Coca-Cola Amatil will increase the size of it’s 250mL glass bottles to 330mL and added a resealable lid, in a move the global beverage giant says will add convenience and portability.
The new bigger bottle, which will feature a twist-top resealable cap in place of the current crown seal cap will enter the market next month.
The changes will be across the Coca-Cola, Coke Zero, Diet Coke, Sprite, Lift and Fanta varieties, but each flavour will retain its individual design.
Following extensive consumer research, which found most Australians believe 330mL is the ideal individual packaging size, and that a resealable cap is beneficial in today’s busy lifestyle, the company made the decision to implement the changes.
“By increasing the volume size of the Coca-Cola premium glass bottle range and adding a resealable cap, we are giving our on-premise consumers the size they want of their favourite soft drink, with the extra convenience of portability,” Trent Lilienthal, Coca-Cola Licensed, Customer and Commercial Manager said.
“The unique Coca-Cola design was invented in 1915 and is an integral component of one of the most recognised icons of our time, distinct on the basis of feel alone.
“These packaging changes are part of an ongoing evolution of a classic.”
More food and beverage manufacturers than ever before are embracing the demand for convenient and resealable packaging, and late last week, Taylors Winery’s announced it has developed a screw-top seal that could withstand the pressure of gassed sparkling wine and has releaseda line with the new lid.
What do you think of Coca-Cola Amatil’s decision? Is 330mL a better size, and does everything need a resalable lid these days?
International food giant Nestlé is making some changes to its businesses in India and the US.
The capacity of its Goa factory in Indonesia will be expanded as part of a three-year US$125 million investment plan in the key emerging market.
Switzerland-based Nestlé said the factory improvements will create 25o jobs.
“We have been in India for 100 years and have factories in eight locations across the country,” Jean-Marc Duvoisin, global head of human resources at Nestlé said.
“India is important for us and we have deep roots here."
In the US, Paul Grimwood, Chief executive of Nestlé UK & Ireland, has been appointed to the role of Chairman & CEO of Nestlé USA.
The appointment comes after the current chairman and chief executive Brad Alford, announced plans to retire in October this year after 32 years with the company and seven as chairman and chief executive.
Grimwood has been in his current role for over three years and prior to that, was the head of the Nestlé UK Confectionery business for three years.
Public health advocates who criticise industries for promoting harmful forms of consumption – the alcohol, food, pharmaceutical, tobacco and gambling industries – increasingly find themselves facing legal action for defamation or other forms of legal harassment.
In 2009, Peter Miller and 50 colleagues (including myself) published a letter in the Medical Journal of Australia (MJA) stating that we would not accept research funding from the organisation Drinkwise, because we believed that the alcohol industry had undue influence over its research agenda.
Drinkwise was established by the alcohol industry and part funded by the Howard government to educate Australians to “drink wisely”. Many in the public health field were sceptical of its intentions because half of its board came from the alcohol industry and several of the community representatives on the board had worked for or with the alcohol industry.
Although the MJA gave the chair of the Drinkwise board the right of reply, signatories received a personal letter stating that Drinkwise Board members felt they had been “defamed” by the letter. No legal action was forthcoming but the letter was taken as a warning that we could be sued if they continued to criticise Drinkwise.
This kind of threat is not uncommon. The Melbourne public health physician Ken Harvey has been sued for damages by two companies for making a formal complaint to the Therapeutic Goods Administration (TGA) in which he said that that there was no evidence to support the health claims made for their products.
Neither are these are isolated events. I know colleagues who have received threats of legal action for defamation from industry advocacy groups and “independent” consultants who work for these industries. In another case, senior alcohol industry officials wrote to the vice chancellor of a researcher’s university attacking his personal integrity and professionalism.
It’s easy to say that researchers should refuse to bow to these attempts at intimidation. Unfortunately, it can be expensive to defend defamation actions brought by litigants with deep pockets. Nor can researchers depend on universities to provide legal defence in these cases.
While universities encourage “community engagement” by their staff, they don’t always provide legal assistance to deal with threats arising from public comment. I discovered this two decades ago when threatened with a suit for defamation for comments made on the ABC about the regulation of psychologists. The university’s lawyers declined to represent me because I was not speaking in “an official university capacity”, even though I was commenting on a matter of public importance within my area of expertise.
These issues should be of concern to lawyers. Defamation specialists could provide pro bono legal advice to researchers threatened in these ways. Public advocacy lawyers could examine the extent to which these threats occur and consider ways to combat the use of defamation and other laws by vested interests to silence public debate.
Legal remedies worth exploring include laws such as the one passed by the ACT parliament in 2008 imposing civil penalties on companies that attempt to use lawsuits to stop individuals and groups from voicing their opinions. Such laws may include actions, where possible, to seek protective cost orders.
Free public discussion is essential for good public health policy. Public debate is already heavily weighted against public health interests by the greater access that wealthy alcohol, pharmaceutical and complementary medicine industries have to advertising, and utilise the mass media and specialist legal advice. We need to prevent threats of legal action from being used to silence public health advocates and strangle public policy debate.
Wayne Hall receives funding from the NHMRC. He has previously received funds from the AREF (now the Foundation for Alcohol Research and Education).
Despite apprehension about the impact of supermarket private labels and forecasts showing they will dominate shelves in the next five years, Woolworths has attempted to calm the market by releasing information on its range on its website.
Business information research firm IBISWorld has forecasted that the share of private-label products will account for over 30 per cent of all Australian supermarkets sales by 2017-18 and according to IBISWorld’s General Manager (Australia), Karen Dobie, they have been one of the industry’s fastest growing segments over the past decade.
