SPC Ardmona first in line for anti-dumping investigation

One of Australia's largest food processors, SPC Ardmona, has had its anti-dumping case approved for formal investigation by the new Australian Anti-Dumping Commission.

SPC Ardmona has confirmed investigations have been initiated into both its peaches and tomatoes anti-dumping claims – the first cases to be approved by the Commission.

The WTO Anti-Dumping Agreement allows countries to take action against imports from countries allegedly exporting at 'dumped' prices.

"Dumping occurs when an overseas supplier exports a good to Australia at a price below its ‘normal value’ in the supplier’s home market. If dumping causes, or threatens to cause, ‘material injury’ to local producers of ‘like goods’, then remedial action can be taken against the imported goods concerned," shadow minister for agriculture, John Cobb, explained earlier this year.

Peter Kelly, managing director, SPC Ardmona, said the announcement today validates the hard work the company has undertaken in recent months to "revitalise" itself, and says New Zealand has had similar safeguards in place for more than a decade.

"We are determined to fight for our business in the Goulburn Valley and the future of Australian food processing. We believe we have a very clear case for Anti-Dumping measures and it’s encouraging that the government has deemed there to be enough evidence to warrant a formal investigation," he said.

In April SPC told 170 of its Goulburn Valley fruit growers that it would no longer accept their produce, blaming the high exchange rate and a decline in export markets.

The minister for home affairs and minister for justice Jason Clare officially launched the new Australian Anti-Dumping Commission in Melbourne today, naming Dale Seymour as the new Anti-Dumping Commissioner.

"Today we have a new Commission, a new Commissioner and $24.4 million in new resources to conduct anti-dumping investigations. This is good news for Australian manufacturers and workers," Clare said.

The Commission also confirmed it had initiated investigations into peaches imported from South Africa and tomatoes imported from Italy.

 

Cheap imports create unfair playing field: Kagome

Kagome Australia, the country's last major tomato processors, has thrown its weight behind a Productivity Commission review into processed fruit imports, arguing Australian brands can't compete in today's marketplace.

According to ABC, CEO of Kagome Australia, John Brady, said cheap imports are making it difficult for Australian food manufacturers to stay afloat.

"Some of my clients don't exist any more, how is that for an indication, such as Rosella, they are closed.

"I've seen a concentration in my customer base because they've been unable to compete on a level playing field," he said.

The company, which makes canned tomato products and pastes, is supporting the recently announced Productivity Commission review into safeguards against imported processed fruits and tomatoes.

The Commission is to report its findings to the government within the next three months.

 

Cheap import tariffs considered by Productivity Commission

The Productivity Commission will look into the possible introduction of "safeguards" against imported processed fruits and tomatoes, following SPC Ardmona's announcement that it will axe up to 114 growers for next summer.

The high exchange rate and a decline in export markets led the fruit processor to cut back its quotas, with the company asking the federal government to introduce special protection safeguards, including an emergency tax on imports.

As a member of the World Trade Organisation (WTO), Australia has made binding commitments in relation to the trade of goods and services, but the WTO allows safeguard measures to be introduced in response to "unexpected and unforeseen increases in imports which are causing or threatening to cause serious injury to the domestic industry."

The Commission is to report its findings to the government within the next three months, far too liberal a time frame, according to KAP federal leader and member for Kennedy, Bob Katter.

"SPC Ardmona pleaded with the government several months ago for emergency safeguards, but on Friday we are told that an inquiry just to consider whether temporary tariffs are even justified is not due to report to government for another three months – after the election," he said.

Katter called on the government to endorse the emergency tariffs on cheap imports, which he says are threatening the viability of homegrown food processors, such as SPC.

"The competitiveness of Aussie food producers is already badly handicapped by our artificially-inflated Australian dollar, which makes it up to 60 percent cheaper to import foreign produce at the expense of Australian jobs and industry," he said.

"Let every Australian understand – SPCA is the not just our country's last fruit processor; it is also the Goulbourn Valley’s biggest private employer, injecting some $63 million into the local economy through almost 900 direct full-time staff and supporting a further 2700 jobs, including the training of young apprentices.

"The collapse of SPCA would lead to even more farmers being forced to leave their good quality, home-grown fruit go to rot on the ground," Katter said.

 

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

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

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

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

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

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

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

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

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

"The people love it fresh," she said.

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

 

State vs federal in WA grape gripe

A proposal to allow Californian grapes into Western Australia is seeing the state’s Department of Agriculture take on its federal counterpart in an effort to maintain its pest-free reputation.

