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“We are watching the demise of the Australian food industry”

 Jennifer Dowell, Australian Manufacturers Workers Union Food and Confectionery Division National Secretary is one-one-one with Food Magazine, talking about how the duopoly of the major supermarkets is ruining our food industry, what she’s been telling the inquiry into supermarket behaviour and why the ACCC needs more power.

JB: Last year the manufacturing industry had the highest number of industrial disputes ever, why do you think that is?

JD: I don’t really know, I mean some of it was leftovers of WorkChoices issues where for a period of time people weren’t able to negotiate or discuss things, so there is a bit of catch up there.

In addition, there’s just some normal stuff you get with negotiating agreements, and in the food sector in particular there is incredible pressure on manufacturers so they’re looking to cut costs essentially so that gives a much more difficult environment for negotiations to take place.

There is a lot more demand on the workforce to give up conditions or wages and of course that invariably leads to disputes because it is really hard to reach an agreement.

They’re competing with imported products, but there are many ways to do that and one of the first ways a lot of companies are going about it is to cut work conditions and wages or cut the workforce altogether.

JB: The situation at Shweppes when they were locked out over the company’s plans to introduce 12-hour shifts without providing enough warning, is that something that is becoming increasingly common?

JD: Yes it is, from our point of view. It’s very similar to the Qantas issue, where there is this huge reaction to people who are trying to negotiate in the same way they always have and then you get a huge reaction from the manufacturer where they just lock them out of their jobs.

If you look at the time taken for industrial action by the workforce and compare that to the time taken up by the company’s reaction, the workers used much less time!

And the company is still blaming the workers for engaging in industrial action that caused them to lose money and therefore job cuts but was not their actions that caused that to happen.

There does seem to be a strong approach being taken by manufacturers in response to the pressure they’re under to some extent, and they’re just refusing to negotiate in any sort of reasonable manner.

People are now simply just locked out or work, which used to be a very rare occurrence, but is becoming increasingly common.

JB: Is it legal?

JD: Essentially, they’re entitled to take action in response to what the workers take, but I don’t think it’s balanced.

We have to go through a ballot process, get the support of all workers, specify what the action will be, and we then have to take it within 30 days.

Once we’ve jumped through all those hoops, the employer can just lock you out for an indefinite period of time.

They don’t have to go through any ballots or processes like the employees do, they can just pull that move on the day, basically.

It’s increasingly difficult when employers lock people out of the workforce and they don’t have wages coming in and generally it is done on the basis that they can’t come back to work until they’ve signed off on whatever the proposal is so generally they do have to give up working conditions or wages to get back to their job.

It’s a stupid approach and it is short sighted and not all companies go down that path because they see that it does destroy the working relationship.

You will end up with a workforce that is disengaged with the company, who don’t feel valued or respected, and it will take years to rebuild that trust once it’s lost.

If you’re in a regional are where you have a captive workforce or as with Qantas you have a very specialised set of skills, you may hand on to some of your workers but you will have people who are absolutely upset with and have no loyalty towards management and feel completely put upon by the company.

Some people in the company who see it as a competition or war might see it as a way to force workers to do something they don’t want to do, but that is not constructive.

JB: Do you think there’s a "hush hush" mentality in the industry?

JD: The food processing industry is under incredible amounts of pressure, we’ve put that to the commission.

In the Senate Inquiry, the committees do everything they can to raise the issues, because we have got is producers who providing for the domestic market, but the market is controlled by the duopoly of the two major retailers and that is something that doesn’t happen anywhere else in the world, no other market has these issues.

Yes, you have private label competition in different areas overseas, but they have more than the two we have here.

The food processing industry in Australia is captive to the duopoly, they don’t have control of their destiny whatsoever, the decision Coles and Woolworths make they just have to go with.

There is increasing pressure to cut costs and to produce for private label so they’re being pushed to the wall.

Small companies are going out of business, small and medium ones are going offshore, many already have facilities in Asia Pacific regions and at the moment there is just huge pressure for food manufacturers to keep their heads above water.

Things are really difficult because people in the industry will not talk publically about Coles and Woollies and the industry will not talk publically about Coles and Woollies because if they do, you can be sure those products will disappear from the shelves.

Some companies have taken the sensible approach by investing wisely into the plant over time but many have.

The big problem we’re seeing across the board is the focus on what we produce and linkages to the factory and managers

It’s now a fact that the product is not the focus for these companies, it is totally and completely about shareholder values.

You have major companies like Kraft or Nestle, they come out and say we’re going to cut 500 jobs, but they don’t say where exactly, you’ll find that out later.

What about those people who are going to lose their jobs? Don’t they deserve to know that they’re going to be unable to feed their family?

We used to have people who took pride in what they produced and their company and they had a real relationship with workers and cared about what happened to them but now it is all driven by investment and run by managers who don’t see themselves there forever and are just there for awhile on their climb up the corporate ladder.