“In 2007-08, private labels accounted for just 13.5% of total supermarket sales – meaning the segment has grown by more than 85% over the past five years”, Dobie said.
The debate over private label continues to rage, and the impact of the reduced shelf space afforded other companies has led to countless manufacturers and farmers going out of business.
As both Coles and Woolworths appear to be delivering on plans to double private label products in store by 2020, the availability of anything other than private label becomes far less.
Consumers have little choice but to buy private label, as other brands are replaced by supermarket imitations, and according to IBISWorld data, Australians will spend over $21 billion on private label products in the 2012-13 period.
This is already a huge increase from the $19.7 billion in 2011-12, and an even bigger increase from the comparatively tiny $9.96 billion five years ago.
By 2017-18, Australian spending on private label products is expected to hit $31.8 billion, according to Dobie, which is already a 50 per cent growth from five years ago.
“The recessive economic climate has been a strong driver of private-label growth.
"Households have been reining in spending, paying off debt and increasing savings,” she said.
“This, coupled with an increase in the range of private-label products available, has led many consumers to make the shift to home brands.”
“Branded producers have responded to private-label growth by discounting their products to remain competitive.
“However, the dominance of Coles and Woolworths means that they are likely to give preference to their own brands in terms of spacing and design allocations – placing continued pressure on the big brands.
“This can be detrimental to branded producers as their share of shelf space is eroded by home brand products.
Woolworths attempts to address concerns
To address the competition between supermarket private label products and supplier brands, Woolworths has released an Official Range Profile of brands for its Australian supermarkets.
The supermarket giant said the data will be regularly updated on its website and will allow for a “more informed” discussion on choices between private label and branded rpoducts.
Managing Director of Woolworths Supermarkets, Tjeerd Jegen, said Woolworths wants to demonstrate how they meet their customers’ needs.
“As part of that commitment, we are releasing a snapshot of data about our range to the market to put our business into a correct perspective,” Jegen said.
“The facts show that in packaged groceries and perishables, Woolworths stocks more than 44,000 lines of which 94 per cent are branded products.
“Just 2,500 are Woolworths Own Brand products,” he said.
While the supermarket is maintaining that their range is heavy in branded products as a way to alleviate debate on the issue, it does not change the fact that the supermarket duopoly is gaining more control of the market all the time.
There have been calls for an ‘Australian-made’ aisle in supermarkets, a cap on the percentage of private label products that can be stocked and restrictions on the market share the supermarkets can have.
However, while the awareness about the impact of the price wars, particularly on Australian dairy farmers is becoming more widespread, the supermarkets continue to maintain they aren’t doing anything wrong, but are instead encouraging companies to innovate and looking out for their customers.
We invited representatives from both Coles and Woolworths to attend our Food Magazine Industry Leaders Summit in June, but because there was one discussion topic, out of a total of six, planned on the impact of the supermarket price wars, we were told they had “no interest” in being involved in what they called a “get the supermarkets” agenda.
When Food Magazine reported on Coles’ failure to respond to more than 73 000 consumers who had “liked” a post on Facebook detailing the impact of the reduced price milk, we received a call a Coles representative, who wanted to point out that they did respond, albeit three days late and to the wrong person.
Food Magazine was accused of being biased towards food manufacturers, but since this representative from Coles does not usually return Food Magazine’s phone calls, we pointed out that does make it difficult to report from both sides.
We tried to come to an agreement that when we called for comment on stories, he would respond, and Food Magazine, in turn, would provide their perspective on all such stories.
However, he would only agree to this arrangement if we started reporting more favourably on Coles, saying he would “closely observe” the news section to see if we were doing so, before he agreed to participate in stories on the supermarket price wars.
Unfortunately for the supermarkets, we can’t be bullied into behaving the way they would like us to and will continue to report the true realities of the supermarket environment for food manufacturers and producers.
Do you think there needs to be limits on market share of Australian supermarkets? Do you buy private label?
Food manufacturers, packaging organisations and consumers have been warned that counterfeit household items including food products are becoming increasingly common in Australia.
Yesterday NSW Police seized 33 tonnes of counterfeit laundry powder labeled as reputable brand OMO, in Sydney.
The seizure is the result of extensive investigations that have run over several months, which aim to track down and intercept the sale of counterfeit items.
Police are expected to lay a range of charges against the two individuals allegedly behind the importation and sale of this counterfeit product.
“Sadly this is an increasing threat for all Australians,” Mary Weir, General Counsel of Unilever Australia, which produces the authentic product, said.
“The counterfeiting of consumer goods is a multi-billion dollar criminal industry around the globe and it is important that those seeking to engage in this criminal activity understand they will be subject to the full weight of the law.
“The Police action is part of a larger law enforcement drive necessary to protect consumers and ensure they can buy well known and trusted brands like OMO with confidence.
“However, consumer also need to be wary about products claiming to be trusted brands – particularly from overseas- and should always ensure they deal with reputable retailers.
Food brands including Nestle and Kraft are also dealing with brand imitations and working in collaboration with police to stamp out the practice.
Recently, Food Magazine thought Nestlé had changed its infamous Milo jar, by adding a glass bottle to its range, but when we asked Nestlé about the change, they said it was not a new development, but rather a counterfeit product.
The Milo jar appears to be authentic, judging by the labelling.
The nutritional panels also seem to be authentic.
Although on closer inspection, it appears the label on one side is upside down. Mistakes like these, which the authentic manufacturers would not make, are one way to spot counterfeit products.