According to thewest.com.au, the WA Department of Agriculture and Food is disputing the Federal department’s finding that grapes imported from California carry a low risk of bringing the fungal pathogen, phomopsis viticola, with them.

WA department's biosecurity experts are arguing that there is a high risk the pathogen could be introduced to the state, and would then threaten to wipe out its table grape and wine industries.

Growers from  Margaret River and Swan Valley have united to oppose the lifting of the ban on imports, with Swan Valley and Regional Winemakers Association president John Griffiths arguing that the federal department is putting free trade above the welfare of family-run vineyards.Griffiths said importing Californian grapes would open the door to several other pests and diseases including phylloxera and Pierce's disease, one of the biggest threats to grape growers.

 

Current food labelling guidelines are a joke, says Xenophon

As the federal election draws near, the food labelling debate is gathering momentum with key figures expressing their concerns on the current guidelines and standards.

Independent senator Nick Xenophon, has described the current labelling guidelines as ‘a joke’ as reported by the Weekly Times Now.

"I want food labelling to be a key election issue because current laws aren't just useless, but misleading," Senator Xenophon.

Backed by the Greens, Xenophon believes that the more open the discussion about Australia’s food labelling standards, the better.

"If I'm back in the senate and back in the balance of power position, I will make food labelling a key issue,” he said.

"And while the major political parties don't seem to be taking an interest at this stage, they will have to sit up and listen if this current drive continues."

Billionaire businessman Clive Palmer is also supporting this sentiment by stating that should his party, the United Australia Party, be successful in the upcoming election, then he will introduce a law sighting the mandatory labelling of consumable goods containing less than 95 percent Australian components and packaging.

"Under the current laws, it is impossible to determine the breakdown between ingredients and packaging when an item is labelled Australian-made," Mr Palmer said in a statement.

"People may think they are supporting Australian producers when in fact only a very small percentage of what they spend may be staying in the country."

Federal Member of Kennedy, Bob Katter has also joined the debate by stating that he wants imported foods to carry warning labels. He says that the labels should inform consumers of potential unidentified risks that imported foods may carry, including health risks and the use of harmful chemicals.

The debate comes at a sensitive time for many growers around Australia as the rise in imported goods reaches all time highs. 60 orchardists in the Goulburn Valley region were informed earlier this year that SPC Ardmona will no longer purchase fruit from growers, and McCain foods also announced last week that they will not be renewing the contracts for four potato growers past harvest season in November.

 

Quit your whinging, it’s our fault! AUSBUY’s take on Simplot and McCains cutbacks

In light of recent announcements from Simplot and McCains regarding cutbacks to their produce supply, AUSBUY have come out to say that when it comes down to it, the only ones to blame are ourselves.

McCains Foods and Simplot have blamed the ever powerful Aussie dollar and the threat of cheap imports for their drop in profits leading to a reduction in renewed supplier contracts and the possible closure of two processing plants respectively.

But is the problem really the fact that we have sold the majority of our major food companies to the foreign entities who make production decisions in boardrooms around the globe?

AUSBUY poses a good argument… Below is a statement they released this morning: 

Stop whinging – we have done this to ourselves!!! Simplot (USA) has been a relatively benign foreign investor since it bought many of the brands and factories formerly owned by the Australia Public Company in the mid 1990s (Edgells). 

Likewise we thought McCains (Canada) was here to stay. Will they follow the Heinz example to set up in New Zealand and sell back to us? Decisions are now made overseas about the closure of factories.

We have been complicit in the decline of our food manufacturing in Australia. Over the past three decades we have allowed majority control beyond the farm gate of every major food commodity except rice.

The Australian Consumer and Competition Commission has overseen the loss of control to overseas interests and retailers in the name of competitiveness, while our farmers and our local manufacturers are expected to play to a different set of rules to their competitors. 

While we claim food manufacturing is the largest manufacturing sector we have remaining, Australia has no major food companies. Decisions about our manufacturing are made in overseas board rooms, not here.

Other countries look after their own. New Zealand has the largest dairy company in the world, Fonterra. New Zealand obtained an amendment under the WTO rules to stop imports which impact their strategic industries. New Zealand stopped the sale of eight dairy farms to the Chinese last year because it did not meet the national interest test.

