We source most of our fresh produce locally: Woolworths

Woolworths has unveiled a new advertising campaign, intended to inform consumers that contrary to widely-held opinion, it actually sources 96 per cent of its fresh produce from Australia.

Most consumers believe half or less of fresh meat sold in Australian supermarkets is locally grown, but Woolworths says all of it is.

Consumers are also increasingly aware of the freshness of products by the time it gets to their shopping trolley.

"There is little doubt that supermarkets can be doing a better job in informing customers about who we are and how we are able to deliver the best fresh food in the country,” managing director of Woolworths supermarket and petrol division, Tjeerd Jegen said.

“That's why Woolworths is embarking on a multi-million dollar brand and consumer awareness campaign.

"As Australia's iconic fresh food retailer we are reaching out to customers. We have a responsibility as Australia's largest national supermarket to better explain to customers where their food comes from and to improve their shopping experience."

The slight change to Woolworths’ Fresh Food People slogan is sure to be met with some scepticism though, as produce growers still struggle to make ends meet.

The new advertising and branding campaign marks "a fresh promise to our customers" to be 'Australia's fresh food people,’ the company said.

 

Family farms won’t survive and it’s not all Coles and Woollies fault: AIP National Conference

The 2012 Australian Institute of Packaging (AIP) Conference has kicked of in Queensland, and food and packaging experts have already shared their thoughts on the future of the Australian industry.

Tom Schneider, President of the World Packaging Organisation began his address to the audience by saying Australians are “very much like Texans, you meet people well and you enjoy people.”

Terry O’Brien, Managing Director, Simplot had some more controversial comments on the state of the industry and what producers and companies need to dot o stay afloat.

“People keep saying things like ‘If we could just legislate against Coles and Woolworths and stop them bullying companies,  it would fix everything.,’ but I don’t think that’s necessarily true.

These retailers take roughly 33 per cent of profit out of the chain; globally, the level is about 25 per cent, so it is higher.

“Woolworths is the second highest profit margin maker behind Walmart.

“The fact that Woolworths is so successful isn’t a fluke, they have worked hard over a number of years and they aren’t stopping.

“And they’re looking for further profit.”

O’Brien shared his view that the rapidly changing food and packaging supply industries will continue to push producers and manufacturers to innovate and improve their business models.

“The press has had a lot of fun with the retailers and the food industry taking shots at each other over these kinds of statistics, rather than getting them together at a table to discuss the issues.

"The AFGC [Australian Food and Grocery Council] has started doing that and some kind of truce has been called.

“There is a responsibility for Coles and Woollies, given their size, for them to respect suppliers.

“When they make decisions to D-list people, they have to understand the impact of that. 

“I think they do understand, but they have to communicate those through the organisation. 

“They’re not the pseudo protectors for companies in Australia, so if you’re  sitting in a company that’s not looking bright, and is not innovating, the future is not bright for you in Australia.

When questioned about yesterday’s news that Woolworths chief Grant O’Brien has extended an olive branch to manufacturers and suppliers to develop an independent body to oversee dialogue between the major supermarkets and suppliers, O’Brien (Terry, who assures there is no family connection) was cautiously optimistic.

“Things are usually settled much better sitting around table than in all out warfare,” he said.

“How far and how deep into issues they would go, I don’t know.

“What he has offered so far is not going to the heart of the issues we have, so we need more discussions about that.”

He said not everything can be blamed on the major supermarkets, and that companies and suppliers cannot expect to continue doing business exactly ads they have done for decades.

“You have to make yourself a corporation rather than a family farm system,” he said.

“I love farmers, I spend a lot of time with them and I wish the model could stay where it is to make money, but unfortunately that won’t be the case.

“Regional areas are going to suffer.”

“No matter which way you cut it, we’re too expensive.

“There’s been a lot of talk about cheap imports, but when I’ve travelled the world, I’ve found that is the normal price, and we pay too much.

“It just costs too much to produce things in Australia, and it comes down to our standard of living.

“We expect to be able to support the standard of living we have, people are widespread geographically and people demand wage increases and things like that.

“But nobody tries to be better than average because average gets them paid.

“We have to be very efficient, and chase constant productivity improvements.”

O’Brien said the increased union activity of late is not beneficial to the industry, nor is the changed attitude to redundancies and retirement.

“The re-energised union movement in Australia is not helping,” he said.

“I’ve always been a supporter of unions, but I’m really pissed off with them now and I think they’re chasing people offshore now.

“And redundancies are just such a big nest egg, people now would love to walk out the door at retirement with a redundancy payment.

“How do you unwind this sort of thing?

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

World food prices drop to 8-month low

World food prices dropped to their lowest level in eight months, according to a U.N. Agency.

In the U.N. Food and Agriculture Organization’s monthly report, it said food commodities fell by four per cent in May, as fluctuations in currencies and supplies continue to impact the industry.

The agency, based in Rome, monitors food prices closely, largely because it has observed increases in staple foods lead to violence in some countries in recent years.

In September, Foreign Minister Kevin Rudd has said wars and political uproar could become a reality if Western counties don’t address global food security.

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.