It is difficult for consumers to be 100 per cent confident that they are not buying any counterfeit products, but should look for the "Australian Made” logo to make sure, and if they believe it could be a fake, should return the product to the retailer and request a full refund.
Despite three milk processors ending plans to cut the farm-gate price for milk, farmers in the UK have pledged to continue blockades of processing depots until all price cuts are rescinded.
“We will continue the protests at depots until everyone has rescinded the price cuts,” David Handley, chairman of Farmers For Actions (FFA) said.
“We also want to track the money that was taken from us in May/June.
“We have given them four weeks to show us their accounts so we can see where the money went and we want some of it back.”
Protesters wave goodbye to a milk tanker which is forced to turn around and leave the Dairy Crest milk processing at Foston, Derbyshire after farmers blocked entrances with their tractors.
The UK dairy farmers are suffering similarly to their Australian counterparts, and have been calling for the price cuts to be abandoned, as they are left unable to break even on their operations due to the low farm-gate prices.
Farmers and the FFA have been blockading plants since last week, over what they say are unnecessary cuts.
“The decision too reverse the price cuts totally vindicates our action and shows there was no need for what they did,” Handley said.
A concerned consumer’s post on Coles’ Facebook page about the impact of its price cuts on farmers has gained more than 73 000 “likes” over three days, but the supermarket giant is yet to respond, despite constant declarations that customers and farmers are its main priorities.
On Friday, Jane Burney posted a heartfelt summary of the supermarket price wars effects on ordinary Australians.
Your $1 per litre of milk deal is killing the lifeblood of our dairy industry. The ramifications of it are finally rearing their ugly head. Dairy Farmers has announced it's price for Tier 2 milk at 13 cents per litre. This is not sustainable in an industry where costs of production can be as high as 30 cents per litre. The consumer is paying $1 a litre and the only winner here is the supermarket. It is time for us to go back to the old fashioned way; in which we bought real milk that tastes like milk; no permeate and where our fruit and vegetables were grown in our beautiful country. Stocking garlic from China, Argentina. What is going on? Obviously it is cheaper to buy it from overseas then from our country; grown in God knows what. And for our farmers and the towns they support and encourage capital growth; it is heartbreaking. Your latest ad campaign sprouting that you support Aussie growers in insulting. You are misleading the public in how you support Aussie growers. Not only have you ruined the fresh milk market but you have also lowered the price on your cheese and butter. The only winner here is you. Eventually all the Aussie growers you so called support will be out of business. Dairy farmers who work 7 days a week, 14 hours a day, who have been dairy farming their whole life, whose cows are their whole life will have to stop farming as it is no longer economically viable to continue. Our "fresh"produce will be flown in. The consumer will be stuck buying expensive, overseas produce. What will happen to our economy and our country towns? I urge people to think about what they buy. The more Australian made produce we buy, the more our money stays here and benefits us. Your $1 milk is a nail in an already suffering coffin. I am ashamed to watch you ads and us farmers burn in resentment when we do so.”
Over 4 500 people have commented, supporting Burney’s position about Coles’ decisions, and more than 73 000 have “liked” the post.
But just like its other notable social media fail earlier this year, Coles has failed to respond to the outpouring of support for Aussie farmers and disdain for the supermarket giants actions.
“In NSW, my state, I see farmers being asked to sign contracts for three cents a litre than their previous contracts,” Terry Toohey, Australian Dairy Farmers Director said at the Food Magazine Leaders Summit.
“This will have astronomical effects on fund and profit margins.”
"In my case I'll have 40 per cent of my tier 2 of milk [purchased] at 18 cents [per litre].
"The cost of producing it is 40 cents [per litre].
"So, you start to look and say, I'm only one person, there are 800 dairy farmers in NSW alone."
The current practice is for milk companies to announce what is known as an Anticipated Full Demand (AFD) to Dairy Farmers Milk Cooperative (DFMC), which is bought at a somewhat reasonable price and referred to as Tier 1 milk.
Any milk deemed ‘surplus’ is then paid at a much lower price and referred to as Tier 2 milk.
However, the buyers of the milk produced on Australian farms are deliberately underestimating the amount of milk that each can deliver, meaning they are not obligated to buy a considerable portion of the milk they know a farm will produce at the reasonable price.
There is no transparency at farmer level as to what Tier 2 milk is being sold to other processors for.
"The retail actions are certainly impacting the dairy farmers in a negative way, this combined with the uncertainties and other factors [impacting] dairy or other farming, it's making it unattractive for the next generation, because it's not profitable for my children,” Toohey said.
"If I was old and had children ready to take over the farm, I will tell them blue in the face not to come into agriculture.
“And that's pretty sad after 107 years on the one farm."
And as farmers leave family farms because they can’t make enough money to survive and Australian food manufacturers continue to go bust because they can’t meet supermarket expectations, Coles recorded a three per cent growth in sales on Friday.
Update: Coles contacted Food Magazine this afternoon to inform us that they did, in fact, respond to the comment posted on Friday afternoon, at 7am this morning.
The supermarket giant did not actually respond to the original comment, but rather one of the many Facebook users who have re-posted the original comment.
They said: “Hi Brent, we are committed to paying a fair price for our milk and actually increased the prices we paid to processors before we cut fresh milk prices in store last Australia day. This meant that processors did not have to reduce the price they pay to farmers. Helping Australian families buy more Australian milk is good for the dairy industry. We also have to disagree about importing fresh produce because we only import when products are not available in Australia. We call this our “Australia First” policy and it means that 100 per cent of our fresh meat, all our milk and 96 per cent of our fresh fruit and vegetables are grown right here at home. Why not take a look next time you are in store.”
