MEDIA reports this week, on the public relations blitz that Coles employed to stem negative agribusiness reaction to its Australia Day 2011 launch of $1-a-litre milk, are proof of Coles' self interest and disdain for the dairy industry, according to the Queensland Dairyfarmers Organisation (QDO).

QDO says there is no blue sky for dairy farmers as Coles is driving them out of business with its $1-a-litre milk war. Image:QDO

QDO president Brian Tessmann said the reports were more confirmation that Coles supermarkets were taking care of their own interests, blatantly ignoring the negative long-term impacts on Australian farmers - and already driving "generations of dairy farming experience" off the land.

While the move was popular with the public and led to competitors such as Woolworths having to match the milk offers, questions continue to be raised about Coles applying undue pressure in reducing farm incomes to unsustainable levels to fund the campaign.

This is at a time of record profitability for Coles. According to reports in The Guardian and revealed by SBS TV, Coles had to deploy ‘every PR tactic possible to neutralise the noise'.

Milk is well-known in the retail industry as a staple item in Australia that drives regular walk-in shopper traffic - which is why it is always presented at the farthest ends of supermarkets.

The QDO has called Coles' tactics in spending large sums of money on public relations and advertising while denying many farmers a sustainable income for their milk as "unconscionable".

"QDO and our industry partners continue to point out the facts," Mr Tessmann said. "The facts are that the Queensland industry has lost more than 86 farmers since the milk war began and Queensland milk production is drastically down and short of the state's own drinking milk needs.

"We have lost some 86 million litres of fresh milk production per annum and a loss of over $258 million in investment in fresh milk production, along with 258 jobs at a farm level and more people losing their jobs along the value chain."

The strong concern in the agribusiness sector is that losses in local milk production will be recovered through imports.

Mr Tessmann said, "As Coles profits have trebled in recent years to over $1.5 billion, the Coles-led discounting of fresh milk has seen major domestic fresh milk processors' profitability pushed down, and with that farm gate prices to dairy farmers have also been pushed down to where the majority can't make ends meet.

"For Coles to describe dairy farmers raising concerns about the impacts to them and their families and the dairy industry as ‘noise' is a massive and unconscionable insult. That ‘noise' is the sound of generations of dairy farming experience being forced off the land due to Coles' marketing tactics," Mr Tessmann said.

"Here's an idea for Coles. Instead of mounting massive PR and advertising campaigns worth millions of dollars and talking about ‘noise', Coles could price its milk sustainably and work positively toward seeing farmers receive a fair and sustainable price for their milk at farm gate."

Mr Tessmann said it was a credit to small organisation like the QDO and others that Coles felt it necessary to combat the industry with huge PR campaigns, as QDO "continues to unapologetically prosecute the case for farmers to the media, consumers and politicians".

Mr Tessmann said it reinforced the need for a mandatory code of conduct and an ombudsman and changes to the Competition and Consumer Act, to help protect farmers from clear market failure resulting from the supermarket price war.

"We had positive support from Agriculture Minister Barnaby Joyce during the election campaign, and QDO and our federal industry partner ADF will be working with the new Federal Government as a matter of priority to see them create action in this important policy area."

Links to reports by The Guardian and SBS TV are here and here respectively.

http://www.dairypage.com.au

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THE meat processing industry will follow the downhill path of Australia’s motor vehicle manufacturers unless it undertakes major workplace reform, according to one of Australia's largest beef processing companies, Teys.

Australian beef: union action threatening food manufacturing?

Teys Australia chief executive officer Brad Teys said a number of companies that specialise in higher quality grain fed beef have been forced to close, merge or restructure over the past decade due to uncompetitive workplace arrangements.

The company’s Beenleigh plant in Queensland, with over 800 staff, will be hit with a 24 hour strike by the Australasian Meat Industry Employees Union on Friday, a move Mr Teys said highlights “how out of touch the union is”.

“We are dealing with a union that is stuck in the 70s, that still believes in unfettered union power,” Mr Teys said.

“Times have changed and the manufacturing industry must change or it will die. The community knows that and most of the families of our 800 staff know that.”

