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February 2014 • Vol. 7 No. 2
“The purchase expands our categories in New Zealand and provides a great platform for expansion across the Tasman and into Asia” – Founding Director, Todd Heller (see page 5).
AUSSIE CALL FOR RETAIL TO REDUCE FEE DEMANDS AUSTRALIAN grocery suppliers have called on the major retailers to reduce their demands for discounts, rebates and fees so they can invest more in consumer marketing and new products to drive sales growth. The Australian Food & Grocery
ACTION ON ALLEGED LAUNDRY CARTEL COLGATE Palmolive Pty Ltd and PZ Cussons are being charged by the Australian Competition and Consumer Commission in relation to an alleged cartel that the ACCC claims denied Australian consumers the benefits of lower prices for laundry detergent products. The ACCC alleges that Colgates and Cussons made and gave effect to cartel and other anti-competitive arrangements. It said that they, along with Unilever Australia, ceased supplying standard concentrate laundry detergents in early 2009 and only supplied ultra concentrates from that time. It also alleged the companies simultaneously transitioned their laundry detergents to ultra concentrates which met certain requirements and that they sold ultra concentrates for the same price per wash as the equivalent standard concentrated products and did not pass the cost savings on to the consumers. The ACCC said ultra concentrate detergents were cheaper to produce, store and transport and this offered significant cost savings that were not passed on. ACCC chairman Rod Simms said by way of contrast, when similar products were launched in New Zealand, there was significant discounting but the ACCC alleged that the benefits were denied Australian consumers.
Council has produced figures that show suppliers had cut spending on marketing by nearly 6% between 2009 and 2011 and slashed research and development budgets by over 13% to fund higher trade spend on discounts, rebates and promotions. Trade spend in Australia now accounts for 23.4% of suppliers’ gross sales up from 19.5% in 2009 and it has had a bigger impact on declining industry profitability than rising input and labour costs. At a time when the voluntary code of conduct has been signed off, the report produced by KPMG pinpoints the imbalances in the food and grocery market. It gave an example of one supplier asked to pay $A5million in advance to get his small product range on the shelves as well as a 10% introductory discount and promotional spend worth 7% of sales.
Coles dismissed the figures in the report and said suppliers were not forced to invest but Food & Grocery Council chief Gary Dawson said suppliers felt compelled to increase their trade spend to protect their market share and stay on the shelves. n
ANNIES INTO RECEIVERSHIP THE high cost of meeting labelling and compliance issues appeared to be behind the receivership of popular Marlborough-based Annies, a successful producer of fruit leather bars and other related apple based products. The company had been operating for 27 years under owners Annie and Graeme Giles with substantial markets in the US, Germany, the UK and distribution through 750 Coles outlets in Australia. The company that specialized in healthy food products was up for sale and expressions of interest closed late last month. n
NUTRITIONAL LABELLING INEFFECTIVE NEW Zealand’s nutritional food labeling is not as effective as once thought and could be impacting on the health of Kiwis, according to research from the University of Canterbury. The research was part of a marketing study that found consumers reacted better to labels that provided relatable and transparent information that was easily converted into which products were good or bad. The researchers said their findings showed that the current daily intake system was so insignificant that only 23% of the participants recalled seeing it. They found that information and numeric figures were ineffective at aiding consumers with low levels of health literacy to make healthy consumption choices with images and colour found to be more understandable forms of communication. n
Heinz-Wattie Management Changes WITH the retirement at Christmas of long time industry veteran Nigel Comer, have come several other changes at the top of Heinz-Wattie. After many years with the company, Comer worked his way Nigel Comer to local managing director before the international company promoted him to regional CEO. No new appointment has been notified. Michael Gibson
In the Auckland head office, South African Michael Gibson who was appointed managing director in February 2012, has also resigned. The 53 year old was 24 years with the company and was previously chief operating officer. The new managing director is long time staffer Mike Pretty who has come through a number of sales and marketing roles over 25 years to achieve the top appointment.While mainly Auckland based through his career, he most recently has been vice president Global Ketchup, Health & Wellness headquartered in Pittsburgh. n
Mike Pretty
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