Two meat processing facilities approved in Australia’s north

Two abattoirs in Australia’s north have been approved, but according to Member for Kennedy, Bob Katter, the close proximity of the facilities will not be a problem.

One facility is near Darwin and the other in Cloncurrry, in north-west Queensland.

The Conclurry facility in the Northern Territory was approved by the state government earlier this month.

The meatworks facility will have the capacity to process 1000 animals a day.

On Wednesday the Australian Agricultural Company (AACo) announced it plans to purchase 600 hectares near Darwin for its northern abattoir project.

Currently there are not any major meat processing faculties located in the Northern Territory, top end of Queensland or Western Australia, so Katter believes the construction of two in relatively close proximity will not be an issue.

"I don't think [it will be a problem]. I really don't because there's room for one in Darwin, too," he said.

Katter said if the Katter Australian Party had been elected in the recent Queensland election, it would have ensured all graziers and cattleman in the Mid West and Gulf would have access to irrigation.

It would have justified the development of "two meatworks to service the Gulf and Mid West,” he said.

Katter said his proposal could "easily turn off half a million head of cattle a year," as the processing facility cuts the weight of the meat to one-third for easier transport to the Port of Townsville.

"It would double production, double carrying capacity, and they wouldn't have setbacks in a drought if they had irrigation on farms," he said.

"Why the government won't allow it is beyond my wildest stretch of imagination."

Coles and Woollies are bullying winemakers too: departing Winemakers’ Federation chief

Amid accusations that Coles and Woolworths are intimidating food manufacturers and produce growers so much they are too scared to even speak up at a Senate Inquiry, a leading Australian wine body has publically criticised the big two.

The anti-competitive and bullying behaviours of Coles and Woolworths are well known, and while countless food producers have discussed the damaging impacts of the supermarket duopoly on business with Food Magazine and other media outlets, almost all are too afraid to go on the record with their stories.

After it publically slammed the control the two supermarkets have on business more than once last year, Heinz declared on Friday that the relationships have improved significantly.

The comments come after a Heinz spokesperson told Food Magazine earlier this year that they were “trying to distance ourselves,” from the much-publicised criticism, which included  chief financial officer and executive vice president, Arthur Winkleback labelling the Australian supermarket environment “inhospitable.”

Now it’s the winemakers turn to publically oppose the behaviours of the major supermarkets, while everyone waits with bated breath to see if and how Coles and Woolworths will also punish them.

The supermarkets’ have both been accused of creating a culture of fear and intimidation among local wine producers, just as they have done in the food sector.

Stephen Strachan, who finished his role as the chief executive of the Winemakers’ Federation of Australia on Friday, would only speak to The Sun-Herald after his position had ended, which is inductive of the silo of silence in the industry.

''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.

According to Strachan, the bullying is not only felt by local winemakers and Coles and Woolworths also flexes its power over foreign suppliers.

Furthermore, he said, they also collect sensitive commercial information from wine producers, and use that information to bully rival suppliers into selling for lower prices during negotiations.

Food Magazine has contacted both Woolworths and Coles for comment on the accusations, but neither has responded at this stage.

 

As supermarket power rises, Heinz praises progress

One of the few companies to be openly critical of the supermarket duopoly in Australia, HJ Heinz, has apparently mended fences with Coles and Woolworths.

Amid a climate of fear and bullying behaviour by the major supermarkets, where even a Senate Inquiry is struggling to get companies to speak up, HJ Heinz’ head of Asia-Pacific, Christopher J Warmoth has discussed the improved relationships.

''In the past eight months, we've seen a stabilisation of this business and that comes down to three elements," he said.

“First, we've improved our relationship with the retailers and they have told us that they have noticed our increased ability to bring them real value,'' he said.

These positive comments come after the company’s chief financial officer and executive vice president, Arthur Winkleback told US analysts in August last year that the demise of many Australian companies can be attributed to the supermarket war and said they have created an “inhospitable environment” for manufacturers.

Then in November its executive chairman, chief executive and president, William Johnston, told investors the company has had to overhaul its business strategy in Australia to deal with the supermarket dominance of Coles and Woolworths.

The comments came amid an announcement by Heinz that it would be closing three manufacturing facilities in Australia meaning more than 300 local jobs would go.

But the food giant has since tried to distance itself from those statements, which earlier this year a spokesperson told Food Magazine had been taken out of context.

The Australian food manufacturing sector is struggling to survive the supermarket price wars, which are driving profits up, pushing products off shelves in favour of supermarkets’ private label alternatives and, according to the Transport Workers Union, killing people on the roads.

One in every four grocery items now sold in Australian supermarkets is private label and of those, about one in two is imported.

Staying on the good sides of Coles and Woolworths is a good business plan in itself, as failure to do so can spell the end of a business.

Countless producers and manufactures have shared their struggles with Food Magazine, but refuse to go on the record with their stories for fear that being critical of the major supermarkets would be suicide.

Australia is one of Heinz’s biggest markets, bringing in an estimated $1 billion last year.

In contrast to the comments made and financial hardship experienced by Heinz last year, Warmoth now says the company is doing well.

''Australia has also reduced cost on every front,” he said.

“We have five factories, we closed one and have downsized three.

“We had a record year by far on the supply chain productivity.

''Now we are not where we want to be in Australia, but we've made significant progress and we enter [next financial year] with a much stronger foundation.''

What do you make of the latest comments from Heinz? Do you think they’re sincere?

Where does the food sold in Australian supermarkets really come from?

One in every four grocery items now sold in Australian supermarkets is private label and of those, about one in two is imported.