Its government cannot divest assets which are their for the long term interest of its citizens. Australians have no rights. Countries such as the USA strictly control manufactured goods through labelling law compliance. They decide what products will be sold in the USA.

Despite the warning signs, Australian decision makers turned a blind eye. Foreign investment at any cost has been the call cry! And our people are bearing the consequences! In recent years we have condoned the importation of packaged foods and fresh produce which does not meet our standards.

Dumping is rife! Our labelling laws are inadequate. We have under resourced our gate keepers AQIS, Bio Security Australia and Australian Standards. In recent years, aided by our high A$, our open door policy to imports, and our largess and benevolence to help developing countries, we have imported foods in direct competition with own farmers and their skills. Our borders are not secure. Imports are coming from countries with labels which do not meet our standards, are replacing local producers on the shelf.

The growth of private label among the retailers has also put addition burden on our manufacturers to compete on price with overseas manufacturers if they want to keep their factories operational.

In addition, in recent years we have been net importers of food. While retailers might espouse their support for fresh produce on the shelves, imported foods are being substituted for local produce in many manufactured goods. Made in Australia does not mean it is owned here or sourced here with the current rules of 51% substantial transformation.

The problem in Australia is further exacerbated by the closures in our regional areas where produce is “value added”, creating skilled manufacturing jobs while our farming skills are retained.

 The Australian owned businesses who are competing in this environment deserve our support. AUSBUY was prescient in warning of the consequences of loss of control of our wealth creating assets when it formed during the recession we had to have in 1991. 

Australia’s challenge in the coming years is to rebuild our nation, get our people working productively for Australia again, and reinvesting in our future. If we cannot find answers to the questions we are asking then ask other questions. The seeds of the future are in those Australian owned companies and our farmers, many of whom have the answers. Are we listening?

 

Government talks provide hope for fruit growers

Goulburn Valley orchardist Peter Hall, along with fellow fruit growers and officials from the Manufacturing Workers Union discussed the regions fruit crisis with parliamentarians in Canberra yesterday.

Following the decision to cut the supply of fruit significantly from the region earlier this year due to increased imports, SPC Ardmona has called for the implementation of emergency safeguard measures from the Federal Government to protect growers in the future as reported by the Weekly Times Now.

According to Hall, figures from the growers’ association showed that SPCA’s discontinuation of contracts with 60 growers would equate to around 1800 jobs lost. Despite this, Hall believes that the government is making progress on the issue.

"I get the sense there is some movement on it, but from a fruit growers point of view it's been very hard to get government's ear when it comes to these things in the past,'' Mr Hall said.

"We were basically told the Coalition was supportive of the measures if they fitted the WTO protocols, and the government is listening to us at the very least.

"We're still in limbo, but this is an unfolding crisis and the more discussion this opens up, from a farming perspective, the better.''

Hall believes that the downfall of major food processors Rosella and Heinz should serve as a warning to industry.

 "We want to pay good wages to workers, we don't want fruit covered in chemicals, but we need to be given this support to go on doing it. Otherwise there won't be a fruit industry here that's competitive.''

"This is an Australian industry which – despite all the challenges – has been profitable for 100 years.''

 

McCain Foods under pressure from Aussie dollar and imports

Food processor McCain Foods has confirmed that four potato growers in Ballarat will not have their contracts renewed for the October/ November harvest period.

The decision to cut the growers contracts was allegedly made due to the strong Aussie dollar and the threat of cheap imports according to the Weekly Times Now.

Supply chain director Gerry Farnell said the company had been in discussions with growers across the country over supply and individual requirements for the past three months.

"The company has a long-standing history with many growers in Ballarat, Tasmania and South Australia, and we are committed to maintaining those relationships where we can," said Farnell.

Farnell says that surplus potatoes from last year’s harvest combined with lower consumer demand and in increase in imports, fuelled the company’s decision to reduce supply.

"Only a decade ago, Australia's potato growers were competitive and import-resistant, and this should be the No.1 priority for growers," he said.

However some growers have claimed that McCain ‘bullied’ them, stating that they risked the cancellation of thier contracts if they did not concede to lower prices.

"Anyone who has spoken out no longer supplies McCain," one grower said.

 

Mad cow disease is still being detected, researcher warns

Professor Colin Masters, a leading expert on mad cow disease from the University of Melbourne’s Mental Health Research Institute says that British cattle are still contracting the deadly disease.

Although there has never been a confirmed case of mad cow disease, or Bovine Spongiform Encephalopathy (BSE) in Australia, Masters has warned Australia not to “lower its guard” on imports as the blanket ban on affected countries has been lifted as reported by Weekly Times Now.

