Burger King to use roam free eggs and pigs by 2017

Burger King has announced it will only use animal products that come from free-range farms by 2017.

The global fast food giant announced the decision to only serve humanely bred and grown animal products in it’s US outlets within five years, but has not said whether the remainder of its 12 500 outlets throughout the world will also do the same.

Food Magazine has contacted Australia’s version of Burger King, Hungry Jack’s, to ask whether local outlets will be following in the footsteps of the American stores, but calls have not yet been returned.

Use of gestation crates a complicated issue

The company’s statement says it will only use accredited free range eggs and pork from suppliers who do not use gestation crates.

The gestation crates used to breed pigs have been getting a lot of attention in recent weeks, with welfare groups in Australia calling on producers to stop the use before the 2017 deadline set down voluntarily by the industry.

But a spokesperson from Australian Pork Limited told Food Magazine earlier last week that the use of the crates is for the best interests of the animals, to protect them from attacks due to increased hormone levels during the early stages of pregnancy and ensure proper nutrition.

The 200 centimetre long and 60 centimetre wide metal-barred crates are used to hold all sows for at least part of their 16-week pregnancy.

Almost 18 months Australian after pork producers agreed to ban the steel pens, a third of pregnant sows are no longer confined to the small stalls.

Recent Australian Pork Limited findings showed that 67 per cent of pregnant sows were still housed in the stalls one to four weeks after mating, while the remainder where not in the stalls at any stage of pregnancy.

Animals Australia’s Lyn White, believes that while it is ”pleasing” that some pig producers are no longer confining the pigs to the cages, the ban should be introduced sooner than first decided.

”The two-thirds of pigs who remain subjected to the cruelty of sow stalls won’t be alive to receive the benefits in 2017,” she said.

”It is clearly within the ability of the pig industry to alleviate their suffering now.”

But the Australian Pork Limited spokesperson told Food Magazine that many people don’t understand why the stalls are used and how it ensures the safety of the sows.

“As an agricultural group, we are looking at ways to please the consumers and also ensure the safety of the animals, because there are a lot of pictures out there that make it look bad, but in reality it is in the wellbeing of the animal and her piglets.

In response to questions about the Animals Australia’s calls to introduce the ban sooner than 2017, the spokesperson said it is not as simple as some people think.

“The problem we have is you can’t liken this move to walking into a room and turning off a light, it’s far more complicated that that, and we always have the welfare of animals at heart.

“And for producers to make changes within their own infrastructure, they need authority approval, from local councils and state regulatory services, and that takes time.

“Then need finances to undertake the changes.”

The spokesperson explained that the readily available horror stories and images of animals housed in the stalls during pregnancy are not painting a realistic picture.

“People are under the false impression that every pig is in a cage, but these sow stalls are only relevant to pregnant pigs, and they are placed in there for safety reasons,” the spokesperson told Food Magazine.

“What it means is that they are mated and within 5 day period are moved to groups.

“Depending on the operation, each producer will decide the size and location of the group and when they’re nearly ready to give birth they are moved to a farrowing stall, a birthing stall, which is a spring-loaded contraption to prevent her suffocating the piglets by lying on them.

“This alone saves about 1 million babies per year.”

The latest trend for retailers?

Coles has pledged to only stock fresh pork meat supplied by producers who have abandoned sow stalls by 2014 and experience would indicate Woolworths would quickly follow suit.

Burger King’s statement was made in a joint statement with the Humane Society.

"For more than a decade, Burger King Corp. has demonstrated a commitment to animal welfare,” Jonathan Fitzpatrick, chief brand and operations officer said.

"We continue to leverage our purchasing power to ensure the appropriate and proper treatment of animals by our vendors and suppliers.”

Animal rights group the Humane Society welcomed the decision by Burger King.

"These changes by Burger King Corp. will improve life for countless farm animals and encourage other companies to abide by animal welfare principles up and down their supply chain,” said Wayne Pacelle, head of the group.

Woolworths sends jobs offshore

Woolworths is the latest food producer to send its operations abroad, as the cost of doing business in Australia continued to increase as the dollar does.

The high cost of manufacturing in Australia has been blamed for several food companies, including Heinz, sending jobs offshore – mostly to New Zealand.

The supermarket giant transferred 40 contact centre jobs to Auckland this week and it will be quickly followed by Imperial Tobacco, which announced it would be relocating its cigarette manufacturing across the Tasman also.

The combination of the high Australian dollar, increases to wages and the supermarket price wars are making it very difficult for food manufacturers to stay afloat.

According to the International Labour Organisation, Australian manufacturing workers earned more than $US35 an hour in 2008, compared to less than $US20 an hour in New Zealand.

Australian manufacturing workers also earn more, on avjeerage, that those in the UK, US and Canada.