The Age has conducted an investigation into the state of the supermarket sector, and the results would not surprise anyone in the Australian food manufacturing sector.

It found the rate of imported food products is increasing at a rapid pace, as the only way for the companies to provide their ridiculously low prices is to buy food produced in countries by cheap labour.

South Africa and Thailand, two countries notorious for lacking in workers’ rights and having extremely low wages, are two of the markets commonly used by the cheap food retailers in Australia.

Researchers from the Australian National University embarked on a mission to follow the supply chain of many private-label products sold in Australia, which found them in South African fruit processing factories and canned pineapple facilities in Thailand.

"One of the canneries made private-label products for over 100 supermarkets," researcher Libby Hattersley, who inspected the South African businesses, told The Age.

"They just slap the retailers' label on it and send it out to them."

Differing food safety laws a risk for consumers

While the ethical issues involved with sourcing food from such countries are becoming increasingly important to consumers, there are various other issues involved with these systems.

“[No Australian food manufacturers] 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,” Jennifer Dowell, National Secretary of the Food and Confectionary division of the Australian Manufacturers Workers Union (AMWU) told Food Magazine earlier this year.

“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.”

The issues with the Senate Inquiry

Dowell was heavily involved in the Senate Inquiry into the supermarket duopoly in Australia, which was set up to investigate the anti-competitive practices and bullying behaviour of the major supermarkets, which are pushing Australian companies out of business.

But ironically, or tragically, the proof was in the imported pudding, as the Inquiry struggled to convince manufacturers to speak up, as they were terrified of the repercussions, including being relegated to a lower shelf, incurring more fees or removed from the shelf altogether.

Australian food producer Dick Smith said the blame lands at the feet of supermarkets ALDI and Costco, who rely entirely on imported goods, when he fronted the Inquiry earlier this month.

He believes the other supermarkets embarked on a game of catch-up, which has led to the current situation.

Australian made: are people really willing to pay more?

In April, Smith joined a number of local food and beverage producers, including Glen Cooper, chairman of Australia’s largest beer brewer, in  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.

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.

While most Australians say they would prefer to buy Australian made, even if it comes at a higher price – indeed, at last check, a poll on The Age’s website showed 80 per cent said they would pay more for locally produced foods – the realities of the current economic climate are seeing more shoppers buying primarily on cost.

Coles and Woolworths maintain that they endeavour to source the majority of their food products from Australia, but one in two products in the Woolworths Select brand is imported.

It’s premium brand, Macro, has 85 per cent Australian products.

Coles will not release a figure on the percentage of its private label products that are sources locally, but The Age reports a source with connections to the business said it imports about one third of its own brand products.

The supermarkets like to toot their own horn when they do make a local supply deal, and blame it on a lack of Australian interest when they source from foreign markets.

"You'd be surprised how many times we get no one responding in Australia to our invitations to supply," Woolworths head of own brand Gordon Duncan told The Age.

It is notoriously difficult to get any Australian food manufacturers to speak on the record about the struggles, as they fear punishment from Coles and Woolworths, but Food Magazine is aware of numerous companies who are unable to supply to them due to their unrealistic demands.

Indeed, earlier this month Transport Worker Union (TWU) accused the major supermarkets of contributing to road deaths as they place unrealistic expectations on suppliers and drivers.

Coles recent deal with Simplot, the only remaining Australian-based frozen food processor,  to supply its house-brand vegetables, will apparently be so good for the industry they won’t even be able to grow the amount needed to supply both major supermarkets, according to Duncan.

The peak representative body, AusVeg, has labelled this “nonsense.”

Considering that in the last two years, fruit and vegetable exports have declined $200 million to $497 million, Coles’ comments are very optimistic.

Earlier this month the second Queensland tomato processor to go into administration this year left 40 employees out of work.

Bundaberg tomato farm, Basacar Produce went into voluntary administration, following in the footsteps of the nearby SP Exports, which collapsed in February, blaming the high Australian dollar and the supermarket price wars.

The SP Exports farm was the biggest in Australia before it collapsed, leaving hundreds of people unemployed.

While the Simplot-Coles deal is being touted as positive for the produce industry, it could mark the beginning of issues for the frozen vegetable industry that have plagued fresh produce suppliers for some time.

With the dairy industry still reeling, Coles slashed the price of produce in half in February and AusVeg spokesperson Simon Coburn told Food Magazine it “had the making” of the milk price wars.

“Long term this could deliver lots of damage to the industry,” he told Food Magazine.

“Depending where the reduced retail price is going to be absorbed, whether it’s a small grower or a big business, this will damage them long term.

“Eventually it will come back to growers and that’s where they’ll get into trouble.

“These prices aren’t sustainable if they’re passed onto growers, small operations and even big ones won’t survive this.

How do you feel about buying imported versus local products? Do you think we need a Royal Commission into the state of the supermarket duopoly? 

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

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

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

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

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

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

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

 

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

 

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

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

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

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

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

 

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

 

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

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

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

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

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

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

People in regional Australia more likely to consume alcohol, be obese

A new Australia-wide study has found that people living in rural areas are more likely to consume alcohol and be overweight and obese.

The Roy Morgan State of the Nation Report 11 looked at 10 987 city-dwellers across Australia and compared them to 8 049 living in country regions.

During the study, which ran for 12 months up until March this year,  found 72.2 per cent of people living in the country consumed alcohol in an average four-week period, while 68 per cent of city slickers drank alcohol in the same period.

The availability of new, fancy drinks in the country could be one reason they consume standard beers, spirits and ready-to-drink products (RTD’s).