What do you make of Coles' comments? Do you agree with the original comment posted on Facebook?
As farmers leave family farms because they can’t make enough money to survive and Australian food manufacturers continue to go bust because they can’t meet supermarket expectations, Coles has recorded a three per cent growth in sales.
Coles’ decision to slash the price of milk to $1 per litre in January 2010 has had enormous impacts on the farming industry, forcing them to sell up to 40 per cent of their milk, which costs 40 cents per litre to produce, at around 18 cents.
"The retail actions are certainly impacting the dairy farmers in a negative way, this combined with the uncertainties and other factors [impacting] dairy or other farming, it's making it unattractive for the next generation, because it's not profitable for my children,” Terry Toohey Australian Dairy Farmers Director, told the recent Food Magazine Industry Leaders Summit.
"If I was old and had children ready to take over the farm, I will tell them blue in the face not to come into agriculture.
“And that's pretty sad after 107 years on the one farm."
“It’s an unfortunate reality that milk price is a dollar.
“[It’s] simply unsustainable for all involved in the fresh food market.
“You can see the dairy farmers’ dairy families already suffering for Coles’ tactics.
“Tthe sheer size of the supermarket duopoly, over 75 per cent of the market is between the two powers, and they are wielding that [power].”
The Senate Inquiry into the supermarket powers struggled to get people to speak publically about the behaviours of Coles and Woolworths, something reporters, including Food Magazine, know all too well.
The Wesfarmers-owned Coles Supermarket group’s three per cent sales growth over the last quarter of the financial year ended 30 June 2012, placed them ahead of arch-rival Woolworths for sales for the twelfth straight quarter.
The real winners of price cuts
Ironically, while the discounting competition between the big two is the factor putting Australian food workers out of jobs and ruining once-viable farming operations, it is exactly this “value” that Wesfarmers managing director Richard Goyder attributed the growth to.
“Coles achieved total food and liquor sales growth of 4.6 per cent for the year and comparable sales growth of 3.7 per cent,” he said.
“The result was driven by sustained strong volume growth during the year, which accelerated in the fourth quarter as ongoing investments in value, quality and service were positively received by customers.
“This was evidenced by improved customer numbers and increased basket size.”
Managing-director of Coles, Ian McLeod, also weighed in with some out-of-touch comments.
“We have been particularly pleased with the continued strong volume growth,” he said.
“This confirms that our determined efforts to provide better quality, service and value are being welcomed by Australian consumers during a period of sustained pressure on household budgets.”
For thousands of Australians out of work due factory closed as a direct result of the supermarket price wars, the strain on their household budgets has only worsened, and while Coles maintains it has the interest of everyday Australians at heart, it is exactly these people that are being forced out of jobs due to the retailers’ actions.
Is the produce industry next?
Coles also reported that it is improving relationships with local fruit and vegetable producers.
Despite such declarations, the Australian produce industry is also suffering at the hands of the big two, and have previously admitted the cut-price fruit and vegetable offerings "has the making" of becoming the next milk price wars.
Do you buy Coles’ declarations that it is just working to deliver cheap prices to Aussie families? Or are you someone who has recently been put out of work by the supermarket powers?
The Queensland Government has announced plans to irrigate fertile land by using two untamed rivers out of the Gulf of Carpentaria, as plans to become Asia’s foodbowl take shape.
Prime Minister Julia Gillard announced earlier this year that the only way forward for Australia, in economic and agricultural terms, was to commit to becoming the ‘foodbowl’ for the rapidly rising Asian middle class.
The idea has been slammed by many within the industry, who say the PM is out of touch with reality and that current regulation is hindering the farming industry, not helping it, while others argue that Asia has already taken steps to ensure it will be able to feed its own people.
Some of these steps include Asian companies buying up prime agricultural land, leading to calls for a public register of ownership and a cap on the number of non-Australian that can invest in agricultural land.
On Friday a government report defended foreign investment in prime Australian agricultural land, and argued that the only way forward for the country is to embrace the rising Asian middle class.
The green paper for the National Food Plan has forecasted a rise of almost 80 percent rise in demand for food by 2050 and believes Australia should embrace the opportunity.
Under the outback Queensland plan, graziers and farmers are hoping to turn the black soil country lining the Flinders and Gilbert rivers into a hub for growing water-intensive crops including rice, cotton, beans and corn, according to The Courier Mail.
Up to 10 000 hectares of land would be opened up to irrigation under the plan, with 80 000ML coming from the Flinders and 15,000ML from the Gilbert in unallocated water reserves.
At an irrigators' forum at Hughenden yesterday, Queensland Natural Resources Minister Andrew Cripps said a that the decision provided a balance between economic development and water resource management.
Accolade Wines will cut 175 jobs by January 2013 when it closes its Australian bottling operations.
The major wine company, which produces brands including Banrock Station and Berri Estates, has entered into a deal with Treasury Wine Estates (TWE) to bottle its wines in Australia, and in turn, Accolade will bottle TWE wines in the United Kingdom.
TWE owns several popular Australian wine brands including Yellowglen, Wolf Blass, Penfolds, and Wynns Coonawarra Estate.
Accolades Wines chief executive Troy Christensen pointed to changes in market conditions and the need to ensure optimum efficiency as the reasons behind the decision.
He said there is a surplus of bottling capacity in Australia currently, and that while the decision will solve that problem, he understand the workers who will lose their jobs will not take it lightly.