Mr Teys described the reform needed as “more workplace flexibility and a more engaged workforce”.

“We see a workplace where the company and workers share the same goals and vision. A profitable company provides job security,” he said.

He said most of Teys’ staff - many who are not union members - oppose the continued industrial action, with only 28 percent of the total workforce voting in favour.

“We are concerned for those staff who will lose a day’s pay for the second successive week as a result of the union’s action.

“The union's control is disproportionate to the views of the workforce and these bully tactics show why reform is needed.”

Teys Australia is in the process of negotiating a new workplace agreement.

"The meat processing industry is vital for the Australian economy and we must ensure its long-term viability and protect thousands of jobs and associated industries across the country," Mr Teys said.

www.teysaust.com.au

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AUSTRALIAN businesses involved in the water industry will learn first-hand about  significant opportunities arising from China's $272 billion investment in water conservation.

Australian water management innovation can assist China.

Nominations are being called for a  special trade mission in June - named the Australian Water Solutions Mission-and it is being organised by the Australian Trade Commission (Austrade) and industry body WaterAustralia to showcase domestic water technologies and services to potential partners and customers in China. 

The Chinese Government's investment in water conservation under the 12^th Five-Year Plan to 2015 will reach $272 billion, rising to an estimated $604 billion by 2020.

Businesses involved in water management, efficiency, irrigation, research and other aspects of water conservation can apply to participate in the mission, which will be led by Australia's Water Advocate and supported by the Department of Industry, Innovation, Science, Research and Tertiary Education (DIISRTE).

The five-day mission will visit Guangzhou and Beijing from June 3. The deadline for applications is April 30, 2013.

http://www.austrade.gov.au/

http://www.wateraustralia.org/

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THE University of Sydney Business School is studying the commercial and moral implications of projects in India which aim to turn poverty alleviation for the nation's poorest people into profit making ventures.

Dr Ranjit Voola.

Microfinance projects which charge relatively high interest rates have in recent years targeted thousands of people at the bottom of India's socioeconomic ladder.

FFor a very long time, poverty alleviation through microfinance has been the domain of not-for-profits, governments and huge multilateral organisations like the World Bank," said Business School researcher,
Dr Ranjit Voola. "Now may be the time for business to also get involved in return for a profit." 

Not-for-profit organisations have traditionally provided credit to people, often women, who are too poor to qualify for traditional bank finance. These small amounts of money are usually invested in small scale by sustainable village level enterprises.

"Unfortunately, these microfinance projects sometimes fail because lending organisations lack the profit incentive to continue with them," Dr Voola said.

The profit making projects in India to be audited by Dr Voola and his team, have loaned money to about a thousand women wanting to invest in small scale dairying, village level retail businesses, goats, food stalls and
range of other ventures.

The goal is to ensure long term income, health and food security for the women and their families.

"While these seem to be an admirable goal, we want to take a step back and look at whether this is the right criteria for success," Dr Voola said. "We want to know if the profit motive really does have a role in poverty
alleviation or are these very poor people simply being exploited.

"At the end of the day, we may find that profitability holds the key to the grinding poverty that affects nearly half of the world's population," he said. "Perhaps it is possible to make a profit and go to heaven."

The notion that businesses are important in combating chronic poverty is recognized by Tim Costello, CEO of World Vision.

"We will not succeed in eradicating chronic poverty unless business joins the fight," Mr Costello said. It has a
critical role to play in lifting 2.6 billion people, or 40 percent of the world's population, out of poverty."

Dr Voola is the director of The Poverty Alleviation and Profitability Research Group which has been formed within the Business School to manage various research projects aimed at understanding the challenges of profitable and poverty alleviation here in Australia and around the world.

The group includes academics with expertise in marketing, human resources, business information systems, accounting, international business, education and social policy.

The group also includes internationally recognised experts in the field of poverty alleviation and business, Jaideep Prabhu, who is the Jawaharlal Nehru professor of Indian Business and Enterprise at Cambridge University's Judge Business School and Mushfiq Mobark, associate professor of economics, School of Management, Yale University.

www.sydney.edu.au/business

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