People living in the cities, on the other hand, have more availability to a range of different beverages and are more likely to drink wines and ciders.

The health and weight impacts alcohol is known to have impact the country drinkers, with 35 per cent of people considered to be overweight, almost five per cent higher than the number of people of an acceptable weight.

By comparison, almost 40 per cent of city dwellers are considered to be an acceptable weight, and there are less people considered to be overweight than in the country.

The availability of public transport in urban areas also contribute to people’s weight and health, according to numerous studies, which show that those who use public transport take, on average, over 200 extra steps than their driving counterparts, meaning they are more likely to reach their recommended daily exercise targets.

Research  by Environment and sustainability expert  and adjunct professor fat Curtin University ,Darren Bilsborough, said public transport has significant economic and health benefits.

'When you get rid of cars, you need fewer roads and you can use that space for other things,” he said.

“The real issue is getting more people more active more quickly and to do that you need to get more cars off the road and get more public transport working.”

Beyond issues of transport and alcohol, the awareness of health and exercise is much higher in city areas, according to Norman Morris from Roy Morgan.

 “The State of the Nation report also identified reduced participation in sport and exercise for country residents compared to those in the city, as well as less agreement with healthy eating attitudes, such as thinking about calorie consumption and concern for holesterol levels,” he said.

“The increased prevalence of drinking, and a larger body mass among country residents is concerning given the reduced medical services available in rural areas.

“Although, as part of the focus on rural Australia, a Roy Morgan Poll telephone survey on country residents found that only 5 per cent considered health to be the most important issue facing Australia today.”

Earlier this week, a nation-wide survey by the Foundation for Alcohol Research and Education (FARE) found almost 80 per cent of Australians think that, as a nation, we have a problem with alcohol.

 

Potato farmers call for investigation into McCain’s

McCain's has been accused of ripping off Tasmanian potato farmers, and a leading agricultural group wants the Australian Competition and Consumer Commission (ACCC) to investigate.

According to farmers who supply potatoes to McCain’s, 28 of them have been told they will not have contracts in the upcoming season, and in further breach of the growers’ collective, the fast food processor has also allegedly been negotiating lower prices with a select number of growers.

Previous potato contracts with Heinz have been negotiated by the growers’ committee, but the remaining 15 will now have to negotiate individually and sign confidentiality agreements, according to farmers.

"I think it's just a very poor way of doing business," Potato farmer Richard Bovill told the ABC.

"I think they just haven't had the courage to come out and deal with these people in difficult situations."

The industry believes the individual negotiations will force farmers into lower prices.

Graham Harvey from McCain’s told the ABC contracts are still being negotiated and collective bargaining is voluntary.

"Certainly numbers aren't final and to be quoting number of growers that have been cut and price reductions is just speculation at this point in time,” he said.

McCain’s processing plant in Smithton is experiencing less work as the demand decreases, like so many other food manufacturers in Australia recently.

According to Tasmanian Farmers and Graziers Association's Andrew Craigie, potato farmers are now at a loss about where to go from here.

"The ones I've spoken to are absolutely shattered," he told the ABC.

"There seems to be no rhyme or reason at why some were approached and some weren't approached, so they're left very much in the lurch that they have nobody to sell potatoes, possibly, to next year."

Sustainable Agricultural Communities’ Mike Badcock wants the ACCC to investigate the decisions, which he says are unfair.

"This is taking competition clean out of the system," he said.

"The farmers are having to sign an agreement where they will not be releasing what tonnage they get and what price they're going to get and it's splitting the grower organisations to smithereens."

Federal Government provides $1m funding to improve dairy technology

Dairy Australia has received $1 million from the Federal Government to conduct research to assess energy efficiency on dairy farms nation-wide.

As the national services body for dairy farmers and the industry, Dairy Australia helps farmers adapt to a changing operating environment, and work towards a profitable, sustainable dairy industry.

The funding will provide over 900 farmers with information and support to improve farm energy efficiency, hopefully cutting costs for individual farmers and larger organisations, who are struggling to compete in the current retail environment.

Earlier this month, dairy farming was rated the second worst job in the world, based on physical demands, work environment, income, stress and hiring outlook. 

In April, Western Australian farmers met with Wesfarmers boss Richard Goyder to discuss the impact of the milk price wars on production and try to find a solution.

The farmers want fairer pricing strategies from the group, which includes Coles, and last week the WA Farmers Federation passed a motion to boycott Wesfarmers and its subsidiaries.

The WA Farmers Dairy Council say the “predatory pricing” by the major supermarkets have devalued the industry.

The Australian Dairy Industry Council’s project is also supported by the Australian Dairy Industry Council, milk processors and state agencies.

Manager of Dairy Australia’s Natural Resource Management Program, Catherine Phelps, said the cost of using energy is a major concern for farmers and other workers in the dairy industry.

 “The conditions are right for a very effective national project,” she said.

“The secured funding would help deliver energy assessments to all eight dairy regions across Australia, tailoring it to meet local needs.”

Some of the recommended options will most likely include changes to management practices, optimisation of current equipment and capital investment, Phelps explained.

50 per cent sold with 51 weeks to go before AUSPACK PLUS 2013

AUSPACK PLUS organisers are continuing to surpass their KPI’s for the 2013 exhibition with over 3200 square metres of space already sold and there is still 51 weeks until the show opens.

According to Luke Kasprzak, Event Manager, exhibitors that have signed include packaging and processing machinery companies, plastics manufacturers, processing equipment suppliers and leading labelling and coding agencies in Australasia.