 

 

Reliance on transported foods could leave entire towns starving: govt report

A new report from the federal government has found that Australia’s growing reliance on foods transported long distances could be deadly in the case of natural disasters or other crises.

The Resilience in the Australian Food Supply Chain report, by the Department of Agriculture, found that the increasing dependence on perishables including milk and produce being transported thousands of kilometres would spell disaster, particularly for smaller towns, if a disaster occurred.

''The key question is whether, following a natural disaster or other major disruptive event, Australians in affected regions would go hungry,” the report says.

“The risk that this could happen is growing, especially if separate events in Australia's eastern states were to coincide.”

Over 75,000 truck trips are conducted each week across Australia to deliver more than 40 million cases of food, which is then sold from about 80,000 retail outlets including supermarkets, shops and restaurants.

Late last month the Transport Workers Union (TWU) accused Coles and Woolworths of contributing to road deaths by placing unrealistic demands on truck drivers, and the DAFF report also pointed to the increasingly complicated distribution networks created by the supermarkets as a contributing factor in the potentially dangerous situation.

''Longer supply chains expose transport routes to more points of potential vulnerability from such events as flood, fire and earthquake,'' the report states.

The Queensland floods in late 2010 and early 2011 highlighted some of the major issues with the current supply chain, with Rockhampton cut off by road, rail and air for more than two weeks and Brisbane coming within one day of running out of bread completely.

While nobody starved during the floods, it did highlight the potential risk of larger disasters, or more than one occurring at the same time.

If the Queensland floods had occurred at the same time as the bushfires of 2009, it would have been impossible for food to be delivered to far north Queensland, the report found.

As global warming increases, weather extremities increase and it becomes almost impossible to predict seasons, the possibility of two such disasters occurring simultaneously, or close enough to, is not unrealistic.

''If we had multiple emergency experiences happening around the same time – flood in Queensland, fire events in Victoria and another event in, say, South Australia – then the national system would struggle.,” Department of Agriculture Assistant Secretary Allen Grant told the current Senate inquiry into food processing.

Last week it was revealed the one in four products currently sold in Australia’s major supermarkets is private label and of those, one in two is imported.

The reliance on imports and lower quality foods to reduce costs in the cut-throat supermarket price war has led to countless Australian farmers, growers, processors and manufacturers being pushed out of work, but the current Senate Inquiry is struggling to get anyone to publically criticise the big two, for fear of punishment.

The departing chief executive of the Winemakers Federation of Australia, who would only speak out because he was leaving the representative body, came out swinging over the weekend, saying the supermarkets are also bullying winemakers, as well as food producers.

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?

FSANZ recalls yeast products over salmonellosis concerns

Australia’s food safety watchdog has issued a warning to food businesses not to use two direct order yeast products.

Food Standards Australia New Zealand (FSANZ) has warned that the Tempeh Starter Yeast and Super Starter Yeast have been recalled over cases of salmobellosis in the products in the US.

Tempeh, a fermented bean product, is made with the recalled yeast products.

Symptoms if salmonellosis include severe headache, high fever, vomiting, nausea, abdominal pain and diarrhoea.

The foodborne illness is more dangerous in young children, the elderly and those with weakened immune systems.

The products of concern have been distributed to Australia via direct mail order or online by a US-based company, IndonesianFoodMart.com.

The company distributes the products globally.

The products were sold in sealed, clear plastic packages that bear a small computer printed label of 30gm, 50gm, 250gm and 1000gm’s.

The recall applies to all batches and sizes of the two recalled products.

FSANZ advises that anyone who may have purchased these products not to use them and to discard them. 

Anyone who is concerned they may have used or consumed the products are advised to seek medical advice.

Image: HACCP Food

Latest animal export exposé reminds us to steer clear of factory farm

It has once again been left to an advocacy group, Animals Australia, to highlight the cruel practices involved in cattle slaughter in Indonesia. Under new rules put in place by the Federal Department of Agriculture following last year’s exposé, exporters must employ auditors to monitor the slaughter. However, recently released footage shows that some of these auditors either did not detect the clear mistreatment of cattle or they failed to act.

Now that the issues have been highlighted by the advocacy group, the department has recommended disciplinary action for the two exporting companies involved. This has prompted claims by the live exporters that the system is working.

It is correct that the new system has allowed the suppliers to be identified and disciplined once the abuse was revealed, which was not possible before the new regulations. However, the failure to detect problems is concerning. It brings into question whether auditors paid for by exporters can be impartial.

My research group has recently identified that scientists reporting of animal welfare research is influenced by the funding of the research (see page 25). So if scientists, why not auditors?

This recent episode demonstrates that the effectiveness of the auditors in ensuring the welfare of the animals depends not only on their willingness to report incidents, but also on the standards they are given to implement. The World Health Organisation standards do not mandate some practices – such as stunning – that are essential for good welfare, so it is unlikely that they will satisfy Australian consumers.

The welfare of live export animals can be inadequate at many different stages in the export process, not only at slaughter. Mustering cattle, trucking them long distances, loading them onto a ship, rough sea journeys, high temperatures and accumulation of ammonia on ship are just some of the hazardous components of the journey.