At the Reynella facility in south Adelaide, 175 workers will be made redundant, all of whom will receive their full redundancy payments.
The company also said in a statement that it will offer further support to workers by assisting them in finding new jobs.
“For a number of years we have researched alternatives to avoid outsourcing our Reynella bottling and distribution facility, including relocating assets within the business,” the statement said.
“No other option delivered such long term benefits.
“We were faced with the difficult realisation that the best option for our business and for the Australian industry was to ensure that the most efficient facilities were fully utilised even if they were not our own.”
Transitioning to the new bottling and packing arrangements would begin in the coming weeks and will be completed by January next year, according to TWE chief executive David Dearie.
The National Union of Workers (NUW) members accepted a 12 per cent pay rise over three years from the Toll Group, which manages the warehouse on behalf of Coles, yesterday.
Despite a court ruling that they stop the blockade, the workers vowed to continue last week and into this week, until yesterday when they decided the agreement was finally “much better” than what they had previously been offered.
But Tolls said the agreed upon deal is for the same amount as what they first offered, just distributed differently.
"The total value of Toll's offer has not changed over the past two weeks,” Toll corporate affairs manager Andrew Ethell said.
“It remains an effective 4 per cent annual wage rise over three years.
"Arriving at this final negotiated agreement has resulted in shuffling the structure of how wages and conditions will be allocated, effectively reducing some conditions in order to be able to increase others.
"It is a shame the illegal blockade that's been in place for the past two weeks has delayed a resolution being reached earlier."
NUW secretary Tim Kennedy said the workers voted to accept the deal because it dealt with the central issues the workers have been fighting for, including the ability to earn rostered days off (RDO’s), public holiday agreements and shift penalties.
In lieu of a shift penalty for workers rostered on between 2pm and 10pm, the workers have agreed on a family allowance payment to be added to the deal.
"The union is very happy the workers, after a long two-week struggle, have been able to secure an agreement," he said.
The union’s argument was centred on discrepancies in workplace agreements between the Sommerton warehouse and other Coles warehouses.
"There is no doubt, in order to make certain we won these conditions of equal treatment, there had to be some give and take," Kennedy said.
The Federal Government released on Tuesday the green paper for Australia’s first-ever National Food Plan. According to Agriculture Minister Joe Ludwig, this plan “will ensure Australia has a sustainable, globally competitive, resilient food supply that supports access to nutritious and affordable food”.
Ostensibly, the plan is for the benefit of all Australians, but on closer inspection it is really a plan for large agri-business and retailing corporations. This should surprise no-one, given it was conceived at the urging of the former Woolworths CEO, Michael Luscombe, for a food “super-ministry” prior to the 2010 Federal Election. The plan’s early development was guided by a corporate-dominated National Food Policy Working Group, established after that election to “foster a common understanding [between the Government and the food industry] of the industry’s priorities, challenges and future outlook across the supply chain”.
The Issues Paper, released in June 2011, contained 48 questions, half concerning the need to develop a “competitive, productive and efficient food industry”. There was only one question about environmental sustainability. The nature of the “consultation” as a top-down, tightly-controlled process was clear, with the Government setting the parameters of acceptable topics, and corporate representatives having an inside and direct channel to decision-makers. The further liberalisation of trade in food and agriculture, for example, was not a matter on which the Government wanted the opinion of the Australian public; free trade was assumed to be of unquestionable public benefit.
Despite this unpromising trajectory, many members of the community engaged in good faith with the public consultation. Two hundred and seventy-nine written submissions were received, with several identifying the need for bold and transformative policy changes if Australia was to develop a sustainable food system. Melbourne University’s Victorian Eco-Innovation Lab, which produced the ground-breaking Food Supply Scenarios report in April 2011, commented that:
Substantial, unavoidable and imminent changes in our food supply systems … require fundamental shifts in how we manage land and resources for food production … These potentially non-linear changes mean the past is not necessarily a reliable indicator of the future and care must be taken in avoiding ‘lazy’ assumptions about the possibility of continuing in a business-as-usual trajectory.
Unfortunately the green paper is largely based on precisely such assumptions. According to the green paper, Australia “has a strong, safe and stable food system” and “Australians enjoy high levels of food security”; our food industry is “resilient and flexible” and we “have one of the best food systems in the world.” The paper focuses on our food industry “seizing new market opportunities”, reflecting the Prime Minister’s recent urging that we become “the food bowl of Asia”. Last week on The Conversation, Allan Curtis gently exposed that claim – which underpins much of the green paper – as a frankly preposterous example of wishful thinking.
Here we discuss some of the more significant flawed assumptions of the draft National Food Plan. These tend to be implicit, reflecting an underlying commitment to the free market, free trade, and constantly expanding production – an unavoidable imperative in a capitalist economy.
Assumption 1: Food insecurity will primarily be met through increased food production
The green paper makes some concessions to the multidimensionality of food insecurity: poverty, distribution inefficiencies, and political instability are mentioned, for example. Yet the overwhelming message is that more food must be produced, and that such production will, when combined with further liberalising agricultural trade, deal with food insecurity.
When the Food Plan was first announced, it was presented as an effort to “develop a strategy to maximise food production opportunities”. Now the green paper states that the first strategy to ensure Australia’s food security is to “build global competitiveness and productive, resilient industry sectors” positioned to “seize new market opportunities” created by anticipated rising demand.
Yet food insecurity is increasing in a world awash with food. In Australia, conservative estimates indicate that around 5% of the population experience food insecurity, although we produce enough food for 60 million people. Globally, the world produces enough food for 11 billion with a global population of 7 billion, and yet nearly 1 billion people are chronically malnourished, and as much as 40% of food purchased is wasted.