“Companies that have already booked stands include ERC Packaging, Australis Engineering, FlexLink Systems, Festo, JMP Australia, HMPS, ABB Australia, A&D, Accuweigh, Laser Resources, Result Packaging, ITW Zip-Pak, Rhima Australia, Plastral and many more,” Kasprzak said.

As Mike Phillips, Managing Director, ERC Packaging said ‘they are pleased to once again be taking part in AUSPACK PLUS and are looking forward to introducing just some of their many products to the Sydney market.’ 

“We are looking forward to participating in the Sydney event and promoting not only our expansive range of bag sealing machinery, induction sealers and shrink labelling machines and labels but we will also be demonstrating our expanded range of container sealers including the Modified Atmosphere (MAP) range,” Phillips said. 

Peter Gustafson, Managing Director, Australis Engineering, added that they are exhibiting at AUSPACK PLUS 2103 because it brings together the decision makers across the FMCG sector.

“AUSPACK PLUS has rapidly become the preeminent tradeshow in Australia and therefore an un-missable event. By exhibiting at AUSPACK PLUS 2013 Australis Engineering benefits from exposure to the right industries and most importantly the decision makers in those industries and will use the event to showpiece our Mini Linear Palletisers and Multi-Axis Conveying solutions,” Gustafson said.

Peter Hutchings, Managing Director of FlexLink Systems said he booked his 2013 exhibition space due to the highly successful exhibition stand they had in 2007, 2009 and 2011.

“At AUSPACK PLUS 2103, FlexLink Systems looks forward to showcasing a comprehensive range of conveyor systems including our new WL wide conveyors, stainless steel solutions, software, line control and pallet systems,” Hutchings said.

“FlexLink Systems sees this exhibition as a fantastic way to communicate and demonstrate our company’s products and capability to our broad range of customers and potential clients.”

AUSPACK PLUS 2013 is a ‘must-attend’ exhibition on the Australian Packaging and Processing calendar and will be held at the Sydney Showgrounds, Sydney Olympic Park from the 7th to the 10th of May 2013.

AUSPACK PLUS is owned and presented by the Australian Packaging and Processing Machinery Association (APPMA), Australia’s only national packaging and processing machinery organisation.

To receive a prospectus on exhibiting at AUSPACK PLUS 2013, contact Luke Kasprzak, Event Manager, 02 9556 7972 or LKasprzak@etf.com.au

Tasmanian government invests $2.5m to speed up battery hen and sow stall bans

The Tasmanian government has announced plans to bring forward bans on battery hens and sow stalls.

Tasmanian Agriculture Minister Bryan Green has confirmed no new battery hen operations will be opened, and the existing number of pens in production will be capped.

Despite the nation-wide phasing out of gestational stalls for sows, to be complete by 2017, the Tasmanian government will invest $2.5 million over two years to speed up the ban so that none of the crates are used by mid next year.

A spokesperson from Australian Pork Limited, Australia’s peak pork representative body, told Food Magazine earlier this month that banning the sow stalls isnot as simple as "walking into a room and turning of a light.”

Almost 18 months after pork producers agreed to ban steel pens, a third of pregnant sows are no longer confined to the small stalls and more piglets have been “born free” since 2010, when pork producers agreed to voluntarily ban the use of sow stall use by 2017.

Figures from Australian Pork Limited, show that one in three sows now spend their pregnancies outside gestation crates, but animal welfare activists say more can – and should – be done.

Many pork producers across Australia have already voluntarily phased out the use of sow stalls, but the cost and time implications mean that it is unrealistic to force farmers to change before the 2017 deadline, the Australian Pork Limited spokesperson told Food Magazine.

The Tasmanian Budget revealed the $2.5 million will help farmers to "respond to market trends that indicate consumers are increasingly sensitive to animal welfare".

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 also announced earlier this month that it will only use animal products that come from free-range farms by 2017.

Tasmanian egg farmer John Groenewald told the ABC he was given only two weeks notice of the phase-out plans.

"For the government to say to consumers this is how you will go, instead of encouraging of encouraging consumers to go a particular way, it's quite a significant difference," he said.

"Cages are 65 per cent of the eggs sold in Tasmania, and I don't think it's a particularly smart move to say you can't buy them".

"We've got the issue of write-down of existing plant and equipment and replacing it with alternative production systems. We're talking millions of dollars here."

Man killed by fall in grain carrier

A 50-year-old man died on Saturday when he fell into an empty grain bulk carrier in the Port of Newcastle.

The Hamilton man had been repairing metal inside the empty grain carrier when he fell a considerable distance from an elevated platform, according to Police Inspector Darryn Cox.

Ambulances arrived on the scene shortly after the fall, which occurred about 8:30am Saturday morning.

The man’s name has not yet been released and government authority and WorkCover representatives attended the scene over the weekend.

A spokesperson from the Newcastle Port Corporation said police inquiries are continuing and a report is being prepared for the coroner.

New regulations to ensure welfare of animals in NSW abattoirs

New South Wales has unveiled new regulations in state abattoirs to ensure the wellbeing and welfare of animals.

The new legislation will require a designated Animal Welfare Officer to be on the premises of any abattoir to oversee and be accountable for the welfare of animals.

Yesterday the NSW Minister for Primary Industries, Katrina Hodgkinson the new “animal welfare package” will significant improve the treatment of animals in abattoirs and Animal Welfare Officers will be required to undergo thorough training.

“Only employees that have undertaken specific animal welfare officer training will be eligible to be designated”, she said.

By 1 January 2013, all domestic abattoirs will be required to have a trained Animal Welfare Officer on the premises while processing is occurring.