 

Export exposes animals to several different stresses, and they may accumulate. AAP

 

The animal’s resistance to stress can become weakened after a long period of transport, and the new and strange experiences that they have. However, it is the cumulative effect of multiple stresses that is often forgotten. Evaluated individually each one may be acceptable, but together they may represent hardship that the cattle are unable to bear.

Australian meat consumers generally have a good impression of cattle production systems here. The freedom to roam and a natural system of feeding on pasture are just two of the advantages that are important for welfare. Intensifying the system by feedlotting and prolonged transport to slaughter could damage that image. Live export cattle are shipped in large numbers in unnatural conditions, ending up in feedlots or an abattoir, all far from the community perspective of cattle happily grazing in paddocks.

Over the nine thousand years that we have managed cattle, they have become docile animals. They have developed a willingness to accept a range of conditions, even if they are not conducive to good welfare.

Our willingness to accept poor welfare standards is largely driven by how much we can afford to spend on our animals. When one of the richest countries in the world, Australia, exports animals alive to one of the poorest, Indonesia, it is likely that the change in standards will cause issues with the Australian community. We must safeguard the natural image that Australians have of cattle production in this country, because if it becomes tarnished with the factory farming brush consumers will turn away from the products.

Intensification of cattle farming systems is progressing rapidly overseas. Having just returned from looking at new housing systems for cattle in Estonia, it is clear that the globally increasing demand for milk and beef is encouraging an unprecedented growth in the scale of individual enterprises that is often at the expense of the animal’s welfare.

 

Maintaining the integrity of Australian cattle farming is important for producers too – consumers demand good conditions. AAP

 

Eastern European countries became accustomed to industrial scale farms during the Communist era. Now new dairies are being established, each with several thousand cows. There is no support for small farming systems, like those common in Western Europe. Cows are never allowed onto pasture and are loose housed in barns, where they used to be tethered. They are milked by robots and live on wet concrete covered in excreta. This, together with being offered only small concrete cubicles with little bedding to lie down in, increases lameness and mastitis, which are two of the biggest causes of wastage of dairy cows.

Diets that promote high milk yields take their toll all too quickly. On average cows only last 2.5 years in the milking herd, which together with the two year rearing period offers cows a pitifully short lifespan compared with their natural lifespan of 20-25 years.

Some Western European countries are attempting to control the intensification of cattle production systems, knowing that they have consumer support. In Sweden and Finland cows have to be out at pasture during summer. If cows are given a choice, farmers find that in all but the most inclement of weather they opt to spend their time outside.

The treatment of cattle solely as a means to make money, whether by exporting them to Indonesia or keeping them in milk producing factories, ignores the fact that they are sentient beings. They are capable of all of the major emotions that we experience: fear, anxiety, depression, frustration, anger, love, hatred. The caring relationship of the cattle producer for the animals in his herd can be diminished by intensive systems, because there is little contact with the animals.

Industrialisation of cattle production systems to generate wealth is likely to ultimately lead to their failure. Competition from alternatives has never been stronger, and the ethical and environmental implications of industrialisation of cattle production are considerable. Tasmania, and many other states and countries worldwide, have realised that consumers will not support industrial scale agriculture that does not afford high welfare to animals, as they outlaw the battery farming of chickens and keeping of sows in stalls. Surely we should treat cattle with the dignity that they deserve, which is more than just being a means of making money?

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

The impact of the falling Aussie dollar on food producers

The Australian dollar dipped below parity overnight, creating a hopeful Australian food industry which may now have a fighting chance with exports and production.

The high Australian dollar has been blamed for a myriad of factory closures, company takeovers and a slump in food exports, as local producers struggles to compete with other countries.

As fear of Greece exiting the eurozone continue to increase, investors are shifting money to the more secure US and Japanese markets.

One of the industries most affected by the high Australian dollar’s impact on trade is agriculture, so farmers have welcomed the fall.

National Farmers Federation's general manager of policy, Charles McElhorn, told the ABC the impact that the high Aussie dollar has on the sector is larger than most people realise.

"We export about two-thirds of what we produce, and we're also increasingly exposed on the import market, so great news," he said.

Every one per cent fall in the Australian dollar equates to about $220 million in export earnings, according to the federation.

This will mean an additional income of about $2 billion for the sector since the dollar started falling a around March.

AusVeg spokesperson  William Churchill told Food Magazine the produce industry will welcome the news, but other industries do reap greater benefits.

“Some companies have a real export focus, some sell up to 90 per cent of their products offshore, and with a high Australian dollar they were definitely finding it harder to it overseas.

“Some is going into the domestic market, and in some instances they have been able to do that, but the Australian produce market is highly saturated right now so there is no demand for any extra.

“There won’t be any increased demand until people start to eat more [vegetables], but they aren’t doing that.

“As the dollar falls, it becomes easier to send that produce overseas.”

Churchill said that while producers are being urged to export as much as possible, the highest demand is not for Australian vegetables.

“Growers who are exporting have a bit less stress in their life [with a lower Australian dollar], however, as for export, there is a lot of rhetoric we’re getting, particularly from governments, that we can be the Asian foodbowl for the booming middle class.

