MILKING THE MARKET
*UPDATE, July 18, 2012… The National Farmers Federation of Australia is calling for legislation to protect primary producers as proposed in Britain, where the Government is to introduce an independent adjudicator to regulate supermarket-supplier relations.
Suppliers say our two big supermarkets Coles and Woolworths are increasingly abusing their market power, hurting hundreds of suppliers and sending many to the wall.
The supermarkets have hit back, saying they are acting for consumers to bring down prices and that their dealings with suppliers are reasonable.
“Since the supermarket giants provoked concern from regional Australia by drastically cutting milk prices (see story below), the relationship with suppliers has become increasingly sour,” reports ABC News.
“Consumer watchdog Choice has long argued the major players have a unique and unprecedented level of control and concentration.”
“We potentially have the most concentrated supermarket sector in the developed world – close to 71 per cent controlled by two major players,” Choice spokesman Matt Levy said.
That cheap milk you are buying is cheap for a reason.
Today, according to Fairfax , documents reveal that up to 16 percent of the fresh milk we drink is made of “permeate” – a watery, greenish waste left over from the production of cheese.
It’s all about winning the supermarket “milk wars” and making milk as cheap as possible. But what are consumers really buying?
“Internal documents from Australia’s biggest supplier, National Foods – which makes Pura, Big M, Dairy Farmers and supplies both Woolworths and Coles brand milk – reveal its milk now contains up to 16.43 percent permeate.
“One document, labelled ‘permeate cost savings’, reveals up to $22,960 can be saved by adding 16 percent permeate to the production of 350,000 litres of whole milk. This shaves almost 16 percent of the cost off the price of production, and does not have to be disclosed on the label,” says Fairfax.
Independent producers say consumers are being misled. The milk they are buying is not pure.
When Helen Razer saw how cheap milk had become, she smelled a rat… if not cheese. Here’s how she took matters into her own hands…
In the end, it was milk that soured my long and loving relationship with the nation’s biggest supermarkets.
When cash-cows Coles and Woolworths offered a litre of milk for a dollar, something just didn’t smell right. Sure, the price was almost irresistible but the fog of betrayal didn’t feel so fresh.
It didn’t take an agribusiness-geek to see that there was something wrong with this supply chain. Somewhere, someone was almost certainly copping a loss to make this discount happen and, as it turned out, it wasn’t the shopping colossus.
Dairy farmers would bear the cost of this gimmick, the supermarkets would continue to take their rake and I would save a buck or two a week.
Don’t get me wrong, I love saving a buck or two a week.
Frugality is in my DNA and I am rarely happier than when force-feeding you leftovers. Once, I stretched a chook to seven meals; four of them more-or-less edible. But, the chook-in-question was ethically grown and supplied. Sure, it probably wasn’t tickled to death but it did have a reasonable life. And, it provided a reasonable living to the people who produced it.
It’s this concern that has driven some of us from familiar aisles and into an uncertain shopping future. If news that the Coles and Woolworths parent companies, Wesfarmers and Woolworths Limited respectively, own the lion’s share of the nation’s pokies is not enough to deter us, stories about the jobs that have been lost to the stores’ private label wars might just do it.
In a nation where manufacturing jobs are rarer than amorous pandas, it just seems mean of the duopoly to market at the expense of jobs at Heinz or Cussons.
I began to find the spectacle of home-brand at eye-level quite vulgar.
If 50 cents from every Australian food dollar goes to the Goliaths, then I determined that all of my food dollars would go elsewhere.
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