JB: You were a part of the Senate Inquiry into the supermarket dominance and you said it is failing Australian companies and workers. How do you think we can overcome the issues?

JD: Well in the case of the duopoly of Coles and Woollies, the anti-competitive practices that go on are appalling, their behaviour is disgraceful and the ACCC needs to have more power to deal with it.

[Senator] Kim Carr referred some incidents to the ACCC, but I’ve spoken to the ACCC as part of the process and encouraged manufacturers to speak to them, but the problem is that if you look at the legislation, there isn’t a lot they can do.

Once you’ve achieved market dominance as they have through their creeping acquisitions, there’s not a lot of power for the ACCC.

We think their power should be beefed up and we think there needs to be more oversight.

JB: Would you support a Supermarket Ombudsman, as suggested by the Australian Food and Grocery Council (AFGC)?

JD: I’ll support anything at this stage! 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.

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.

I know we’ve been systematically raising this issue for 10 years but it has gotten so bad that people finally have to accept that there is a problem.

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.

It’s all very nice when the Australian dollar is high, but when it goes back down we’ll see the same problems we’ve seen before but on a much bigger scale.

In the Griffith region a few years ago, where they grow a lot of oranges they were up in arms because suddenly the supermarkets started importing this cheap Brazilian concentrate, but then the dollar went down and the price went through the roof, so they wanted to come back to Australian oranges.

But a lot of them were out of the business already.

JB: How do we regulate it and try to ensure this doesn’t happen?

JD: Well, there are a number of issues, and I think the prominent issue is the marketplace and it will remain an issue until you allow for fair competition.

The mistake that most people make in these Inquiries and things is that they look at Coles and Woollies as retailers, but they are food processors and they control the market.

If I control a market I can just put all my own products in it, and as I have said at the inquiry, if I am mother pushing a trolley through Woollies with three screaming kids, and all they have is their own brand, I am not going to pack my kids up into the car and drive around to find non-existent corner stores that stock the product I actually want.

They try to say they’re allowing consumers to decide, but they are making all the decisions for us, and it’s time we opened our eyes and saw that.

If a company like Nestle came out and said “we’re going to buy a stake in Coles, and dominate the shelves with our products,” there would be uproar, it would be a huge scandal, but when the supermarkets do it, it’s a non-issue. That just doesn’t make sense.

JB: The AFGC did a report showing 130 000 workers in the food and grocery sector will be out of work by 2020 if the current environment continues. What are your thoughts on that?

JD: It isn’t going to be 2020 before this happens, I have been here for 20 years and I am always in and out of factories and I can tell you with absolute certainty that it will be before 2020.

It’s going to be before them, nobody can survive in this environment, most places I’m going, they’re even competing with their own plants in other countries, if the Malaysian or Chinese plant is going better, they have to compete.

The problem with that is that people aren’t comparing like with like. We produce food to a very high level and what is being imported from overseas needs to be the same quality.

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

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

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

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

JB: With all the political drama going on, and all the speculation over leaders and arguments within parties, are they losing focus on these important issues?

JD: These are all issues that governments and people, if they are honestly concerned about safety, need to make sure they count as top priorities.

I think, to be fair, there’s a lot that’s being done, the food processing start up group have facilitated this because they know there’s a problem.

But the problem is that we can’t ever get a united front from political people because they’re constantly just trying to score points off each other.

Somewhere along the line it would be nice if there was some recognition across all of the major parties that we do have a major issue here and that they want to work on how to solve that.

With the national food plan and the senate commission raising the recognition about some of these issues, it will be interesting to see what action, if any, will be taken. How serious are we about food safety?

First of all there needs to be a consensus that we do have a problem, then we need to get people from various interest groups only focused on one issue, to look at these issues as one whole problem.

Just throwing our hands up in the air and declaring it’s all too hard is not going to solve anything.

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!

Essentially, there is not enough information available.

We are watching the demise of the food manufacturing industry in Australia.

People look at the rising middle class in China and see that as our export market and think it’s going to save the day, but what they don’t realise is they already have factories there, they will invest in those factories before they import from Australia because of the barriers.

It sounds good in theory, but if we look at what’s actually already there, it is just simply not going to happen.

JB: What do you think of certain news programs siding with the supermarkets, doing an ‘exclusive’ on Coles’ decision to produce slash prices, portraying it as a positive move, rather than reporting how those decisions are going to impact growers?

JD: The basic question is ‘do we want to supply food to our own population or not?’

At the end of the day how much does Coles and Woollies pay in advertising to these programs?

There are a few that have been critical but not to the extent you would expect.

What it comes down to, according to the supermarkets, is that it comes down the them looking after us as consumers by cutting prices, but it comes at the expense of quality and also, they’re not asking consumers if they’re OK with this, they’re just deciding for us.

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.

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.
 

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