The green paper says little about the fundamental cause of food insecurity: inequality. Hunger – and other related social pathologies, such as the obesity pandemic – are the result of a corporate-controlled food system that distributes resources according to the ability to pay, rather than by need. The over-riding imperative of this system is to generate profits, not to feed people well.
Assumption 2: The future will look much the same as the past
The green paper states that:
even though Australia’s food supply is secure overall, we cannot be complacent in preparing for natural disasters, adverse weather conditions and other sudden and unexpected events … these events have the potential to temporarily disrupt food production and distribution and could expose some individuals, communities or regions to transient food insecurity
These transient risks are the only ones identified as explicitly threatening Australia’s food security. The green paper is equivocal about climate change impacts, citing ABARES models suggesting that agricultural productivity might increase with more rain in some scenarios. This flies in the face of recent detailed assessments by the Bureau of Meteorology and CSIRO which confirm a decades-long drying pattern along the east coast, and south-east and south-west regions.
Assumption 3: Farm incomes will be higher when more is produced
According to the green paper:
The real value of world food demand [is expected] to be 77 per cent higher in 2050 than in 2007 … This gives our food sector good prospects over the long term, due to our comparative proximity to Asia … and our existing strengths in commodities such as beef, wheat, dairy, sheep meat and sugar
The assumption here is that demand growth will outstrip supply, and so there will be a more or less permanent dynamic of increasing returns to Australian producers through higher volumes supplying niche markets in Asia. But any farmer knows that price-taking commodity producers suffer price reductions in a glut. Targeting niche markets, no matter how big they are, is a response to oversupply and price squeezes. In a free and unrestricted market, lower cost producers, quite likely from South America, will target these niches. The consequences will be more of the same for Australian producers – diminishing returns.
Assumption 4: Food prices adequately embody environmental, health, and social costs
It’s well known that markets externalise, or socialise, many costs associated with production and consumption. Nowhere is this more true than in the industrialised food system, where the “real costs of cheap food” are exceedingly high, but the green paper, with its relentless focus on the need for a competitive, productive, food industry is seemingly oblivious; the phrase “cheap food” is not mentioned, and at only one point is it acknowledged that fresh food is rising in price faster than unhealthy food.
Assumption 5: Food corporations and markets will solve the problems of inequity and social justice
We’ve noted earlier the central role that Government has signalled for Australia’s food industry in “feeding the world”. Yet by any measure, the food industry has failed to achieve the basic objective of maintaining a healthy population in this country, with current projections showing that nearly 80% of the adult population will be overweight or obese in little over a decade. The principal burden of the associated ill-health falls on lower socio-economic groups. It’s richly ironic that the green paper assigns a major responsibility for redressing this to the corporations who have profited so well from cultivating consumer preferences for unhealthy products:
the food industry has a key role to play in addressing health-related messages and is implementing initiatives to help Australians maintain a balanced diet … The Australian Government will continue to work with the food industry to change the dietary behaviours of Australians
Here as elsewhere, the green paper reads as though the GFC and its continuing reverberations never happened. Its rigid ideological adherence to “market-led solutions” (see below) keeps those companies, who are the principal source of the food system’s social, environmental, and economic dysfunctions, at the helm of the system’s evolution.
Assumption 6: The free market-based food system is efficient
According to the green paper:
The Australian Government’s overall approach to food industry policy is part of a general economic policy approach that aims to foster a flexible economy and a sound and stable business environment … A key objective of the market-based approach is to improve competition and productivity across the economy, allowing resources to gravitate to their most valued use. Competition in domestic industries can, in turn, improve international competitiveness of domestic firms by encouraging improvements in productivity, flexibility, innovation and efficiency
In truth, the “market efficiencies” are largely illusory. Cheap and easily accessible oil allowed the industrial food system to flourish, but this era is ending. Oil is an extremely compact and versatile energy source with no simple replacement. Biofuels are one of the market’s responses to the price rises of this dwindling resource (coal seam gas is another); but the corporate rush to produce them, underwritten by state subsidies and targets in the name of the “green economy”, has been identified as a chief cause of the mass suffering that occurred in the 2008 food crisis.
In short, contrary to the Government’s claims, the green paper is a recipe for increasing vulnerability, lack of resilience, and heightened inequality in our food system. A different approach, based on a different set of values and priorities, is required. That is why the Australian Food Sovereignty Alliance is inviting all concerned members of the public to join us in a participatory and democratic conversation to develop a food system that is truly fit for the challenges of this century.
We look to the the Canadian People’s Food Policy Project and the Scottish Food Manifesto as examples of what is possible; and we ask all who think there is more to food policy than meeting the needs of corporations, to join us in the months ahead as we develop a “People’s Food Plan” which will highlight best practice in creating a food system which is sustainable, healthy, and fair.
Comments welcome below.
Nicholas Rose is affiliated with the Australian Food Sovereignty Alliance, a not-for-profit association, incorporated in the Australian Capital Territory, whose mission is to work towards fair, diverse and democratic food systems for the benefit of all Australians.
Michael Croft is affiliated with the Australian Food Sovereignty Alliance, a not-for-profit association, incorporated in the Australian Capital Territory, whose mission is to work towards fair, diverse and democratic food systems for the benefit of all Australians.
The industrial umpire will again be brought in to deal with the controversial blockade by workers at a Coles warehouse in Melbourne, after they defied a court order last week and continued protesting.
Discussions continued over the weekend, after workers voted against an offer from the Toll Group, which manages the Sommerton site, on Friday.