In 2010, McCain relocated its vegetable production to New Zealand, leaving Simplot Australia as the largest vegetable producer in Tasmania.

Last year, Foster’s controversially accepted a takeover bid by London-based SABMiller, making Coopers the biggest local brewer, a reputation the company has pledged to maintain.

While the wages in the manufacturing sector are better here than abroad, they still struggle to compare to the high-paying mining jobs, which are seeing countless Australians leave farming and manufacturing jobs behind and relocating to mining towns.

The average age of an Australian farmer is over 60 and a recent study found 75 per cent of Australian year six students think cotton socks are an animal product while others believe yoghurt grows on trees.

Earlier this week, dairy farming was rated the second worst job in the world, based on earning ability, hiring outlook, work environment and physical demands.

”Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you’re unable to properly plan,” Callum Elder, the executive general manager of quality and innovation at Simplot, 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.”

Local manufacturers call for dedicated Australian-made aisles in supermarkets

Australian food manufacturers are calling for a dedicated “Australian made” aisle in supermarkets to make it easier for consumers to choose locally made products and keep local businesses afloat.

Glenn Cooper, chairman of Australia’s largest beer brewer and entrepreneur Dick Smith are just two of the high profile names calling on the industry to take action.

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

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

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

"That may mean two milk areas, two butter areas but at least customers, when they choose something from that designated area, know they are buying Australian-made products," he said.

Coopers became Australia’s largest brewer following Foster’s controversial sale to London-based SABMiller in September last year, and has always pledged to remain proudly Australian made and owned.

“Being the largest Australian-owned brewer is a badge of honour we will wear with pride,” managing director Tim Cooper said at he time.

“This represents the reward for 150 years of hard work in brewing by the Cooper family."

Along with being the chairman to one of Australia’s most successful beverage companies, Cooper is also the deputy chairman of the Australian Made, Australian Grown campaign group, which aims to encourage more Aussies to buy local products and make the Australian Made definitions simpler.

He does not believe the Australian-made aisle would be a big cost or time implication for the supermarkets, which already have a number of local products, but are difficult to find amongst all the other imports.

"Say, for example, it was 30-odd per cent [of floor space set aside]," he said.

"Well, supermarkets may already have that level of Australian content of food as part of their normal stock but it’s just not clearly defined as an area."

"Hopefully, enough people will get behind it to give some sort of leg up to our farmers who are, in many areas, being clobbered by imports.

"I’ve been told about a Mallee onion grower getting four cents a kilo for his crop.

"These guys are continually under pressure to match cheaper import prices."

And while most food and beverage companies are reluctant to speak up against the anti-competitive and bullying behaviours of the major supermarkets for fear of the repercussions, Cooper said he is not going to be afraid of speaking up for local industries.

"What is wrong with protecting our own industry to a certain degree?" he said.

"I don’t see anything wrong with that and most people would support it too, but our politicians, for some reason, don’t want to."

Consumer watchdog CHOICE is also behind the plan to make it easier for shoppers to buy Australian made.

"Consumers would like, where possible, to choose Australian products to support local growers," spokesperson Ingrid Just said.

"Consumers are certainly keen to understand where their food is from and it is important for that to be clearly on the label."

Contrary to the opinion of many shoppers, Cooper maintains that increasing the number of Australian made products in a shopping trip would not drive costs up.

Dick Smith has been vocal about Coles’ rejection of his Australian made and packaged fruit spreads, which it says will not sell enough to make a profit.

“Woolworths is taking the five new products, but Coles won’t, mainly on price!" he told workers at Penrith’s O-I Glass factory in February.

“Coles are letting Australians down, in this particular case.

“I couldn’t believe it.

“[It’s a] beautiful Australian product, but the minute they found out it was 20 cents dearer, their belief was ‘no.’

“If you go into Coles, and Coles have previously been good supporters of Australia, you’ll find that in their fruit spread range, from what I could see, everything is imported!

“Whereas Coles used to say when you were selling something to them ‘you’ve got to make some money, just as we’ve got to make some money,’ now they actually say ‘we don’t actually care if you go broke, we’re just going to sell the cheapest.’

Smith told Channel 7’s Sunrise program this morning that while the idea of an Australian-made aisle in supermarkets is good, he is unsure if it would work in reality.

Govt, industry leaders discuss food manufacturing reforms

The future of Australia’s food industry, including possible regulatory reforms, will be on the agenda of the Federal Government’s Business Advisory Forum today.

The inaugural event, held in Canberra, will bring together leaders from across government and industry who will attempt to identify major problems in Australia’s food manufacturing sector, and find ways to assist local companies.

The Australian Food and Grocery Council (AFGC)’s Acting Chief Executive Dr Geoffrey Annison said the food industry desperately needs government intervention if it is to be a viable industry in years to come.