“That’s great if you’re a beef producer, but historically the food of those people is actually vegetables.

“Now they can afford a high protein diet like we do in Australia.

“They may have had diet consisting of rice and veg and now they might include meat, so the amount of vegetables will decrease per person, but as we now have 100 million more people who can buy vegetables, the entire volume will hopefully increase.

“I definitely echo, reiterate and support export is a way to go because in this country we have a saturated produce market and out consumption is so small compared to others in world.

“It’s frustrating when politicians get up and say “we can do such and such” when they don’t actually have all the information, and their figures are actually very distorted.

“If the government is serious about making this the Asian century and exporting, they need to actually talk to with largest market out there.”

Prime Minister Julia Gillard made the announcement that Australian farmers and food producers should focus on becoming the foodbowl for the rising Asian middle class last week, but her comments were met with criticism from the industry who say current policies are killing their businesses, not helping them.

The food manufacturing sector was also overlooked in the Federal Budget released last week.

The industry has been calling for a helping hand like the one given to the car manufacturing industry, and a Supermarket Ombudsman to help keep Australian companies in business, but these requests were ignored. 

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.

 

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.

Good culture: how the rise in yoghurt consumption is helping Aussie farmers

Yoghurt is one of the fastest-growing food categories in Australia, and the increased consumption is not only improving health, it's helping Aussie farmers.

Whether its health consciousness on the part of consumers, or the range of flavours and types that manufacturers are producing, the rise in popularity cannot be ignored.

A mere few years ago, the Greek yoghurt category was almost non-existent in the Australian market, but the current demand is something that is not being ignored by manufacturers.

As dairy farmers struggle to survive the milk price wars and more dairy products become private-label domain, yoghurt and in particular, Greek yoghurt, is offering Aussie dairy farmers some hope.

“Greek yoghurt uses about triple the amount of milk compared to other yoghurts and the hope and expectation is that this will change the local milk consumption drastically,” Peter Meek, Managing Director for Bead Foods, which is launching Chobani Greek yoghurt in the Australian market, told Food Magazine.

Since launching Chobani in the US five years ago, the consumption of Greek yoghurt has risen dramatically, and Meek anticipates a similar story in Australia.

“There really wasn’t a Greek yoghurt category back in 2007, there were a couple of small niche players and then Chobani came along and almost created the mainstream category,” he explained.

“It’s gone from one per cent of the total yoghurt market to about a third of the market in five years.

“In Australia the greater yoghurt segment is not tracked by retailers, but based on our estimations, we think [Greek yoghurt] is about 15 per cent of the market, and it has seen strong growth in the last few years, mostly the plain variety because people like to add it to cooking and other things.”

Back to basics

The difference is the way the yoghurt is made, which takes on an old-fashioned, traditional approach to making Greek yoghurt, which Meek believes is the main reason it has been so widely adopted in the US and will also be in Australia.

“I think firstly because almost all of it is natural and organic and properly strained. We call ours ‘Greek yoghurt,” not ‘Greek-style” because we strain our yoghurt and it takes three litres of milk to make one litre of our Greek yoghurt,” he told Food Magazine.

“The standard Greek yoghurt available in Australia is 10 per cent fat because it is just full cream milk with cream added and then it is fermented.

“But we start with lots of skim milk, we strain it and remove the fat, which makes it incredibly thick and creamy naturally because there are tons and tons of proteins in there.

“I think the health and wellness trend is growing and consumers are looking for products that are authentic.

“Our yoghurt is milk and cultures, what we don’t use is the stuff consumers are saying they don’t want: gelatines and thickeners and artificial additives.

Chobani has invested $20 million into building what Meek describes as “basically a whole new factory alongside our existing [Gippsland] one,” to make the Greek yoghurt locally.

“We’re putting in a whole processing plant to make the base yoghurt, as well as new filling lines, warehousing and storage capacity to store and ship,” he explained to Food Magazine.

“In the process, we’re also recruiting people for the development and there will be about 25 more peopled when it’s up and running, so we will have an impact on the wider community with employment too.

Milking the dairy industry

“The hope and expectation is that this will change the local milk consumption drastically.

“We currently source all Gippsland dairy from Victoria, so we’re already buying that and once we start making Chobani locally, we will obviously increase the amount we’re buying dramatically.”

“Anything that uses local milk has got to be a great thing.

“One reason we will make the milk here is that we will have access to a wonderful quality of milk.”

When Food Magazine asked Meek for his take on the supermarket price wars and its impact on the dairy industry, he was hesitant to comment.

“It’s a very complicated issue and I don’t have all the information on it,” he said.

“All I know is that for my business to be successful, I need a viable farming community behind me anything that will support that, I am definitely in favour of.”

Dairy farming second worst job in the world

This month, a US survey rated dairy farming as the second worst job you can have.

The findings of the American survey might not come as a surprise to most Australian dairy farmers, who are facing a slump in profits as the major supermarkets continue to sell milk for $1 per litre, despite a Senate Inquiry and an investigation by the Australian Competition and Consumer Commission into what the industry calls “unsustainable”prices.