The order handed down by the Victorian Supreme Court last week banned the National Union of Workers (NUW) and 25 individuals from continuing their action, which is preventing trucks entering or leaving the warehouse.
The initial order was handed down a week ago, and last Wednesday Justice Anne Ferguson extended the ban for a further seven days.
Barrister for the Toll Group, Stuart Wood SC, said it appeared one of the people named in the order was in contempt.
"The picket is still continuing, it has actually intensified," he told the court.
"There is a physical barrier across the entrance.
"There is evidence of some of the defendants still being involved."
According to Toll Group, management and staff tried entering the site on Wednesday morning, but were warned by police that it was not safe to proceed.
“Toll will not be taking any action at the union's blockade that endangers safety," Toll Group general manager of corporate affairs Andrew Ethell said in a statement.
The union said it had no control over the blockade, but also told the company they could arrange for some Toll people to access the site, Ethell alleged.
"The people blocking vehicles from entering the site are acting illegally, regardless of whether they have been named as part of a Supreme Court order or not," he said.
Suggestions that Coles would step in have also been quashed, with chief executive Ian McLeod saying the issues are not for the supermarket giant to resolve.
He said that while he is concerned that the blockade outside the site is continuing despite the court order.
"It is somewhat troubling when you've got … up to 200 people who actually want to go to work but have been denied the right to do so. I think that's concerning," McLeod told Fairfax radio on Thursday.
The NUW is calling for pay and entitlements to be increased for the site’s 600 workers to get them in line with other Coles workers.
It wants Coles to take part in enterprise bargaining agreement talks with Toll in a bid to break the stalemate.
But McLeod has ruled out a Coles intervention.
"That's not for us to decide,” he said.
“This is a dispute between Toll and their employees.”
The promise of receiving a sizeable redundancy payout is changing the scope of the working world, and according to Simplot boss Tom O’Brien, 20 per cent of his workers want processing plants to close for this reason.
As one of Australia’s largest food processors, Simplot works hard to stay afloat in the tough retail environment, but O’Brien has told Business Spectator and ABC News that the workers don’t even want to fight for the company and their jobs.
He believes big redundancy payouts are what is encouraging workers to stay in the one company, and that they are detrimental to the food processing industry in its current state.
"Every food manufacturer in Australia is getting ready to close plants in one form or another, it's just a matter of when," he said.
"We're getting no price increases whatsover, we've got the cost of non-tradeables growing rapidly in the market.
"The cost of power and water and everything else is just going up astronomically."
But John Short from the Australian Manufacturing Workers Union (AMWU), which represents the workers at Simplot’s Davenport and Ulverstone plants in Tasmania, has slammed O’Brien’s comments, arguing workers do want to keep their jobs.
"I think it's very disappointing. I don't know who he's talking to, but the people we talk to are very much dedicated and committed to the company," he said.
A new government report has defended foreign investment in prime Australian agricultural land, and argued that the only way forward for the country is to embrace the rising Asian middle class.
The green paper for the National Food Plan has forecasted a rise of almost 80 percent rise in demand for food by 2050 and believes Australia should embrace the opportunity.
The middle classes around the world will increase to almost 5 billion by 2050, 85 per cent of which will be in Asia.
Prime Minister Julia Gillard announced in May that Australia should gear towards becoming the ‘Asian foodbowl,” but farmers and agricultural experts slammed the suggestions, saying current regulation is hindering the industry rather than helping it.
There have also been calls for a public register of all investment in Australian farming land and companies, which were only spurred on by revelations in May that a company owned by the Chinese Communist Party wants to buy the entire Ord Expansion Development in the north of Australia.
But the government maintains that investment, foreign or otherwise, is crucial for Australia’s economy.
''Any reduction in foreign investment in the agricultural sector would likely result in lower food production with potentially higher food prices, lower employment, lower incomes in the sector and lower government revenue,'' the paper says.
The paper also acknowledges the confliction between farming and coal seam gas mining, and the importance of finding a compromise between them.
''The government is confident that mining and farming can co-exist without affecting Australia's food production capacity but recognises land use planning is a significant policy issue that must be considered carefully.''
It also suggests that a forum between the supermarkets and manufacturers needs to be established, to improve strained relationships cause by the supermarket duopoly.
And while the Australian Food and Grocery Council (AFGC) believes its Responsible Marketing to Children Initiative (RMCI) has been successful at reducing the number of advertisements for junk food directed at children, the report suggests these voluntary standards will have to be monitored by the government.
“The food industry is definitely part of the solution, particularly when you look at overweight and obesity, Cristel Leemhuis, Director, Preventative Health Policy Healthier Australia Commitment at the AFGC told the recent Food Magazine Leaders Summit.
“It’s not voluntarily, the consumer is demanding it.
“Consumers push these businesses, so they’re responding to that consumer demands.
“I’m a fan of minimum effective regulation if we do need it lets go down that track, but let’s see what we can do without the regulation to start with.
“Can we actually address the issue without regulation?
“That’s the path we should take first.
“If that doesn’t work then we should step into these other areas, but we really need to try this other area first before we just straight down to [regulation].”
A study recently published in the British Medical Journal (project Viva) has found that children born by caesarean section have a higher rate of obesity at age three than children born naturally. At first glance, how someone is born seems unlikely to cause obesity, so should expectant mothers considering a caesarean birth be worried?
The study recruited women during early pregnancy and then followed their children after birth (1,255 in total). Data were collected on a wide range of lifestyle and health factors from both parents and children.