The appointment of Animal Welfare Officers is part of a range of changes being implemented by the NSW government.

The treatment of pregnant sheep has been widely criticised, and the use of gestational pens has been slammed by welfare advocates.

Many operators have already begun phasing out the gestational crates, and the industry had pledged to have their use completely stopped by 2017.

Despite calls from Animals Australia to bring the changes forward, a spokesperson from Australian Pork Limited told Food Magazine it is “not as simple as walking into a room and turning off the light.”

“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,” the spokesperson said,

“Then they need finances to undertake the changes.”

Other conditions to be imposed on domestic abattoirs include all NSW domestic abattoirs complying with the mandatory adoption of Section 2 of the “Industry Animal Welfare Standards for Livestock Processing Establishments preparing meat for human consumption”, 2nd Edition.

All relevant employees will also be required to complete training in the “stunning, sticking and shackling” code set out by the Australian Meat Industry.

Several abattoirs have hit headlines in the past year over allegations of cruelty and mistreatment of animals.

The Hawkesbury Valley Meat Processors has been ordered to pay $5 200 and will be placed on the Food Authority’s Name & Shame register after a NSW government investigation found the abattoir was breaching its licence conditions.

In February the state government launched a full investigation into operations at the meat processor located in Wilberforce, following the release of footage showing pigs being beaten with metal bars and sheep being skinned while still conscious.

The RSPCA investigation into alleged mistreatment of animals is still ongoing.

The revelations followed the discovery of an illegal slaughterhouse in Victoria  which led to criminal charges, as well as a broiler farm that was found to be underfeeding chickens causing them removed from the premises.

There is also much debate about the increase in meat being produced to meet Jewish and Muslim requirements, both in Australia and overseas, with opponents saying the slitting of the animal’s throat without stunning to comply with religious beliefs is cruel.

But Dr Shuja Shafi, deputy general-secretary of the Muslim Council of Britain, said earlier this month that there is a "lot of confusion" over Halal meat.

He said animals can be stunned before slaughter and still be labelled Halal.

"Over 90 per cent of Halal meat is stunned before slaughter," he said.

In October, Australian agriculture ministers failed to resolve discussions over ritual slaughters, meaning exemptions that allow some Australian abattoirs to conduct slaughter without prior stunning will continue.

There are 12 abattoirs in Australia that are exempt from the regulations that say animals for consumption must be stunned before they are slaughtered.

The exemptions are on religious or cultural grounds, but animal welfare groups want to practice stopped altogether.

The council released a statement following the meeting, saying ministers have reviewed the results of a two-year consultation process with stakeholders and have considered the science involved and the views of religious groups, but could not reach a conclusion.

Up to 250,000 animals are killed without prior stunning in Australia every year under the religious slaughter exemptions and the RSPCA has rejected claims that stunning is not allowed on religious grounds, saying stunning is accepted by the Islamic community and Jewish community and no reason existed for un-stunned slaughter to continue.

The new measures in New South Wales will ensure the meat industry is heading in the right direction, Hodgkinson said.

“These tough new measures are being introduced to foster a culture in which abattoir management and employees fully understand and implement procedures that consistently comply with animal welfare standards.

“The NSW Government will also introduce an additional annual audit specifically focussing on animal welfare compliance and develop a sanctions policy to address any non-compliance with these requirements.”

 “This Government has listened to community concern about animal welfare standards in domestic abattoirs following the incident at Hawkesbury Valley Meat Processors in February this year, and now we’re acting to ensure animal welfare standards in domestic abattoirs are improved”, Hodgkinson said.

Are Coles and Woollies bullying the major TV networks too?

While everyone in the Australian food manufacturing industry is aware of the bullying behaviour of the major supermarkets, it seems they are also now impacting Australian TV networks, which are declining to screen ads criticising Coles and Woolworths’ stake in pokie machines, but refusing to say why.

The advertisement, which point out that Coles and Woolworths own “more dangerous pokie machines than the five largest Las Vegas casinos,” shows a woman unwittingly spending excess money at the supermarket checkout, which has been changed to look like one of the gaming machines.

It also targets the “Fresh Food People,” slogan, changing it to “The Pokies People,” and also uses the Woolworths Everyday Rewards logo, which it launches today.

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The advertisement, created by GetUp! is not being screened by the major TV networks in Australia, but none of the stations have explained why.

A spokesperson from the advocacy organisation told Mumbrella they have not been given a reason why they won’t show the ad.

Food Magazine has contacted Channels 7, 9 and 10 this morning, but nobody was able to provide any answers.

As the Senate Inquiry into the impact of Coles and Woolworths’ anti-competitive behaviour is having on the food industry struggles to get witnesses to comment, for fear of being punished, it seems the major supermarkets are throwing their weight around in an increasing number of sectors.

Calls to Coles and Woolworths have not been returned.

The far-reaching impact of Coles and Woolworths has long been documented, and many are highly critical of the stake they have in various sectors.

The Senate Inquiry is slowly gaining some information about the issue, but most food companies are still too afraid to comment on the actions of the supermarkets.

Do we need a Royal Commission into the power of the major supermarkets in Australia?

The impact of the falling Aussie dollar on food producers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Visy accused of using Hell’s Angels for debt collections

Packaging company Visy has labelled reports that it uses Hells Angels bikie gang members as debt collectors as “nonsense.”

According to Victorian newspaper The Herald Sun, a whistle-blower has revealed a connection between the bikie gang and the packaging company.

Visy allegedly pays the Hells Angels a retainer to ensure bikies are available for the company to use as “problem solvers” when required.