Australian Dairy Association president Chris Griffin told Food Magazine earlier this year that farmers are leaving the industry in droves because they cannot manage to make a profit, or in many cases, break even.

“We know there’s been at least 30 leave the industry in Queensland alone, and the majority are sighting the uncertainty of milk prices as the reason,” he said.

Following the intense debate about the cost cutting by Coles and Woolworths and the ruling that $1 per litre was acceptable Food Magazine asked Griffin if the chances of the big two supermarkets increasing the price of milk to help with the increase in farmers’ costs would most likely be slim.

“That’s a question for Coles,” he said.

“We believe the tactic all along by Coles was just to get people through its doors, and since dairy products are in 97 per cent of consumers homes, it’s a draw card they’ve used.

“It’s always at the back end of the supermarket, so you have to walk through all the other products and displays to get to it, so it is simply a marketing ploy they’ve implemented at the expense of the dairy industry.”

When contacted by Food Magazine to find out if they would consider absorbing the cost increase, Jim Cooper from Coles said "we are not speculating about the potential impact the carbon tax will have on retail pricing."

The only profession deemed to be worse than dairy farming is being a lumberjack, according to the results collated by American HR group, CareerCast’s.

The five key categories were used to determine the best and worst jobs were physical demands, work environment, income, stress and hiring outlook.

The importance of five

With Greek yoghurt going from strength to strength, one may wonder whether there is any room left in the market for more mainstream varieties. And the answer is ‘yes there is.’

So much so, that from a big idea became an even bigger development for an entrepreneur and his yoghurt brand, which had a buyer before he even had a working factory.

David Prior has a unique take on the adage ‘make the most out of your day’.

Having started his day at five o’clock in the morning for over a decade, Prior treasures this moment each morning where he feels he can pause and create his day.

It was this philosophy that fuelled Prior to capture what he calls this ‘five:am-ness,’ and bottle it.

And so, the five:am organic yoghurt brand was born, but Prior also wanted to ensure his operation was environmentally sustainable.

At this stage of pipe dreams and grand ideas, the unimaginable happened: a major Australian supermarket decided to buy his product.

Only problem was, they wanted it by March 2011 – just eight months later – and at this stage Prior didn’t even have any equipment, let along a sustainable manufacturing operation.

“When the contract was signed to produce and distribute our yoghurt within an eight month timeframe, all we had was a 35,000 square foot site located just south of Melbourne, Victoria,” explained Prior.

“Our site had no manufacturing system in place, inadequate air flow and water supply, and none of the technology needed to produce organic yoghurt.”

Despite the short time frame, Prior did not want to sacrifice the environmentally sustainable factory he had dreamed of for his yoghurt brand.

In May 2010, five:am engaged Process Partners, a specialist dairy engineering and process improvement group, to help manage and execute the project, who conducted a detailed audit of five:am’s requirements, taking into account its need to produce more variations of the product than was initially required to meet its March 2011 distribution deadline.

From this, they developed a manufacturing strategy for the plant and evolved the strategy based on budget and business objectives.

Process Partners joined forces with Schneider Electric to provide a full suite of automation and control technology in the small timeframe.

“Nobody can believe how quickly we got it up and going,” Craig Roseman, Schneider Electric’s food and beverage specialist, told Food Magazine.

He agreed that the focus on health has opened up doors for more players in the yoghurt category, including Prior.

“I guess why there has been such an increase in the market in Australia versus the UK is that our consumption per capita is less than them so there was always scope to increase it.

“There is definitely a trend towards more wholesome foods and yoghurt is one example of that.

The milk used in five:am’s yoghurt is an important part of it’s organic processing, which Roseman said is sourced from a farm in Victoria.

“It is a certified organic farm, and it went through rigorous process to get it that certification,” he said.

Roseman told Food Magazine that while the supermarket duopoly is impacting the market, the yoghurt sector is proving to be a hopeful case.

“I guess we have, apart from the independents, a strong duopoly between Coles and Woolworths so they are always going to have pretty strong market power and I think basically having market power means they can dictate a lot about what they want.

“There is that element of end users, some are more susceptible to that [supermarket power], while some can push back a little.

“I certainly agree that it’s not conducive to a healthy local sector in the long run, it is going to put strain on the businesses that are already struggling.

“We’re not that different to ‘a dollar a litre’ farmers, a lot of our business is cut out or improved on too.

“Fortunately the yoghurt sector is one of the few dairy derivatives that is not home branded to the extent that milk and cheese.

“The profit is driven out for manufacturers when a category becomes dominated by private label, but yoghurt has somehow managed to stay strong.”

 

 

 

 

 

 

 

 

Coles to source all frozen veg products from Australia

Supermarket giant Coles has announced that from this month all its private label frozen vegetable products will be grown and packed in Australia.

The vegetable products will be sourced from Aussie farmers and packed by Australian based food processor, Simplot.

Last month Callum Elder, executive general manager of Simplot, discussed the difficulties for food companies trying to stay afloat in Australia.

''Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you're unable to properly plan,'' he told the Sydney Morning Herald.

''Our productivity hasn't increased in the past three to four years, as an industry, but yet we've been paying 3 to 4 per cent increases [in wages], which is a large part of the cost.