“The Government must implement accelerated depreciation tax measures to enable manufacturers to take advantage of the high Australian dollar to invest in large-scale plant equipment upgrades to improve productivity and reduce energy use,” he said.

“Compliance with regulation and standards has also been identified as a major and ongoing issue for companies – the Government must reinvigorate its reform agenda in this area.”

“Exotic meats” could appear on supermarket shelves by 2013

The food safety regulator is considering a proposed amendment to the Australian New Zealand Food Standards Code, which could see “exotic meats” sold in Australian supermarkets within a year.

Food Standards Australia New Zealand (FSANZ) is consulting on the proposed changes, which would include allowing meats such as bison, buffalo, rabbit, ostrich and emu and crocodile to be sold in Australia.

Producers and processors of minor meat species and wild game say current commercial regulations, which allow the meat to be eaten in Australia but not sold here, makes their businesses unviable.

FSANZ is considering the proposal to incorporate the processing controls that currently exist for other meats like beef, lamb and chicken across all meats, which would allow meat producers and processors to operate under a single, national set of requirements for all meat products, including exotic meats.

FSANZ will conduct two public consultation before May this year, before notifying the Ministerial Council of its findings by late April 2013.

Fear campaign damaging Supermarket Senate Inquiry

The bullying behaviours and fear campaigns used by the major supermarkets to wield complete power over suppliers is still getting in the way of the Senate Inquiry into the issue.

The Australian Competition and Consumer Commission (ACCC), the Australian Food and Grocery Council (AFGC) are collaborating on the Inquiry into the anti-competitive practises of Coles and Woolworths.

The decision to take the matter to the Senate came after the dairy industry voiced its concern over the  milk price wars which resulted in both the major supermarkets selling milk for just $1 a litre, pushing farmers out of the industry as they struggled to make a living on such small payments.

Countless Australian food companies are either closing down completely or moving their operations overseas, as the influx of private-label products on supermarket shelves leaves them with two choices.

They can try to compete with the supermarkets who are able to sell similar products at ridiculously low prices because of the power they have over suppliers, but the chances of surviving, let alone making profits, are slim.

Or, if you can’t beat ‘em, join ‘em. Many Australian food companies have reluctantly agreed to cease operations as they were and instead use their factories and workforce to supply products for the supermarkets’ private label products.

But if they thought were at the mercy of the supermarkets before, they haven’t seen the worst of it until they relinquish any kind of control they had over their destiny by signing such an agreement.

Because when Coles and Woolworths decide they want to put a product on special, or they need a huge amount of a certain product, you have to deliver.

And if a company can’t deliver on time, or at the price they want to sell the product at? Too bad, Coles and Woolworths say.

“Invariably they say it is not absorbed by the grower or the manufacturer when they cut the prices but in the end it always does,” Jennifer Dowell, National Secretary of the Australian Manufacturing Workers’ Union Food Division, told Food Magazine.

“Companies can’t even transport their own stuff to Coles and Woollies!

“They transport it for you and then just bill you with their high transport prices later.

“And they won’t store stuff that is within a certain timeframe from its use-by date.

“They make the producers store it then tell them they need it within so many hours.

“So producers are in this quandary where they can’t afford to produce stuff and keep it in storage because if Coles and Woollies decide they don’t want to take it they are out of pocket.”

“They have to produce everything at such short notice so they are never able to get a long term view and a stable situation at their factory.”

Nobody willing to speak up

Dowell said the fear campaign the major supermarkets operate with makes it impossible for food companies to criticise them.

“The public doesn’t have enough information about what’s really going on in the industry.

“It’s completely ridiculous that they can’t come out and publically say ‘Coles and Woolworths are killing us’ because they just ensure that they will go out of business.

“If you publically criticise Coles and Woollies, your products will just no longer be put on the shelves, and they’re getting away with that!”

Countless food producers and farmers have discussed the impact of the supermarket dominance with Food Magazine, but almost all are too afraid to go on the record with such claims.

With Coles and Woolworths controlling 80 per cent of the grocery market in Australia, if one or both decided to stop stocking a companies’ product, it really has nowhere else to turn.

Journalists and workers in the industry are all too aware of the dire situation our food sector is in, but nobody is willing to put their name or company to the claims.

The ABC’s Lateline made over 100 calls to get comment from a food producer, and when they did find one willing, he would only speak with the promise of anonymity.

“But after more than 100 phone calls, just one Australian supplier was willing to speak to Lateline about alleged abuses of power by Coles and Woolworths as long as we agreed to hide his identity, like this, (vision shows unidentifiable silhouette of man) and even hide the kind of product he supplied,” Margot O’Neill says in the story.

“But after sleepless nights the supplier pulled out, leaving us to use only his words about why he’s so scared.