The Herald Sun reports that the senior police sources detected the connection in police intelligence files and detectives are now investigating the ties.

Superintended Gerry Ryan, head of bikie gang Taskforce Echo wouldn’t comment on specific reports, but did say police are aware of some questionable activity since debt collector regulations in Victoria changed last year.

"We are monitoring this closely," he told The Herald Sun.

"Taskforce Echo has received recent intelligence of instances where members of outlaw motorcycle gangs have been used to collect debts from individuals and businesses.

"We are monitoring these activities closely and will act swiftly if offences are being committed, including the use of physical force, harassment and intimidation tactics."

Last year the Victorian government changes the regulations for debt collectors so that they don’t have to be officially registered to undertake the role.

The move has been widely criticised, with opponents saying that without monitoring or registration, individuals or companies could pose a significant threat to those in debt.

According to a former senior employee at Visy, the connection with Hell’s Angels has been in place for years and was personally approved by founder Richard Pratt, who died in 2009.

These links first emerged in the County Court in 2007.

The former employee alleges that Visy was owed significant sums of money by criminals connected to the fruit and vegetable industry, and when they refused to pay up, the packaging company decided it had to meet muscle with muscle.

"So Visy kind of had to find someone of equal status to the market heavies to collect what was owed by the sort of people who just ignore requests from traditional debt collectors," the whistleblower said.

"A senior Visy employee knew a couple of Hells Angels through a former job.

“He approached them and that's how the relationship started, with Richard Pratt's knowledge and approval."

Image: News Ltd.

Coles and Woollies not entirely to blame for supermarket wars, Dick Smith tells Inquiry

Dick Smith has warned against forcing the break-up of Coles and Woolworths, saying it would only further damage the food sector.

Speaking at the Senate Inquiry into the Australian food processing sector this morning, the entrepreneur also said government protection of the food industry, by enforcing a quota of Australian products, would be a positive move.

Industry protection funds, similar to those in the car industry, could be another viable option, he said.

In his submission to the Inquiry, Smith blamed the current supermarket climate, which is pushing Australian companies and farmers out of work, on rich foreign companies, namely ALDI.

He said dividing up Coles and Woolworths will not improve the situation “because I think they will just become uncompetitive when they become small with the internationals we allow them to compete with.”

Smith voiced his concern that the current “extreme capitalism” environment will lead to WalMart and Costco being the only supermarket companies in the world.

He told the Inquiry he does not believe the infamous milk price wars, which saw Coles drop the price of private-label milk to $1 a litre and Woolworths quickly follow suit, was either of their faults, but rather the blame is squarely at the feet of foreign-owned cheap food retailers.

''I think Coles and Woolworths were reacting to the situation that Aldi and Costco have come here,'' Smith said.

He also wants penalty rates in Australia looked at, and says a reduction in the rates would improve our competitiveness.

''Do we value our country towns?” he asked

“Which I do, do we want to go to these country towns and find them boarded up?

“Because our farmers are paying $20 an hour for labour, (and) will never be able to compete with people paying $5 an hour.

''But don't blame Coles and Woolworths for it, I think we are getting off the track…I think it is the fact consumers want the cheapest prices.''

Smith maintains Australians would readily pay slightly higher food prices if it ensured the future of the food industry.

Unfortunately, recent studies have shown that while most Australians say they would like to buy Australian produced and processed food, the main contributing factor is low price.

Similar rules to those in television broadcasting which impose a certain quota of locally-made content, would be effective in the supermarket sector, he said.

''One idea that I heard a number of days ago which could have potential is that we require Australian supermarkets to have a certain percentage of their sales, say 25 per cent, to be from Australian-owned processors and made and grown in Australia,'' Smith said.

''The advantage in doing that is it will create a level playing field.''

Last month Smith, along with Greg Cooper, chairman of Australia’s largest beer brewer started calling for a dedicated “Australian made” aisle in supermarkets to allow shoppers to easily understand which products are locally made and produced, and therefore keep local industries alive.

The current packaging and import regulations leave most consumers confused, they said.

Smith predicts that ALDI’S share in the supermarket sector, currently sitting at 8 per cent, will increase gradually over coming years.

 

300 more jobs slashed in dairy sector: Murray Goulburn’s profit declines

Australia’s biggest dairy foods processor will slash 300 jobs to lower costs in the increasingly difficult dairy industry.

Murray Goulburn, a co-operative owned and controlled by dairy farmers turns a third of Australia’s milk supply into diary products which are then sold domestically and to export markets.

It recently achieved praise and appreciation as a price leader in the local market, after increasing the price it paid for milk products at the farm gate.

But the pressure on the dairy sector from supermarkets and importers has led to a decrease in Murray Goulburn’s profits.

Murray Goulburn, the maker of Devondale butter and Cobram cheese will cut the 300 jobs to lower costs in the increasingly difficult dairy industry.

It conducted a detailed review of its head office and processing operations before deciding to eliminate 12 per cent of its workforce.

 

The 300 jobs will come from various parts of the business, with 168 positions from processing sites and distribution centres lost, 59 from the head office and the remainder through natural attrition.

Those in processing and distribution roles will be made redundant by the end of June and the head office roles will become redundant by September.

Managing director Gary Helou blamed the decline in world market prices as a result of higher global milk supply as the main reason for the job losses.

He said the company needs to improve its manufacturing efficiency, slash head office costs, increase its global competitiveness and deliver higher farm-gate prices, and these changes will begin some of these improvements.

"These are difficult but necessary decisions to ensure that Murray Goulburn can remain competitive,'' he said.