“It's very expensive to put people into Australian factories.''

Coles merchandise director John Durkan said the latest decision by Coles will make it the only Australia’s supermarket private label to offer 100 per cent Australian-grown frozen vegetables.

Coles’ total sales of frozen vegetables is almost $200 million each year, and the  private label range accounts for about 20 per cent of  that; more than $40 million annually.

“At a time when most other frozen vegetable brands are being sourced from overseas, we’re very pleased that, through our partnership with Simplot, we’ve been able to continue supporting Australian vegetable growers,” Durkan said.

More than 90 per cent of Coles’ private label frozen vegetable products is sourced from Tasmanian vegetable growers.

This represents over $37 million in sales for the supermarket, which growers will no doubt be hoping will be filtered down to their operations.

Simplot Australia’s Executive General Manager of Retail, Graham Dugdale has welcomed the supermarket’s decision.

“While other frozen vegetable suppliers have moved their sourcing and manufacturing off shore, Simplot Australia has continued to invest in relationships with the Australian farming community and factory capability, and is now the last remaining frozen vegetable manufacturer in Australia.

“Our strategic relationship with Coles gives consumers the choice to purchase Australian grown frozen vegetables from both ‘Birds Eye’ and Coles brand.”

 

Federal Budget 2012: Did the government forget the food sector?

The Gillard government has left the food processing industry reeling with its Federal Budget, channelling little money to the sector and ignoring calls for a Supermarket Ombudsman.

Farming groups have slammed Prime Minister Julia Gillard’s declaration that Australia can be a ‘foodbowl’ for Asia, saying current policies are killing their businesses, not helping them.

Despite the fact that hundreds of workers in the food processing sector have lost their jobs in the last two years as SPC Ardmona, McCain, Heinz and National Foods, amongst others, close their doors or scale back their businesses, Gillard announced earlier this week that the future for Australian food should be in export.

The high Australian dollar, supermarket price wars and lack of new recruits in the sector are making it impossible for food manufacturers to make a profit, or in many cases even break even.

Dairy, produce industries in trouble

The infamous milk price wars is leading dairy farmers to leave the industry in droves, and with the average age of an Aussie farmer about 65 and no new workers coming through the ranks, the future of the farming sector looks dire.

With the dairy industry still reeling, Coles slashed the price of produce in half in Fenruary 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.

When asked whether the price cuts shows a lack of knowledge or respect for growers from Coles, Coburn said that will be determined by Coles’ behavior going forward.

“It depends on how these costs will be set up,” he said.

“If they absorb the costs within their own structures, it could be good, but if it is going to be passed onto growers, which it probably will, it shows mass disrespect to growers.

Murray-Darling Basin impacts

Australian Dairy Farmers Association Chris Griffin voiced similar concerns about the impact of the supermarket when he spoke to Food Magazine in the same month, saying the dairy industry is not only losing workers, but will be further damaged by the carbon tax and Murray-Darling Basin plan.

“The carbon tax will also cause problems when it’s implemented on the 1st of July; we’ve done work to find the costs that will be incurred and they are largely electrical costs,” he said.

“The average increase for dairy operation will be between $5000- $7000, and that will be an overall direct increase in cost that will have to be passed on somewhere.”

The cost increase cause by the carbon tax will have to be absorbed by the farmers in the milk export market, Griffin told Food Magazine.

“It will have to be absorbed by the farmer because our price is governed by a royal export set price.

“Australia has come out ahead of the game in a way with implementing the carbon tax, but farmers can’t go to their overseas customers and saying ‘we need extra money because Julia has put on a carbon tax,’ the customers would just go elsewhere.”

The Murray Darling Basin plan, which is tipped to see farmers sell 2750 gigalitres of water back to the Government, will mean less water available for the same number of farmers in the region, Griffin explained.

“Given that the government has a national food plan they’re trying to roll out and we believe the dairy industry is a massive part of that, we would like to consult with them about the plan,” he said.

“Australia has been very fortunate that we have been able to produce enough dairy products not only for domestic consumption, but also for export, which then generates wealth for the country.

“This plan is going to jeopardise that.”

“At this stage we say a certain amount of water has been taken out already and we need to have a strategic look, working with the government to see where it is going to come from in the future rather than using the ‘Swiss cheese approach’ currently being used.

“It means less water for the same amount of farmers, and maintenance costs will be higher because there are not as many people contributing to the maintenance.”

National Irrigators' Council chief executive Tom Chesson said if the Gillard government wants to feed the Asian middle class, it will need to ensure "water to produce food,” and  “unless government gets its act together, we won't have a food processing industry left.”

Declining produce output

AusVeg chief executive Richard Mulcahy voiced similar concerns about the government’s view of exporting to Asia, saying there simply isn’t enough.

"Only 7.7 per cent of our ]vegetable] production goes offshore,” he said.

“We need to address that before coming up with ambitious plans about feeding hundreds of millions of people in Asia.”

In the last two years fruit and vegetable exports have declined $200 million to $497 million.

The Federal Budget, announced this morning, revealed funding for the Murray-Darling Basin will be reduced, and the Commonwealth Environmental Water Office, which manages the government’s water rights, will be slashed by $13.2 million over the next seven years.