“ANONYMOUS SUPPLIER (male voiceover): "It’s quite common for the majors to stop dealing with a supplier … and suppliers to have little chance of a viable business unless they’re serving the two major supermarkets, … so it’s too big a risk to expose myself.

“But I think the power of the big supermarkets is now too large for the proper functioning of our food supply."

And while the ACCC has promised to keep all claims made to it in regards to the supermarkets confidential, few are willing to speak up, for fear they will be found out and punished.

“Without doubt there is a climate of fear when it comes to farmers and food processors speaking out about practices of the big two,” Nick Xenophon, Senate select committee food processing, told the ABC.

“When farmers and food processors tell me that they feel a bit like medieval serfs, they’re beholden to Coles and Woollies as their medieval landlords, then you know there’s something seriously wrong.”

Something has to be done

When asked if she would support a Supermarket Ombudsman, as suggested by the Australian Food and Grocery Council (AFGC), Dowell was welcoming of the idea.

“I’ll support anything at this stage!” she told Food Magazine.

“We have been talking about this for years and I’ve watched it get worse and worse.

“They own just about everything; they’ve got petrol, pharmaceutical, pokie machines and alcohol so essentially they have this massive political influence so they intervene in those areas too.”

With so much control over various industries and governments in Australia, the scary reality is that the major supermarkets may not be stoppable, at least not without specific laws and regulations to stop the behaviours.

“If we get more powers given to the ACCC, any power to an Ombudsman, and get people the ability to raise issues without losing their job, then that is a step in the right direction, because right now they cannot,” Dowell explained.

“My concern is that if we lose food sovereignty, if we lose control of our food chain we become hostage to other countries supplying our food.

“How ridiculous is that? In Australia we have the ability to produce the best food in the world, so how are we getting into this situation?

“Once these companies go, they won’t some back, they’re not going to come back and rebuild factories and businesses because Australia is upset after it basically kicked them out in the first place.

“If we rely on imports, and a country decides it is going to give its own market priority, as it very well should, what do we do? Where do we go?

“At a time when the world is saying Africa needs to have food sovereignty, we’re actually participating in a process where we won’t be able to feed our own people.

“We will be reliant on importing food.

“When we finally hit the wall and find that everything is coming from overseas and we no longer have any Australian food industries, it will be too late.”

How concerned are you about the power held by Coles and Woolworths? How do you think they can be stopped?

SPC Ardmona changing strategies to stay afloat

In response to the difficulties Australian food manufacturers face, including the supermarket price wars and the high Australian dollar, SPC Ardmona is embracing new packaging technology to reduce costs.

The iconic Australian brand has long been famous for the tins its foods, including fruits and vegetables, have always been available in.

But to keep up with the big guys – the major supermarkets – SPC had to re-evaluate how to stay afloat in the market.

"We have no choice. We have to work around the high dollar; accept that house brands are a growing reality of food retailing and lift productivity so we can absorb rising food commodity costs," Pinneri said.
The company also got a leg up in the industry when it introduced fruits in plastic containers and screw-top bottles, which provided an easier alternative to the traditional tins.

The company was losing its place in the market as, like so many other sectors, it was being pushed out by cheap imports and private label products sold at a lower price.

Last August it announced it would cut 150 jobs and close its Mooroopna manufacturing plant due to a slump in trading as a result of the strong Australian dollar.

Together with parent company Coca-Cola Amatil, it worked hard to source local ingredients for its operations, with only five per cent of its products made from foreign components, usually only used during shortages in local supply.

SPC’s exports suffered a 25 per cent slump over the last five years, largely due to the high Australian dollar.

But Pinneri pointed to the predicted 70 per cent rise in global food demand in the next 40 years as a great opportunity for food processors.

"Now we’re committed to getting out of the minor league and staying the course," he said.

"We’re getting on with investing in new opportunities in this industry.
"You’ll hopefully see a change in our products in store – what we produce will be more consumer-centric.

"We’re no longer a canned fruit business – those are Nanna’s products – we’re about new technology and product lines.”

"Well make this investment in Australia work.

"We’re commited to achieving phase one of our transformation by 2015."

The company is also examining possible plans to develop specific supermarket house brand lines.

"I take a different approach to a lot of thinking on private labels – I’d rather leverage my infrastructure by producing private label products than see them imported from somewhere else," Pinneri explained.

He also believes more cooperation between government and industry is needed if the Australian food manufacturing and packaging industries are to survive the changes to the market.

Governments need to encourage scale and capital investment, he said, to help companies lift productivity at the rates needed to compete with China.

"We must reduce the burden on local manufacturers, accelerating tax depreciation allowances on re-equiping costs and investments in carbon reduction and water saving technology," Pinneri said.

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