"There still are a few animals detected in the UK with BSE,'' Masters said. "The question is, where are they getting it from?

"I do think they've got it largely under control, but we're not completely sure it's 100 per cent safe.''

Masters who has advised both the British and Australian governments of the effects of BSE, recently spoke at a senate inquiry into beef imports stating that the horsemeat contamination scandal in Europe represented a ‘weak link’ in certifying imports

"To a large extent, we are dependent on certifications from countries of origin that their exports (and our imports) are BSE-free,'' he said.

"The difficulty in detecting BSE makes complete assurance of freedom of contamination very challenging.''

 

Wins & woes in food manufacturing: Part three

There are obvious pros and cons to manufacturing wine on a small island off the coast of SA, but Yale Norris, general manager of Islander Estate Vineyards, says he wouldn't change a thing if he had his time again.

Islander Estate's founder and French winemaker, Jacques Lurton, planted the vineyard on Kangaroo Island in 2000, knowing that the island's cool climate, pristine environment and long ripening season, combined with his vast experience in winemaking, would produce some top notch wines. And he wasn't wrong.

"I think the biggest accomplishment that we've achieved as a company is that we're highly rated by Australian wine critics, and we have a five star rating from (James) Halliday, which puts us in around the top four percent of wineries in Australia," Norris told Food magazine.

Despite the brand's loyal following on the island, on the mainland and overseas, in countries including China, Hong Kong, Sweden, Finland, Canada and also in the UK, producing wine on the island, which sits 13km from the coast of Australia, presents a number of challenges.

"Part of the downside of making beautiful wine on Kangaroo Island is that you have to struggle with getting things to and from the island, and that increases our production costs significantly. Everything we have from a parts' perspective for the winery and the vineyard has to come across by ferry and from an export perspective and a bottling perspective everything has to go back off the island by ferry. So our transport costs are exponentially greater than our counterparts on the mainland," said Norris.

The next biggest challenge Islander Estate, and no doubt other manufacturers on the island face is labour.

"That's because a lot of folks come to Kangaroo Island wanting to live here for a very relaxed lifestyle, and vineyard work isn't necessarily relaxing, it's pretty hard yakka. So we certainly have challenges with getting labour, and in getting people who are willing to stay."

Not only is it difficult for the winery to find and then retain good workers, but paying them also presents a problem. And it affects manufacturers across Australia, not just on KI, says Norris.

"The cost of labour is extremely high compared to other places in the world. That certainly makes it less competitive. I don't know the answer to it but it certainly is a challenge we face. A lot of unskilled jobs have very high rates and it makes manufacturing difficult.

"It's not really sensible to pay an unskilled person 200 percent to work on a Sunday," he said.

But unlike other Australian food and beverage manufacturers, Islander Estate isn't threatened by imported products competing for shelf space.

"Imports aren't a problem because of the high tariffs they pay to bring wine into the country. One of the benefits, as a consumer, of the high dollar is the fact that imported wine became more affordable. But the quality of an imported wine compared to what you find domestically in a similar price point is not there."

The bigger concern is one of oversupply, insists Norris. Wineries with more product than they know what to do with are selling in bulk to "the Coles and Woolies of the world", who are then selling it extremely cheaply.

"That's a difficult thing because you have some guys out there making nice wine that they're unable to sell and have excess capacity which is then sold as a clean skin. That's certainly a challenge because people have the perception that wine should cost $3 a bottle."

Norris' concerns were echoed in IBISWorld's recent Wine Manufacturing in Australia 2012-13 report which referenced a 2009 study in stating that 20 percent of bearing vines in Australia are surplus to requirements and at least 17 percent of vineyard capacity is uneconomic. The study also found that Australia is producing 20 million to 40 million cases a year more than it is selling.

"So the challenge for us isn't necessarily the high dollar, it's the amount of Australian wine that's looking for a home somewhere else in the world. The competition we face with domestic competitors looking for new markets outside Australia is certainly a challenge," said Norris.

Despite these challenges, Islander Estate, which produces between 5,000 and 6,000 cases of wine per year, sees great growth opportunities both here and abroad, with the brand's very romantic story proving to be a great selling point.

"The story is the driver of a lot of sales, no matter where you are – even domestically. People want to hear a story, they want to understand the history of the brand, why we're here, why they should like the wine, rather than just buying something off the shelf which has no meaning whatsoever," said Norris.

