPACK PLUS has rapidly become the preeminent tradeshow in Australia and therefore an un-missable event. By exhibiting at AUSPACK PLUS 2013 Australis Engineering benefits from exposure to the right industries and most importantly the decision makers in those industries and will use the event to showpiece our Mini Linear Palletisers and Multi-Axis Conveying solutions,” Gustafson said.

Peter Hutchings, Managing Director of FlexLink Systems said he booked his 2013 exhibition space due to the highly successful exhibition stand they had in 2007, 2009 and 2011.

“At AUSPACK PLUS 2103, FlexLink Systems looks forward to showcasing a comprehensive range of conveyor systems including our new WL wide conveyors, stainless steel solutions, software, line control and pallet systems,” Hutchings said.

“FlexLink Systems sees this exhibition as a fantastic way to communicate and demonstrate our company’s products and capability to our broad range of customers and potential clients.”

AUSPACK PLUS 2013 is a ‘must-attend’ exhibition on the Australian Packaging and Processing calendar and will be held at the Sydney Showgrounds, Sydney Olympic Park from the 7th to the 10th of May 2013.

AUSPACK PLUS is owned and presented by the Australian Packaging and Processing Machinery Association (APPMA), Australia’s only national packaging and processing machinery organisation.

To receive a prospectus on exhibiting at AUSPACK PLUS 2013, contact Luke Kasprzak, Event Manager, 02 9556 7972 or LKasprzak@etf.com.au

Are Coles and Woollies bullying the major TV networks too?

While everyone in the Australian food manufacturing industry is aware of the bullying behaviour of the major supermarkets, it seems they are also now impacting Australian TV networks, which are declining to screen ads criticising Coles and Woolworths’ stake in pokie machines, but refusing to say why.

The advertisement, which point out that Coles and Woolworths own “more dangerous pokie machines than the five largest Las Vegas casinos,” shows a woman unwittingly spending excess money at the supermarket checkout, which has been changed to look like one of the gaming machines.

It also targets the “Fresh Food People,” slogan, changing it to “The Pokies People,” and also uses the Woolworths Everyday Rewards logo, which it launches today.

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The advertisement, created by GetUp! is not being screened by the major TV networks in Australia, but none of the stations have explained why.

A spokesperson from the advocacy organisation told Mumbrella they have not been given a reason why they won’t show the ad.

Food Magazine has contacted Channels 7, 9 and 10 this morning, but nobody was able to provide any answers.

As the Senate Inquiry into the impact of Coles and Woolworths’ anti-competitive behaviour is having on the food industry struggles to get witnesses to comment, for fear of being punished, it seems the major supermarkets are throwing their weight around in an increasing number of sectors.

Calls to Coles and Woolworths have not been returned.

The far-reaching impact of Coles and Woolworths has long been documented, and many are highly critical of the stake they have in various sectors.

The Senate Inquiry is slowly gaining some information about the issue, but most food companies are still too afraid to comment on the actions of the supermarkets.

Do we need a Royal Commission into the power of the major supermarkets in Australia?

Coles and Woollies not entirely to blame for supermarket wars, Dick Smith tells Inquiry

Dick Smith has warned against forcing the break-up of Coles and Woolworths, saying it would only further damage the food sector.

Speaking at the Senate Inquiry into the Australian food processing sector this morning, the entrepreneur also said government protection of the food industry, by enforcing a quota of Australian products, would be a positive move.

Industry protection funds, similar to those in the car industry, could be another viable option, he said.

In his submission to the Inquiry, Smith blamed the current supermarket climate, which is pushing Australian companies and farmers out of work, on rich foreign companies, namely ALDI.

He said dividing up Coles and Woolworths will not improve the situation “because I think they will just become uncompetitive when they become small with the internationals we allow them to compete with.”

Smith voiced his concern that the current “extreme capitalism” environment will lead to WalMart and Costco being the only supermarket companies in the world.

He told the Inquiry he does not believe the infamous milk price wars, which saw Coles drop the price of private-label milk to $1 a litre and Woolworths quickly follow suit, was either of their faults, but rather the blame is squarely at the feet of foreign-owned cheap food retailers.

''I think Coles and Woolworths were reacting to the situation that Aldi and Costco have come here,'' Smith said.

He also wants penalty rates in Australia looked at, and says a reduction in the rates would improve our competitiveness.