The Caring for our Country program, which aims to improve biodiversity and sustainable farming, which many feared would be cut in Wayne Swan’s budget, was retained.

A further $2.2 billion will be invested into the program’s second phase, to run until 2018.

Part of the money will concentrate on ensuring the health and sustainability of the Great Barrier Reef, which will get an extra $12.5 million over four years to fund research on the impact of climate change and how to deal with global warming.

Over six years, $58 million will be delivered to develop and maintain marine reserves to protect oceans surrounding Auustralia.

But submissions to the senate inquiry into food processing are painting a bleak picture for the rest of the industry, saying the sector is "going backwards at a rate of knots".

The Australian Food and Grocery Council has also been lefty disappointed by the Budget, after calls for funding for a Supermarket Ombudsman were not delivered on by the government.

The AFGC wants an Ombudsman to oversee the anti-competitive and bullying behaviour of the major supermarkets to ensure a future for Australia’s food sector.

Sales of fair trade certified products still rising

Sales of products carrying the Fair Trade Certified logo have increased by almost 40 per cent, as consumers become more informed about work conditions for foreign workers.

Saturday marked the beginning of Fair Trade Fortnight, which aims to bring more awareness to the free trade cause.

Fairtrade Australia New Zealand (Fairtrade ANZ) said the increase in Fair Trade certified products in 2011 represents just over $165 million for the cause, which helps to ensure decent working conditions for employees.

In 2010, over AU$63.8 million in additional Fairtrade Premium payments were made globally to farmers for investment in growing their businesses, improving the quality of product and providing their communities with essential services such as healthcare and education.

Fairtrade ANZ chief executive Stephen Knapp said the growth shows Australian shoppers and businesses continue to believe every choice matters when it comes to giving farmers in developing countries a fair go.

 

“Whether it’s your morning coffee or the products your workplace uses for the office canteen, every choice matters,” Knapp said.

 

“Unlike any other third party certification system, Fairtrade works in partnership with small-scale farmers in developing countries to provide fairer prices, better terms of trade and additional funds for business and community development.

“Making a choice that matters and choosing Fairtrade is now easier than ever for Aussies shoppers with the number of Australian businesses licensed to sell products carrying the FAIRTRADE Mark rising by over 13% per cent to 220 and a range of Fairtrade Certified products now readily available on major supermarket shelves across the country,” he said.

Last year a number of large food brands started offering Fairtrade choices to Australian consumers including Starbucks and San Churro, which both now serve 100 per cent Fairtrade Certified espresso in their stores throughout the country.

Fairtrade Certified coffee on the supermarket shelves also continued to grow with brands including Republica, Oxfam, Global Café Direct and Grinders and Marco offering Fairtrade Certified and organic coffees.

“The choice of these businesses to support and offer Fairtrade Certified products is reflective of the continued demand by consumers who more than ever know that every choice matters, even in harder economic times,” Knapp said.

“Even in tough times Aussie shoppers understand the sense and importance of a fair go for all.

“They are continuing to make the choice to buy Fairtrade Certified products because they know they are making a choice that matters – one which makes a real difference to the lives of millions of farmers and their communities in some of the world’s poorest countries,” he said.

 

In October last year , a global poll has revealed  more Australians not only recognise the Fairtrade label, but are also actively looking for it when making purchases.

Of the 17 000 consumers Fairtrade surveyed from 24 different countries, over half said they believed buying certified free trade would help farmers in developing countries.

Over six in ten surveyed said they trust the Fairtrade Label and use it to make decisions.

Do you look for Fairtrade Certified products when shopping or eating out?

Soaring raw coffee prices predicted to drop in 2012

Raw coffee prices reached record highs in 2011, but increased production in Brazil will hopefully alleviate some of the pressure for buyers.

In coffee supplier Gilkatho’s annual survey, it found that last year had the most costly raw coffee prices, which then flows onto suppliers and retailers.

The Gilkatho Cappuccino Price Index (CPI), which has been conducted for the past decade by Gilkatho, which surveys over 900 cafes in Australian capital cities to understand the change in coffee prices over time.

Australian consumer coffee prices have risen over the past six months, the research found.

In Sydney the average price of a takeaway coffee has risen from $3.11 to $3.19 while Melbourne coffee drinkers have seen a similar change, with prices increasing 14 cents to $3.35 in the period.

However, there could be some evidence that the coffee beans themselves are not causing the price increase, but rather the cost of the takeaway cups they’re sold in.

The price of dine-in coffees has not changed in Sydney, Melbourne or Brisbane.

Gilkatho’s Managing Director, Wayne Fowler, said retailers are increasing the costs of items such as coffee to meet other rising costs in running the business.

 “The March CPI portrays a continuing trend of steady price increase reflecting the healthiness of the Australian coffee market as consumers appear willing to pay the increased costs.”

Following the record prices of raw coffee last year, Fowler is predicting a drop in prices in 2012 due to record production in Brazil.

He pointed towards countries including Kenya, which is producing high quality beans that it sells for lower prices into the international market.