"The Asian market is certainly big on that and I think that's a huge driver of why we're there, because Jacques has both an extended family history and a personal history of making wine in different parts of the world andhe's got a very romantic story about coming to this small island and having a vision to create beautiful, world-class wine from this little place in the middle of nowhere. I think that adds a lot to the mystique of the brand."

So despite oversupply issues and unreasonable labour expenses, Norris insists Australia is one of the best places in the world to make wine, or more importantly, to make the sort of wine that they want to make.

"We have a lot of government support," he said. "I think the industry as a whole is allowed to have the freedom to make the wines that they want to make. That's one of the main reasons why Jacques [pictured] came here. In different parts of the world you have a lot of restrictions on what you can grow, where you can grow it, how you can blend.

"Like all things Australian, you have this amazing freedom here to go out and plant this here or have a punt, have a go and if it works that's great. If it doesn't, then bad luck. But I think it's really exciting that in Australia you can go out and cut your own path."

Check out part one and part two of this story and hear some other persepctives on today's manufacturing industry from those living and breathing it!

 

Are we allowing our fruit industry to wither?

The sight of Victorian citrus farmers bulldozing surplus trees due to the loss of supply contracts is a dramatic way to illustrate the quandary facing both Australian industry and growers.

In April Victorian fruit processor SPC Ardmona, owned by Coca-Cola Amatil, announced it was dramatically cutting its requirements for locally-grown fruit.

More than half of the 150 current peach and pear suppliers were told none of their crop will be required in 2014. Growers are now looking for Federal Government assistance to bulldoze 750,000 surplus trees, while SPC Ardmona has called on the government to impose emergency tariffs on imports to protect the local industry.

SPC Ardmona partially blames a high Australian dollar which has hit rural markets hard.

But also says it cannot compete against the supermarkets' overseas-sourced “private label” products. “We are competing against products from countries that have considerably lower labour and production costs and arguably lower quality standards than we have in Australia,“ Managing Director Peter Kelly said.

There has been increasing recognition that supermarkets have become the most powerful actors in the global food trade.

Jane Dixon and Bronwyn Isaac’s research explores in detail the problematic and paradoxical role of supermarkets in the Goulburn Valley’s food economy.

While the use of imported produce in supermarkets' home brand products benefits consumers through lower prices, they destabilise the regional agricultural economy and undermine a sense of community by displacing locally owned grocers and butchers.

Part of the issue facing Goulburn Valley growers is historical. Simply, an industry that formerly blossomed under protectionist and interventionist agricultural policies is now facing the realities of global free trade and competition.

The first fruit growers association was formed in the Goulburn Valley in 1891, with the Shepparton Fruit Preserving Company (SPC) established in 1917. In 2002 it merged with the Ardmona Fruit Products Co-Op Ltd to become SPC Ardmona and was acquired by Coca-Cola Amatil in 2005.

Up until the 1980s, the industry was cushioned by protectionist policies; but slowly, Goulburn Valley growers have been put under increasing pressure by international markets.

But the market forces argument ignores several factors.

There is the problem of what happens to the families and communities whose livelihoods have been underpinned by this industry for a century or so.

Johanna’s current PhD research with Victorian orchardists identifies a widespread sense of pessimism and frustration in a system that is dominated by supermarkets and in which growers are constantly under pressure to adhere to stringent quality assurance guidelines over which they have little control.

City of Greater Shepparton Mayor Jenny Houlihan said at a recent community rally “SPC Ardmona is vitally important to our local economy, and it is also part of our identity”.

In our view the growers are there as a result of previous public policy decisions, and so the public, via the apparatus of Government, is to some extent accountable for what happens to them.

Also, we are regularly told we are moving into an era of global food scarcity, with Australia well-placed to benefit by supplying high-quality food to our neighbours. Perhaps the Goulburn Valley situation lends weight to the argument that we are actually poorly prepared to become Asia’s food bowl.

It seems curious that we would allow this industry to wither. The existing complex system of skills, knowledge, infrastructure and supply chain relationships will be much harder to recreate in the future if they are permitted to unravel now.

The challenge is to navigate a path forward whereby the assets of the Goulburn Valley orchard industry are protected, and deployed into an economically viable future. So who should be doing what, if this is to be achieved?

