Are we so lazy we’ll allow the duopoly to foist generic brands onto us?

SOME of us are saying ‘Yes’ to Aussie-owned businesses and ‘No’ to the supermarket duopoly. Since I wrote about buying lettuce in a sealed bag this ‘lazy shopper’ has found two good local greengrocers and I’ve gone back to my old butcher. It’s a different relationship….. I like it, it’s not dearer and it only takes a few minutes to walk down the arcade…..next step is to find a local Farmers’ Market! How are you finding the generic brands on supermarket shelves – probably ‘made in China’?

I am glad to see some individuals and community groups prepared to ‘take on the duopoly’. It seems in 2007 acting locally on global issues is being called ‘relocalisation’. Journalist Russ Grayson describes this as “an idea thrown up in response to the possible peaking of the supply of oil and, to a lesser extent, to global warming. What gives it greater value than many of the solutions coming from the environment movement is its broader benefit to society, especially to local farmers, producers, community enterprise and businesses.”

Relocalisers ask us to reflect on our future and act in ways that give us more control over our lives and ‘locales’, ways that are less dominated by global corporations and consumerism, with all its consequences.

THE PROBLEM for consumers, producers…… AND our ‘leaders’?

Consumers are NOT aware of foreign food ownership and how difficult it is for farmers to get their produce onto supermarket shelves where foreign food companies dominate. Aussie Farmers Direct spokesman Graham Adams in a radio interview on 3RPH (scroll down) explains:

  • 90% of milk is processed by Parmalat and San Miguel;
  • 70% of Australia’s bread is baked by foreign-owned companies;
  • 85% of a typical family shop goes to foreign-owned companies;
  • the supermarket duopoly holds farmers to wafer-thin margins;
  • farming communities’ survival is threatened as prices paid to growers fall and prices paid by consumers rise…..

    BUT,
    in Victoria, Aussie Farmers’ Direct Sungold Milk is produced by 700 farmers and processed by the Warrnambool Cheese and Butter Factory, which employs 250 and is the oldest operating dairy in Australia…..

The Australian Competition & Consumer Commission’s (ACCC) Graeme Samuel says:

“The Commission cannot interpret its responsibility to promote competition to mean the protection of individual companies and the outlawing of vigorous, legitimate competition – even where that competition causes difficulties for individual firms….the distinction between promoting competition and protecting consumers (is) confused and blurred by some sectors…”

So, because the independent grocers in IGA/Metcash and Australian growers – who can’t win shelf space from cheap imports – are ‘simply competing’ the ACCC will not interfere…

BUT

you have to scratch your head if respected Harvard economist Professor Michael Porter holds that (Executive Summary):

“strong domestic rivalry between firms contributes to national prosperity in terms of GDP per capita”

AND

if American antitrust laws – those which make unfair trade practices illegal – have the power to intervene if something seems amiss (eg growers’ margins going down while consumer prices rise), why is the ACCC not looking at Competition Law in the same light as the American Antitrust Institute:

“Antitrust laws speak in general terms, thereby leaving a lot of room for discretion on the part of administrators and judges. As something more akin to art than science, antitrust is subject to swings in political ideology and economic theory.”

Well our leaders may be doing nothing but a couple of young Melbourne entrepreneurs are having a go!

Home Delivery – milk, OJ, bread, eggs etc – cheaper than supermarkets

In Melbourne, William Scott, 27, and Jordan Muir, 26, have seen an opportunity to cut out the middleman and provide fresh Australian produce to a market that wants to support Australian farmers and their communities.

They have formed a consortium called The Smart Group (pdf) and under the banner of Aussie Farmers Direct’ they have established a franchise that sells fresh Australian milk, juice, bread and other staples.

Deliveries are twice weekly, before 7am. Customers are given cooler bags to leave on their front porch the night before. Negotiations are underway with Australian-owned dairies and bakeries in Sydney and Perth to expand the network.

Aussie Farmers Direct has won 6500 customers in 12 months with 1000 signing up each month in Victoria reports the Leader Community Newspaper.

Also ‘taking on the duopoly’

  • Farmers’ markets maintain their popularity and growth;
  • community food gardens are popular;
  • Ritchies Supa IGA independent grocers are supporting Australian-owned business with their Community Benefit Card and the Fight Back for Australia newspaper that provides a 6 page Australian-owned brands guide. The current edition of Fight Back explains:

    In 2003, Coles and Woolworths….announced they would introduce a new two and three tier generic product range. To make way for these
    new products 23,000 lines would go. Australian-owned brands suffered most….Many multi-nationals, to make their brands more competitive for the limited spaces on the duopoly’s supermarkets’ shelves started bringing in product from their lower cost factories overseas.”

How are the big two supermarkets being challenged?

  • Grocers are lining up to join IGA/Metcash. IGA is a network of 1300 independently owned stores – third to Coles and Woolies – who pool their buying power through Metcash and operate under a common brand to cut marketing and advertising costs and who, in November 06, reported a 36 per cent increase in first-half net profit;
  • The IGA website lists all specials online PLUS cheap fuel in local areas – quick and easy – you also get 4c per litre rebate on fuel purchases if you spend $30 at IGA;
  • IGA retailers supporting the Fight Back program use a ‘shelf ticketing system’ highlighting Australian made and owned brands;
  • The Ritchies/IGA Community Benefit Card – free to all Ritchies shoppers who choose as beneficiary a school, charity, sporting club etc – that channels 1% of the total sales each time a person shops to this cause
    AND
  • Ritchies are using degradable bags at all their supermarket and liquor outlets

Shopping in country Vic over the past week:

  • In Wangaratta I was told “The children’s wear shop shut down after Big W opened”;
  • At the Beechworth IGA I saw a sign at the checkout saying “We have donated $170,754 to local schools, charities sporting clubs…”
  • I discovered Ritchies has donated more than $20 million to community groups in Victoria, NSW and Queensland, with the Salvation Army receiving almost $1.1 million since the Community Benefit Card commenced.

If you’re still with me you might like to consider Russ Grayson’s concluding thoughts.

Russ believes local government could support citizen and local business initiatives that comply with relocalisation aims. Even if the impact of peak oil is not as drastic as some say, relocalisation activities, enabled by local government policy, would still benefit communities. However, he says, many relocalisation associations are new and still finding their feet in the world of community development and advocacy. Many don’t know how to co-operate in policy formulation. What they need to understand is that policy is an enabling thing under which a great many socially-beneficial initiatives can be launched.

Food for thought?

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