“It is in the interests of our suppliers, shareholders, employees, communities and customers that MG remains a strong business into the future.''

The company has promised employees full entitlements.

Image: The Herald Sun

Dick Smith fronts Senate Inquiry into food industry

Australian entrepreneur Dick Smith will front the Senate Inquiry into the food processing industry and supermarket dominance today.

The Inquiry has come up against problems getting people and companies to participate in the process, as the supermarkets bully them into silence through their market control.

Smith is one of the few who is openly critical about not only the anti-competitive practises of the supermarkets, but also the government policy that is ruining the entire Australian food industry.

The case against ALDI

He  has taken a slightly different angle in his submission to the Inquiry, effectively blaming foreign-owned supermarket ALDI for most of the problems in the supermarket sector.

“ALDI’s lower prices primarily come from having lower labour costs, that is, they employ less Australians,” Smith writes in his submission. 

“When Coles and Woolworths follow this particular trend, (as they will be forced to) where in a large supermarket you might only have one or two Australians employed our food prices may be slightly cheaper but in the long term our taxes will  very likely go up to pay for the social services of people who no longer have jobs.

“When ALDI stocked a limited range of products there was hope that the Australian owned retailers could survive because they could sell the other necessities that were required, place a higher price on those and obtain an extra margin to cover their extra staffing overheads. 

“The alternative was to go broke.

“That’s  now  all changed.  

“ALDI have announced that they are going to increase their product range so a typical Australian family can buy all of their products in an ALDI store. 

“This will result in Coles and Woolworths either following ALDI further on this lower cost, 90% private label, “lack of choice” model or losing substantial market share and eventually failing.”

Woolworths and Coles are already increasing their private-label products at a rapid pace, pushing Australian companies out of business and placing unfair demands on producers and transporters.

Supermarkets killing drivers

Yesterday the Transport Workers Union (TWU) accused the major supermarkets of causing road deaths by forcing truck drivers to drive for unsafe lengths of time and meet unrealistic deadlines.

"The union is saying very clearly to Coles and the other retailers that [their] practices have to change, that they are literally killing people on our roads because of the economic pressure," TWU federal president Tony Sheldon told ABC News.

"What happens with Coles and other major retailers with dominating the market at 32 per cent of road transport tasks, is that they say to manufacturers, they say to farmers and they say to transport operators that you've got to do this work the cheapest and the fastest way you possibly can.

"They're price takers, which means the trucking industry either makes the decision to do the work or they don't have a job."

Collapse of Australia's beetroot industry

Smith points towards the beetroot industry as a prime example of the damaging impact the ridiculously low prices have on Australia.

“As an example, for many decades, a simple can of Australian grown beetroot has sold for about $1.50 in our supermarkets and this has allowed a viable farming and  processing industry to exist,” he said in his submission to the Inquiry.

“The cost price of such a can is about 90 cents, the remainder being the supermarket overheads and profit margin. 

"Not at any time in the past few decades have I  heard of consumers complaining about the price of a can of beetroot. 

“In fact, it’s about half the price of a cup of coffee and I find it truly amazing that it could be so cheap, considering that Australian award wages and conditions are included in the price.

“Notwithstanding the lack of pressure on price, ALDI started to sell beetroot at 75 cents a can.   Immediately, Coles and Woolworths matched the price, as they had to.  

“ALDI proudly claimed that the beetroot they were selling was from Australia however they did not state that this would basically sound the death knell to our beetroot growing and processing industry.

“Within a short period of time, Heinz announced the closure of its beetroot processing plants in Australia, sacking hundreds of workers and Australian farmers were ploughing their beetroot crops back in the ground. 

“Heinz announced that their beetroot from now on will be grown and processed overseas.

“At the present time, there are still stocks of Australian beetroot at 75 cents a can, but it’s obvious that once these go, if the price is to remain the same, all beetroot in future will come from overseas. 

“We will have lost a complete industry, but this didn’t happen  because of pressure from consumers. 

"This is an important point. 

“It happened because one of the most astute examples of modern “extreme” capitalism, fully foreign owned ALDI, decided to flex its power.”

Smith said another differentiating factor between ALDI versus Coles and Woolworths is that the latter two are publically-listed companies, dependant on and accountable to shareholders, whereas ALDI is privately owned by a German company.

The “highly secretive” ALDI is therefore creating an uneven playing field, he said in his submission.

"Intentionally vague" labelling

He also takes aim at the labelling laws for country of origin, claiming they are deliberately misleading.

 “The current food labelling laws in Australia are intentionally vague so the requirements are accepted by the large multinational companies who  have political clout,” he said. 

“Although there have been campaigns such as the “Australian Made” mark, this was in reality an indication that the majority of the cost of production of a product was made up with Australian content. 

“For example, if the cost of a jar, a lid, label and an ingredient such as sugar represented greater than 50% of the total cost, but the primary ingredient (say, the strawberries in strawberry jam), was imported, the label could  still  state  “Australian Made”.

“In more recent times many labels bear the words “Made in Australia from imported and local ingredients”.  In this case, the local content may be very small.”

Smith’s own company, which produces food ‘as Australian as you can get” has felt the impact of the obsession with cheap, often imported food, and is personally watching his products getting pushed out of the market.

“Turnover peaked at $80 million per year in 2002 and has now dropped to $8million per annum as most Australians move to lower prices,” he said of his company, Dick Smith Foods.

“It’s interesting to note that the prime reason Coles have refused to stock our products is that  they are about 30 cents more expensive, and they believe Australian consumers will not  support this extra cost.”