''Do we value our country towns?” he asked

“Which I do, do we want to go to these country towns and find them boarded up?

“Because our farmers are paying $20 an hour for labour, (and) will never be able to compete with people paying $5 an hour.

''But don't blame Coles and Woolworths for it, I think we are getting off the track…I think it is the fact consumers want the cheapest prices.''

Smith maintains Australians would readily pay slightly higher food prices if it ensured the future of the food industry.

Unfortunately, recent studies have shown that while most Australians say they would like to buy Australian produced and processed food, the main contributing factor is low price.

Similar rules to those in television broadcasting which impose a certain quota of locally-made content, would be effective in the supermarket sector, he said.

''One idea that I heard a number of days ago which could have potential is that we require Australian supermarkets to have a certain percentage of their sales, say 25 per cent, to be from Australian-owned processors and made and grown in Australia,'' Smith said.

''The advantage in doing that is it will create a level playing field.''

Last month Smith, along with Greg Cooper, chairman of Australia’s largest beer brewer started calling for a dedicated “Australian made” aisle in supermarkets to allow shoppers to easily understand which products are locally made and produced, and therefore keep local industries alive.

The current packaging and import regulations leave most consumers confused, they said.

Smith predicts that ALDI’S share in the supermarket sector, currently sitting at 8 per cent, will increase gradually over coming years.

 

300 more jobs slashed in dairy sector: Murray Goulburn’s profit declines

Australia’s biggest dairy foods processor will slash 300 jobs to lower costs in the increasingly difficult dairy industry.

Murray Goulburn, a co-operative owned and controlled by dairy farmers turns a third of Australia’s milk supply into diary products which are then sold domestically and to export markets.

It recently achieved praise and appreciation as a price leader in the local market, after increasing the price it paid for milk products at the farm gate.

But the pressure on the dairy sector from supermarkets and importers has led to a decrease in Murray Goulburn’s profits.

Murray Goulburn, the maker of Devondale butter and Cobram cheese will cut the 300 jobs to lower costs in the increasingly difficult dairy industry.

It conducted a detailed review of its head office and processing operations before deciding to eliminate 12 per cent of its workforce.

 

The 300 jobs will come from various parts of the business, with 168 positions from processing sites and distribution centres lost, 59 from the head office and the remainder through natural attrition.

Those in processing and distribution roles will be made redundant by the end of June and the head office roles will become redundant by September.

Managing director Gary Helou blamed the decline in world market prices as a result of higher global milk supply as the main reason for the job losses.

He said the company needs to improve its manufacturing efficiency, slash head office costs, increase its global competitiveness and deliver higher farm-gate prices, and these changes will begin some of these improvements.

"These are difficult but necessary decisions to ensure that Murray Goulburn can remain competitive,'' he said.

“It is in the interests of our suppliers, shareholders, employees, communities and customers that MG remains a strong business into the future.''

The company has promised employees full entitlements.

Image: The Herald Sun

Dick Smith fronts Senate Inquiry into food industry

Australian entrepreneur Dick Smith will front the Senate Inquiry into the food processing industry and supermarket dominance today.

The Inquiry has come up against problems getting people and companies to participate in the process, as the supermarkets bully them into silence through their market control.

Smith is one of the few who is openly critical about not only the anti-competitive practises of the supermarkets, but also the government policy that is ruining the entire Australian food industry.

The case against ALDI

He  has taken a slightly different angle in his submission to the Inquiry, effectively blaming foreign-owned supermarket ALDI for most of the problems in the supermarket sector.

“ALDI’s lower prices primarily come from having lower labour costs, that is, they employ less Australians,” Smith writes in his submission. 

“When Coles and Woolworths follow this particular trend, (as they will be forced to) where in a large supermarket you might only have one or two Australians employed our food prices may be slightly cheaper but in the long term our taxes will  very likely go up to pay for the social services of people who no longer have jobs.

“When ALDI stocked a limited range of products there was hope that the Australian owned retailers could survive because they could sell the other necessities that were required, place a higher price on those and obtain an extra margin to cover their extra staffing overheads. 

“The alternative was to go broke.

“That’s  now  all changed.  

“ALDI have announced that they are going to increase their product range so a typical Australian family can buy all of their products in an ALDI store. 