Johanna’s current research indicates growers fare better when they produce multiple products, including a range of both different crops and different varieties, and when they supply multiple buyers and markets, including beyond the dominant retail supply chain. That is a strategy that warrants further investigation from growers and their industry bodies.

SPCA has been vigorously pursuing an innovation and diversification strategy to try to find profitable products and markets, as documented by Libby Hattersley and colleagues, and this needs to continue. This has included developing world-first new packaging technology such as single-serve plastic cups, and resealable plastic jars, as innovations on traditional canning technology. They have also established partnership agreements with overseas companies in order to gain access to new sources of supply and new markets.

There is a good case for Victorian Government involvement given its aim to double Victoria’s agricultural production, and the priority strategies identified in the Goulburn Valley Subregional Plan, part of Regional Development Victoria’s Hume Strategy for Sustainable Communities.

There is also a case for Federal Government involvement, in particular on moderating the power of the supermarkets. We watch keenly the current negotiations between the supermarkets and the Australian Food and Grocery Council.

Growers, communities, industry and government all have a role to play in charting a way forward for this industry. Let’s get on with it.

Jane Dixon's research was funded by the ARC.

Johanna Christensen and Michael Santhanam-Martin do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.

The Conversation

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

 

Katter proposes new labelling for imported produce

KAP leader and federal member for Kennedy, Bob Katter, is set to introduce the Imported Food Warning Labels Bill 2013 to the House of Representatives today.

The legislation aims to put the spotlight on imported food by labelling imported fresh produce and processed foods with this warning: WARNING: IMPORTED FOOD. THIS FOOD HAS NOT BEEN GROWN OR PROCESSED UNDER AUSTRALIAN HEALTH AND HYGIENE STANDARDS AND MAY BE INJURIOUS TO YOUR HEALTH.

Non-compliance could result in a $500,000 fine.

Katter said his proposed new labelling reforms would not only educate consumers of the health risks associated with eating imported foods, but could also drive Australians to buy locally and therefore support Australia's food manufacturing industry, which has struggled in recent times with a number of high profile brands collapsing.

The high Australian dollar, pressures from the supermarket duopoly and cheap imports have all been listed as contributing factors in the demise of brands including Rosella, Spring Gully and Cowra's Windsor Farm Food.

"Our orchardists are being forced to let their fruit rot on the ground and our iconic manufacturing processors are closing down because of the interminably increasing rivers of imported fruit and vegetables – from Brazilian juice concentrates to overseas tinned fruits that the supermarket giants favour in order to expand their private label range at the expense of Aussie businesses, farmers and jobs," said Katter.

"How can the supermarket giants continue to import fruit from other countries while the farmers and heroes of our great nation watch their fruit rot?"

Katter said he had no faith in Australia's biosecurity regime to protect Australia's agricultural industries from exotic pests and diseases, and said his proposed reforms could act as a warning for consumers.

"New Zealand has fire blight and therefore often sprays with streptomycin, which is quite rightly banned in Australia," he said.

"But there is currently no warning to Australian consumers, and both sides of Parliament should be ashamed of themselves, since both agreed to the apples coming into Australia."

 

Australian Made confronts senate on country of origin labelling

Australian Made has appeared before the senate standing committee on Rural and Regional Affairs and Transport regarding the labelling of beef imports into Australia.

The adequacy of current labelling laws were bought into question as well as the associated health and safety implications of importing beef from disease-affected countries.

Australian Made believes that the senate committee must stand firm regarding import regulations in order to maintain Australia’s reputation for stringent safety standards and environmentally friendly processes.

“In the case of beef, there is strong and justifiable concern about possible contamination of imported meat by diseases such as Bovine spongiform encephalopathy (BSE) and foot-and-mouth disease (FMD), and the consequent dangers to human health,” Australian Made Campaign Chief Executive, Ian Harrison said. 

The revised food standard which will come into effect in July 2013, covers compulsory country of origin labelling for unpackaged foods including beef, veal, lamb, hogget, mutton and chicken. These new standards do not extend to cover less common varieties including horse, rabbit, duck, turkey and quail.

Australian made is calling for compulsory country of origin labelling on all types of meat, seafood, fruit and vegetables and believes that it is within the interests of both business and consumers alike to develop uniform, easy to interpret labelling laws.

According to Harrison, research has shown that consumers have a strong preference toward Australian fresh and processed food due to the country’s stringent food safety standards.

“At present, the rules for using the Australian Made, Australian Grown (AMAG) logo on food products are more stringent than the rules applied by the ACCC for products to be described as ‘Australian Made’ or ‘Made in Australia’,” said Harrison.