A statement from Senator Richard Colbeck, the Liberal Senator for Tasmania who called for the Select Committee last year, said he is pleased that the Inquiry has secured both Coles and Woolworths to appear as witnesses at a subsequent meeting in Canberra next week.

The committee is due to release the findings of the Inquiry by 30 June.

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

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

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

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

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

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

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

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

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

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

Back to basics

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

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

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

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

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

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

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

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

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

Milking the dairy industry

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

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

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

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

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

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

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

Dairy farming second worst job in the world

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

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

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

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

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

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

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

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

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

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

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

The importance of five

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

 

 

 

 

Supermarket price wars are killing drivers: transport union

The supermarket price wars are claiming more victims than just food manufacturing facilities, with accusations from the Transport Workers Union (TWU) that the pressure is forcing truck drivers to drive unsafely, leading to road deaths.

TWU federal president Tony Sheldon told ABC News that the tight deadlines forced on drivers are unrealistic and forcing them to drive unsafely.

"The union is saying very clearly to Coles and the other retailers that [their] practices have to change, that they are literally killing people on our roads because of the economic pressure," he said.

"What happens with Coles and other major retailers with dominating the market at 32 per cent of road transport tasks, is that they say to manufacturers, they say to farmers and they say to transport operators that you've got to do this work the cheapest and the fastest way you possibly can.

"They're price takers, which means the trucking industry either makes the decision to do the work or they don't have a job."

In a bid to shine some light on the dangerous impacts of the major supermarkets on drivers, the union will begin a series of supermarket protests in Sydney, Melbourne, Brisbane and Perth today.

He said the larger transport industry is being impacted by the behaviour of the major supermarkets.

"When the two big gorillas make a decision, and particularly with the aggression of Coles, it means a knock-on effect occurs right across the market, right across industries above and beyond retail," he said.

Is Coles the ringleader?

It’s not the first time Coles has been identified as the main instigator of the anti-competitive and bullying behaviours currently plaguing the food industry, with many in the sector believing Woolworths simply has no choice but to match Coles’ prices and attitudes.

Last year, Coles was the first to drop the price of milk to $1 per litre in the now-infamous milk price wars, and earlier this year it slashed the price of produce in half.

The impact has significant flow-on effects for food manufacturers, growers and suppliers, who cannot maintain a business with prices so low.

Earlier this year national secretary for the food and confectionary division of the Australia Manufacturing Workers Union, Jennifer Dowell discussed the damage the supermarket price wars are doing to the Australian industry.

“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,” she told Food Magazine.

“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.”

Sheldon agrees, saying the systems in place to force drivers to arrive on time are unsafe and unfair.

"When you dominate the market to the degree they do, and have policies that actually say if you arrive outside a half-hour window you get fined; as an owner-driver or a transport company, if you come in within that half hour and we can't unload you, you could still waiting for a day for hours," he told the ABC.

"We've got plenty of examples of people having to stay a whole day or being called back the next day without any work, without appropriate breaks, and with fatigue and economic pressure that goes on the transport companies.

"[The policies] are a damnation of this industry and the retail industry – how it squeezes the road transport industry and leads to unsafe practices."

Speaking up is commercial suicide

The pressure Coles and Woolworths place on companies and workers are well-known in the industry, but almost all are too afraid to speak publically, for fear they will be pushed out of business for doing so.

A Senate Inquiry into the behaviours of the major supermarkets found people would only speak up on the basis of anonymity and most were still concerned that even under such conditions, they would be found out by the big two and punished.

But Australian Logistics Council chief executive Michael Kilgariff told the ABC the latest claims from the TWU need to be substantiated and he believes there is enough regulation in the industry.

"The Australian Logistics Council has a retail logistics supply chain code of practice which deals with these issues such as waiting times, and both the carriers and the supermarkets are very focused on making sure that we don't have these sorts of situations occurring,” he said.

"If Tony Sheldon and the TWU have any evidence that the law is actually being broken, then they have a legal responsibility to ensure that the authorities are aware of where this is occurring so that prosecutions can commence.

"The supermarkets are currently liable under chain of responsibility laws – as is everybody in the supply chain – for incidents that may occur anywhere else in the supply chain where it can be demonstrated that they somehow caused it to happen.

"[The] chain of responsibility… is about to become a national law from January 1, 2013, and so we're going to have a national focus on these issues, and again if the TWU knows that the law is being broken, then they have an obligation to ensure that the authorities are informed."

Coles denies claims

Coles and Woolworths both refused to speak to the ABC on the issue, but said in a statement that the claims are baseless and incorrect.

"We're disappointed the TWU continues to make unsubstantiated claims about our transport practices.

"We outsource our transport business to large and reputable providers, we take safe transport practices very seriously and in no way do our transport contracts force drivers into unsafe or illegal practices. 

"We require our transport providers to comply with all road safety laws and regulations and all our freight contracts include fatigue management programs.

"Contrary to the TWU's claims, Coles's delivery windows into our stores are two hours, which is aligned with retail industry practice, and there are no penalties for suppliers or carriers for missing a time slot into our [distribution centres] or stores. 

"Coles is a co-founder of and current signatory to the Australian Logistics Council's retail code of practice and takes chain of responsibility very seriously as being core to its operating practices".

The release of yesterday's Federal Budget didn't offer any immediate improvements for the industry either, with calls from the Australian Food and Grocery Council (AFGC) for a Supermarket Ombudsman ignored.

It  wanted the appointment of an Ombudsman, to oversee the anti-competitive and bullying behaviour of the major supermarkets to ensure a future for Australia’s food sector, to be included in the budget.