“This will result in Coles and Woolworths either following ALDI further on this lower cost, 90% private label, “lack of choice” model or losing substantial market share and eventually failing.”

Woolworths and Coles are already increasing their private-label products at a rapid pace, pushing Australian companies out of business and placing unfair demands on producers and transporters.

Supermarkets killing drivers

Yesterday the Transport Workers Union (TWU) accused the major supermarkets of causing road deaths by forcing truck drivers to drive for unsafe lengths of time and meet unrealistic deadlines.

"The union is saying very clearly to Coles and the other retailers that [their] practices have to change, that they are literally killing people on our roads because of the economic pressure," TWU federal president Tony Sheldon told ABC News.

"What happens with Coles and other major retailers with dominating the market at 32 per cent of road transport tasks, is that they say to manufacturers, they say to farmers and they say to transport operators that you've got to do this work the cheapest and the fastest way you possibly can.

"They're price takers, which means the trucking industry either makes the decision to do the work or they don't have a job."

Collapse of Australia's beetroot industry

Smith points towards the beetroot industry as a prime example of the damaging impact the ridiculously low prices have on Australia.

“As an example, for many decades, a simple can of Australian grown beetroot has sold for about $1.50 in our supermarkets and this has allowed a viable farming and  processing industry to exist,” he said in his submission to the Inquiry.

“The cost price of such a can is about 90 cents, the remainder being the supermarket overheads and profit margin. 

"Not at any time in the past few decades have I  heard of consumers complaining about the price of a can of beetroot. 

“In fact, it’s about half the price of a cup of coffee and I find it truly amazing that it could be so cheap, considering that Australian award wages and conditions are included in the price.

“Notwithstanding the lack of pressure on price, ALDI started to sell beetroot at 75 cents a can.   Immediately, Coles and Woolworths matched the price, as they had to.  

“ALDI proudly claimed that the beetroot they were selling was from Australia however they did not state that this would basically sound the death knell to our beetroot growing and processing industry.

“Within a short period of time, Heinz announced the closure of its beetroot processing plants in Australia, sacking hundreds of workers and Australian farmers were ploughing their beetroot crops back in the ground. 

“Heinz announced that their beetroot from now on will be grown and processed overseas.

“At the present time, there are still stocks of Australian beetroot at 75 cents a can, but it’s obvious that once these go, if the price is to remain the same, all beetroot in future will come from overseas. 

“We will have lost a complete industry, but this didn’t happen  because of pressure from consumers. 

"This is an important point. 

“It happened because one of the most astute examples of modern “extreme” capitalism, fully foreign owned ALDI, decided to flex its power.”

Smith said another differentiating factor between ALDI versus Coles and Woolworths is that the latter two are publically-listed companies, dependant on and accountable to shareholders, whereas ALDI is privately owned by a German company.

The “highly secretive” ALDI is therefore creating an uneven playing field, he said in his submission.

"Intentionally vague" labelling

He also takes aim at the labelling laws for country of origin, claiming they are deliberately misleading.

 “The current food labelling laws in Australia are intentionally vague so the requirements are accepted by the large multinational companies who  have political clout,” he said. 

“Although there have been campaigns such as the “Australian Made” mark, this was in reality an indication that the majority of the cost of production of a product was made up with Australian content. 

“For example, if the cost of a jar, a lid, label and an ingredient such as sugar represented greater than 50% of the total cost, but the primary ingredient (say, the strawberries in strawberry jam), was imported, the label could  still  state  “Australian Made”.

“In more recent times many labels bear the words “Made in Australia from imported and local ingredients”.  In this case, the local content may be very small.”

Smith’s own company, which produces food ‘as Australian as you can get” has felt the impact of the obsession with cheap, often imported food, and is personally watching his products getting pushed out of the market.

“Turnover peaked at $80 million per year in 2002 and has now dropped to $8million per annum as most Australians move to lower prices,” he said of his company, Dick Smith Foods.

“It’s interesting to note that the prime reason Coles have refused to stock our products is that  they are about 30 cents more expensive, and they believe Australian consumers will not  support this extra cost.”

A statement from Senator Richard Colbeck, the Liberal Senator for Tasmania who called for the Select Committee last year, said he is pleased that the Inquiry has secured both Coles and Woolworths to appear as witnesses at a subsequent meeting in Canberra next week.

The committee is due to release the findings of the Inquiry by 30 June.