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A case of misguided priorities

Mick Keogh - Thursday, February 19, 2015

The fallout from the contaminated frozen berries issue continues to escalate, raising questions about Australian food labelling laws, quarantine and biosecurity standards, and ultimately the longer-term implications for Australia's food processing and food retail sectors. It will bring a renewed focus on the role of Australia's two major supermarket food retailers, and ultimately raises some very challenging questions about the priorities of these two in relation to the well-being of Australian food consumers.

The immediate fallout from the current contamination incident will fall on Patties Foods, the Victorian food processing company that markets the "Nana's" brand frozen berries in Australia. The use of China-sourced, contaminated frozen berries in their products will negatively impact on that brand for a considerable period, and may even kill the brand entirely. 

But Patties Foods is not the only Australian importer of fruit and vegetables from overseas - in fact both major supermarket retailers have substantially increased their imports of overseas fruit and vegetables over recent years as part of their development of home brand lines of processed and frozen products. By some estimates, over one third of all products on the major retailers shelves will be home brands by 2018, and processed fruit and vegetables have been at the forefront in this regard.

This raises some interesting questions for both retailers, in the wake of the frozen berries incident. Both retailers have been quite dogmatic in imposing farm production standards, and indeed in banning some farming practices by their Australian farmer suppliers. These include Coles banning the use of hormonal growth promotants in cattle and sow-stalls for pig producers, and Woolworths banning sow-stalls and proposing to ban caged-egg production by December 2018. All these decisions have been taken 'due to the demands of consumers' - according to both the major retailers, despite the actual outcomes in many instances actually having a negative impact on consumers, and potentially increasing the prices they will have to pay.

In the case of hormonal growth promotants (HGPs) for cattle, the products that Coles have banned have been in use globally for up to four decades, have never been found to have any adverse implications for livestock or consumer health, increase the productivity of grain-fed cattle by up to 20% (reducing the environmental footprint of beef production by the same amount), and are completely undetectable in beef produced with their use. 

The decision by Woolworths to ban caged-egg production is also said to be due to 'consumer demand'. But cage-free egg production systems are considerably more expensive, result in higher bird mortality levels, and also create significantly increased disease risk - including avian influenza. 

Sow stalls are used in most major overseas pig producing nations (including Canada and Denmark - both major sources of imported pork products to Australia) because they reduce piglet mortality, and increase the productivity of pork farms. Their banning in Australia will increase the cost of pork production here, and will result in increased pork imports.

In all three cases, these decisions by the major retailers will inevitably result in increased costs for consumers, in some instances will increase disease and biosecurity risks, and will also make Australian farm products less competitive in international markets.

The contrast between these decisions, and the apparent decision by the major retailers to continue to import frozen and processed fruit and vegetables from overseas sources that have now been shown to bring with them significant biosecurity and health risks (including up to twenty cases of hepatitis-A in the latest incident) raises some challenging questions for both major retailers. 

It highlights that their decisions to ban specific farm practices by their Australian suppliers despite their unquestioned safety and productivity benefits stands in stark contrast to their apparent decision to continue to import processed fruit and vegetables, despite the demonstrated risks that such products have been shown to pose for Australian consumers. 

To be clear, the point of highlighting this inconsistency is not to suggest that the major retailers should ban the importation of processed fruit and vegetables as a consequence of the current incident. The point is that both major retailers should be consistent in their approach; they should insist on clear labelling or products (whether that labelling refers to production systems of country of origin) rather than imposing unilateral bans, and they should then allow consumers to make their own decisions about the products they wish to purchase.

Unless they adopt such a consistent approach, their decision to ban some practices by their Australian farmer-suppliers while they continue to happily import overseas products that are apparently grown under conditions that would not be accepted in Australia leaves them open to accusations of hypocrisy, and of only really being interested in their own bottom line.

 
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