Beef: It’s What’s for Dinner. And Detergent. And Explosives. And Floor Wax.

When a cow tested positive for mad cow disease in America for the first time since 2006, the USDA announced Tuesday.

Officials were quick to assure the public that the slaughtered former dairy cow was located at a rendering plant, and that its flesh was never going to enter the human food supply.

If you’re not going to eat a dead cow’s meat, what are you supposed to do with it?

Make pet food, floor wax, and explosives, among many other things. Rendering plants take animals or animal parts that are unsuitable for human consumption and separate them into two streams: fat and protein.

There are innumerable uses for those basic building blocks.

Most of the dry, proteinaceous matter is sprinkled onto livestock feed as a nutritional supplement.

(Cattle protein cannot be fed to other cattle due to concerns over mad cow disease, but farmers do feed it to other animals.)

As for the liquid fat and oil, some enters the livestock food chain along with the protein—it increases caloric content and reduces the dustiness of plain corn or soy feed.

A large portion of the liquids, however, are sold on to refineries that reduce them into chemicals to make crayons, shaving cream, detergent, and a long list of other products.

Glycerin, one of the many chemicals that can be derived from cow fat, is an ingredient in dynamite.*

In recent years, rendered cow fat has been increasingly used to make biofuels, and researchers are experimenting with adding animal byproducts to concrete and plastics.

Americans produce an astonishing quantity of cow leftovers. U.S. slaughterhouses kill more than 34 million cattle annually, with each individual weighing approximately 1,250 pounds.

Humans are only willing to eat 51 percent of a cow or bull’s body, leaving behind 10.5 million tons of hide, hair, hoofs, horns, bones, blood, and glands to deal with.

That back-of-the-envelope calculation is likely an underestimate of the total cattle rendering stream, though, because many diseased cattle are discarded and rendered in their entirety.

(The animal identified this week seems to have fallen into this category, although there is no indication that it was showing any particular signs of mad cow disease prior to slaughter.)
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Leftover cow parts like hooves and hair aren’t worth very much in their whole form, so renderers grind them into a paste or powder and load that into a cooking vessel at a steady rate while 300-degree heat, pressure, and steam break it down.

The renderer might add other, non-animal waste products into the cauldron, such as used vegetable oil. Around one-half of the paste is water, which cooks off during this process.

The lumpy soup that emerges from the other end of the cooker is then separated into liquid fats and solid proteins, using either a centrifuge or a press.

A small amount of rendered beef ends up in human food.

The now notorious “pink slime” that many food chains had been putting into their products is made of fat that has been trimmed from beef and put through the rendering process.

The USDA monitors rendered-cow byproducts intended for human consumption more closely than floor-wax-to-be.

While many Americans find the process foul, and some worry about the industry’s safety, renderers argue that their work provides a use for a potentially enormous waste stream.

It also lends a small economic boost to ranchers. Cattle byproducts sell for 37 cents per pound (about 13 percent as much as a farmer gets for beef).

This article originally appeared on Slate. View the full article here.

Aussie beef producers prepare for high demand following US mad cow disease outbreak

Indonesia has suspended some beef imports from the US following the detection of mad cow disease in California, and Australian producers are hoping to benefit from the incident with increased exports.

The Indonesian government confirmed it would be suspending US beef imports and two major South Korean retailers, Homeplus and Lotte Mart – immediately halted sales of the products as the news of the bovine spongiform encephalopathy (BSE) case broke.

Indonesia has suspended imports of boned meat and innards from US beef but boneless meat remains unaffected.

"We have decided to stop importing bone meal, innards and boned meat from the United States, but imports of boneless meat will continue," Indonesia’s deputy agriculture minister Rusman Heriawan said.

"The suspension starts today, but we don’t know how long it will remain in effect," he said, adding that shipments en route will not be affected.

Only a small amount of Indonesia’s beef imports come from the US, and most come from Australia and New Zealand.

Indonesia has suspended some beef imports from the US following the detection of mad cow disease in California, and Australian producers are hoping to benefit from the incident with increased exports.

However, the outbreak in 2006 was much larger than the latest one, which has only been detected in a single cow.

The US has proclaimed that the detection of the disease during routine inspections highlights an effective testing process, and no other animals have been found to have the disease.

But in the case of mad cow disease, many countries will exercise caution and halt imports until the storm passes.

Canada and Japan have said they will continue to import US beef and head of the Northern Territory Cattlemen’s Association Luke Bowen told The ABC that while Australian producers are sympathetic to the American predicament, they also hope the outbreak will benefit them again as it did previously.

US beef exports dropped by almost $3 million following the first outbreak of mad cow disease in 2003.

"Certainly when the cases in early 2000 broke out in Canada and the US and in Europe there was a large void in those Japanese and Korean markets, which Australia was able to fill, and the Americans have only just started to claw back some of those gains that Australia made through that period," Bowen said.

"And we’ve also seen a free-trade agreement signed between America and Korea which has strengthened their trading position as well, so clearly the Americans would have a lot to lose if they were to lose access to those markets."

BSE is highly contagious between animals, and is thought to have caused over 200 human deaths worldwide.

Image: Department of Primary Industries

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