“Being able to describe their products as Australian is an advantage in the market place for Australia’s manufacturers and producers. The Government should be seeking to strengthen this advantage by building greater consumer confidence into the labelling laws for ‘Made in Australia’ claims.”

 “It is Australian Made’s position that all food products should be required to carry a country of origin claim.”

 

China blocks NZ meat

Sheepmeat from New Zealand is being rejected at the Chinese border, potentially leaving thousands of tonnes of meat waiting at port or on the water.

According to stuff.co.nz, the ban is because of a name change on an export certificate, caused by the Ministry of Agriculture and Forestry being renamed the Ministry for Primary Industries, as part of an industry merger.

However, it's been said that the real reason for the ban, which is affecting every New Zealand meat company exporting to China, is to protect the Chinese pork and poultry industries.

The block first was first enforced at the end of April, but government officials were only informed on Monday of last week.

China is continuing to allow dairy products and beef hide imports into the country, despite the meat block.

Staff at the New Zealand embassy in Beijing are working with authorities to lift the ban, which could have long term implications for New Zealand's meat industry, said Meat Industry Association chief executive, Tim Ritchie.
"If it’s not sorted out very quickly it will be very serious," he said.

 

Dip in dollar benefits grain and dairy farmers

Australian farmers have received a flow-through benefit from the global decline in commodity markets and a reduction in value of the Aussie dollar against the greenback.

The Australian dollar slumped below parity at US98 cents earlier this week due to various reasons including a strengthen US economy and a potential end to the soft and mineral commodities boom according The Land.

The reduction in the Aussie dollar has helped to soften the blow of lower grain prices this week resulting in additional earnings of $5 per tonne to approximately $283.

Commodities giant, Cargill said that the decline in the dollar is welcome news for farmers as it is making farm exports more competitive.

“The dollar’s decline is good news for grain growers – our wheat is sold in US dollars and our prices are strengthening slightly,” said Peter McBride, corporate affairs director for Cargill.

“Global production forecasts suggest it is going to be a big production year so any exchange rate advantage for Australian exports will be helpful.”

Dairy Australia said that that drop in the dollar would also potentially see a rise in 2.2 cents per litre for dairy farmers in the export market should the dollar stabilize at the current level.

Charlie McElhone, Dairy Australia’s trade and industry strategy manager said that better returns from favourably priced dairy export values partnered with increased global demand, would flow through to lift the domestic milk market.

“But we’ve still got some pretty strong competition in the trade from places like New Zealand which has the advantage of its free trade agreement with China and will likey benefit generally from a dollar devaluation too,” McElhone said.

National Farmers Federation economics and trade manager, Tony Mahar, cautioned farmers not to get too optimistic as the dollar is still at a relatively high level for exporters, and could potentially rise again in the future.

“It’s hard to get economists to agree on what will happen, but it seems unlikely to be moving much bleow parity – certainly not back to the US70c region,” he said.  

 

Dollar’s slide must continue, says food manufacturers

Food manufacturers across the country breathed a collective sigh of relief on Friday when, for the first time in almost a year, the dollar fell below parity against the greenback.

But that doesn't mean the troubles are behind manufacturers, who are arguing that the dollar needs to fall much further to fight off the wave of cheap imports threatening homegrown brands.

According to the Australian, Gary Dawson, chief executive at the Australian Food and Grocery Council (AFGC), said the dollar needs to fall closer to US76c.

"There's no doubt the high dollar has a significantly negative effect on the competitiveness of food manufacturing in Australia, so the recent falls are welcome. But it would need to move lower for longer to start having some impact," he said.

A spokesperson from Ferrier Hodgson, the administrators for Rosella, which collapsed late last year, said the high Aussie dollar had caused supermarkets to look towards imported private label products, but said even if the dollar had dropped by 10 percent it probably wouldn't have been enough to save the brand.

Coca-Cola Amatil also entered into the debate, claiming cheap imported tinned fruits contributed to the recent struggles of its SPC Ardmona brand, which has suffered a nine percent drop in first-half earnings.

However, managing director Terry Davis said the dollar's slide will make some imported goods more expensive.

"The softening of the Australian dollar against the euro is better news as this will help inflate the prices of the very cheap imported fruit and tomatoes coming in from European markets which have been flooding our domestic markets," he said.