Just over 20% of the children were born by caesarean section. Even after accounting for differences in birth weight and the mothers' pre-pregnancy weight, infants born by C-section had twofold higher odds of developing obesity. The authors postulate that a caesarean birth somehow alters our biology in such a way that there’s a greater risk of developing obesity.
A very basic view of obesity biology is that it’s a consequence of skewed energy balance – if you pump in more calories than your body needs, it will store the excess energy as fat. Although there’s a lot of truth in this model, it’s a gross oversimplification of how our bodies work. It certainly offers no explanation for why rates of obesity should differ between children born by different routes.
So we need to consider what other factors are involved in obesity and how they might relate to birth mode. The prime candidate among these is gut microbes.
Obesity can be readily induced experimentally by feeding a high-calorie diet to mice. This makes it sound like a cut-and-dried case for diet being the main factor. But the microbes that live in the gut (the gut microbiota) also contribute to our nutrition.
The involvement of gut microbiota in nutrition has been tested by keeping mice delivered by caesarean section in germ-free isolators to have them grow up with no microbes. Researchers found diet-induced obesity was extremely difficult to generate in the absence of microbes.
The killer experiment, however, was when researchers re-introduced microbes into these previously germ-free mice. Mice that were colonised with microbes from fat mice (who’d been fed the high-calorie diet) put on a lot more weight than those that were colonised by microbes from lean mice. This indicates that the microbes in our gut influence how much of the food we eat actually gets turned into fat.
So the risk factor is what gut microbes you have and what we really need to be asking is whether a caesarean birth change our gut microbiota. Addressing this question requires you take a great interest in poo, since much of it is basically gut microbes.
In healthy adults, the microbial community is stable over time, but individually distinctive – each of us has a unique collection of microbial mates. Even a brief sensory survey of healthy people pooing will confirm we all have individual differences.
How we get these differences is essentially a combination of what microbes we are exposed to (our environment), what food we give them (our diet) and time (our developmental stage). Babies born by caesarean section will definitely have a different initial exposure to microbes and this latest study forces us to consider the possibility that this initial difference could cause lifelong differences that predispose some to obesity.
Although birth is when we first encounter microbes, the process of acquiring a stable gut microbiota takes time. As any parent knows, an infant’s poo will change dramatically in texture, smell and even colour over the first year and introducing anything new to the diet often precedes an interesting experience. A stable microbial community isn’t formed until we have a fully developed immune system and an adult diet pattern – well after age three.
To assess the risks of a caesarean birth for later obesity we need to know the relative importance of birth mode and postnatal environment on microbial colonisation. Studies in both animals and humans suggest that diet and environment over the postnatal period are more important than events immediately around birth.
Those aspects of the postnatal environment that appear most important are infant diet (especially breastmilk as opposed to formula milk) and the gut microbiota of the people most closely exposed to an infant (both parents, any siblings and childcare).
Interestingly, the Project Viva study also found significant differences between paternal and maternal body mass index (children delivered by caesarean were more likely to have overweight parents) and breast-feeding patterns (children delivered by natural birth were more likely to have initiated breast-feeding and to have been breastfed for longer).
This fascinating study shows how environmental factors influence our insides. Whether caesarean deliveries drove the difference in obesity observed in the Project Viva cohort or were simply associated with other postnatal environmental factors is a question that requires further study. For now, I wouldn’t let worry about obesity trump other reasons for considering a caesarean birth.
Andrew Holmes receives funding from the Australian Research Council and the National Health & Medical Research Council.
The supermarket price wars have had many victims, and the latest to be impacted by the ruthless competition that is squeezing food companies out of business is iconic Aussie pie maker Four ‘N’ Twenty.
Yesterday the makers of Four ‘N’ Twenty pies, Patties Foods, which also manufactures Herbert Adams and Nanna’s brands, said the increase in private label will hurt its business, mostly likely beginning this year.
The pie maker predicts that in the second half of 2012, it will face much tougher trading conditions, as private label offering from Woolworths and Coles increase in numbers, pushing established brands off the shelves.
Both supermarkets have confirmed plans to rapidly increase private label products in the coming years, and as they do so, other manufacturers are seeing their products moved from prime positions on shelves, and disappearing altogether.
Very few manufacturers will speak on the record about the impact of the supermarket price wars, for fear their deletion from shelves will be speeded up if they do.
Even the Senate Inquiry investigating the power of the big two struggled to get people to speak, which is indicative of the power they wield over manufacturers and suppliers.
''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 recent Food Magazine Leaders Summit also came up against the same issues.
We invited food manufacturers and other food companies to participate in the day, aimed to identify the main issues in the industry and work towards improvement, but when it became known that the impact of the supermarket dominance would be discussed on the day, dozens refused to come, for fear of the retributions of being associated with anything discussing such issues.
Despite the pressure from the supermarkets, Patties has managed to continue to grow, mainly due to other more traditional pie outlets.
The company expects the 2012 financial year will deliver a net profit of between $19.2 million and $19.7 million, up from $18.4 in 2011.
Second-half net profit will almost definitely remain the same as the same period last year, however, showing the beginning of a decline in profits.
When Patties Foods released its 2012 first-half results it expected that, despite the difficult conditions, it was still expecting improved profits for the second half.
"The second half saw increasing pressure on margins in the In Home (supermarket) channel, particularly with the continued growth of private label products,” Patties said in a statement to the Australian Stock Exchange (ASX).
Managing director Greg Bourke said the company has been working hard on driving strong sales growth, and has increased manufacturing efficiencies maintained tight control over costs to achieve its results.