 

Fruit growers urge consumers to buy local

Australia’s peak body for the apple and pear sector, Apple and Pear Australia, is encouraging consumers to support Australian growers by choosing local products over imported at the checkout.

Managing director of the industry body, John Durham is urging consumers to help secure a future for the Aussie industry by showing loyalty towards local producers.

“We produce food in this country to the highest standard in the world,” he told ABC Rural.

“Australian consumers need to recognise that and be prepared to pay a little bit more for it, because the alternative is to buy imported product.”

Durham said that Australia has very high food safety standards and these standards are not necessarily uniform in other countries.

“We don’t know what food safety standards apply to the production of that food, but we’re happy to buy it because it’s discounted by 10, 20 or 30 percent.

His comments have come as struggling producers in the Goulburn Valley region of Victoria prepare to rally today for support in the wake of SPC Ardmona’s decision last month to stop taking produce from local producers in favour of imported produce.

 

Restructure packages urgently needed for SPC growers

As SPC Ardmona’s decision to no longer purchase fruit from growers in Victoria’s Goulburn Valley comes into effect today, pressure is mounting for the federal government to offer farmers restructure packages.

60 orchardists from the region who will no longer receive income from SPC Armdona say that they need more than low interest loans offered by the government.

The former contractors have requested a restructure package inclusive of exit grants and funds for the removal of trees according to ABC Rural.

Growers fear that failure to deliver such a package would make it impossible to maintain orchard hygiene, resulting in the attraction of pests and diseases to remaining viable growers.

John Wilson, general manager of Fruit Growers Victoria has urged the government to pull through with financial assistance immediately as the farmers no longer have cash flow.

“They’re subject to an economic earthquake. Some of them are left standing, some of them aren’t going to be left standing,” he said.

SPC Ardomda made an urgent request to the federal government asking for special protection safeguards including emergency tax on imports, a measure which is permissible under World Trade Organisation rules.

The rules allow a government to intervene when a domestic industry is under threat by a rise in imports.

 

Coles and Woolies call for review on multinational profit margins

Retailers say multinational grocery companies are enjoying excessive profits by charging local Aussie retailers more than their international peers.

According to the Financial Review, Coles and Woolworths are preparing to take on suppliers in an effort to lower the price of internationally-branded groceries, as the industry closes in on a code of conduct aimed at fairer terms for manufacturers.

The retail price of identical grocery items such as painkillers and toothpaste in the United Kingdom and United States are at times lower than wholesale prices in Australia, according to the two supermarket giants.

Coles has called for an independent analysis of wholesale pricing on the basis that local and overseas prices differ so greatly that they cannot be blamed solely on distance, higher costs and the size of the Aussie market.

“Suppliers’ profit margins are certainly higher than retail margins and in many cases the prices on key products in many categories are higher than they are overseas,” said Coles spokesman, Robert Hadler.

“There are some obvious reasons why prices would be different, but some of the price differentials are so large you have to question whether geography and the cost of production in Australia are the sole determinants of the big pricing differences. It’s fair to have that discussion and to have an independent review of that without jumping to conclusions.”

Head of communications for Woolworths, Claire Kimball, also believes that the difference in prices needs to be reviewed.

“The difference in wholesale pricing on packaged goods between Australia and developed markets is one area that needs greater focus and increased transparency from the global suppliers,” she said.

Gary Dawson, chairman for the Australian Food and Grocery Council believes that the attack on suppliers by the retail giants is an attempt to divert attention away from current investigations of both companies by the ACCC, into allegation of misuse of power.

Dawson said that an analysis by Macquarie Equities and UBS refuted the claims by pointing out that over the past five years, suppliers’ margins had in fact been lower.

“(Suppliers’) gross margins have fallen over the last few years and there’s been a six percent margin transfer from suppliers to retailers. Supplier margins in Australia are well below their international peers.”

The Macquarie report found that suppliers’ gross margins on average fell by 15 to 37 percent between 2006 and 2011 and the UBS report found that Australian EBIT margins for multinational grocery suppliers were approximately 210 basis points lower than international averages.

Macquarie has said that the true level of profitability is difficult to estimate due to transfer pricing by suppliers who do not manufacture goods in Australia and differences such as cost of labour, population density and distance need to be taken into account.

Dawson does not believe that the renewed debate over supplier margins and grocery prices will be likely to impact on negotiations over the code of conduct.

“The negotiations have not been about price or margins but contractual certainty, along with issues like vertical integration and dispute regulations,” he said. 

 

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