AFGC CEO Tanya Barden says Australian food and grocery manufacturers are facing cost pressures that are starting to flow through to supermarket shelves. Read more
Support needed to keep supermarket shelves stocked, AFGC says
Australia’s food and grocery manufacturing industry is working around the clock, keeping supermarket shelves stocked with Australians in nearly every corner of the country needed to turn up to work to ensure supply. Read more
Surging demand for plant-based meat
The global meat sector at present is facing unprecedented level of disruption and competition, due to mounting growth of plant-based meat alternatives across many categories, according to market research company Future Market Insights. Earlier, plant-based meat alternative products warranted limited shelf space and were meant for niche consumers. With increased awareness of “Veganuary” multiple manufacturers have expanded new product line for plant-based products owing to increased vegan or indeed flexitarian diet.
The global food and beverage recent industry changes illustrate the growth in plant-based alternatives that has brought disruption. Companies across the spectrum are investing heavily in creating and acquiring new products and brands which will provide momentum to the surging consumer demand for plant-based beef products.
Key point from the plant-based beef market study
- A latest study by an ESOMAR certified market research and consultancy company, forecasts impressive growth of the Plant Based Beef market at over 22.7% CAGR between 2020 and 2030
- Based on the source, the soy-based protein segment holds the dominance in the market for plant based beef, while wheat-based protein segments are expected to grow prominently in the forecasted period of 2020-2030
- Based on the product type, burger patty segment holds the dominance in the market for plant based beef
- As alternate protein gains traction in the market owing to the increasing awareness about the environmental impact of food choices consumers make, the majority of the population is shifting towards plant based beef and is expected to gain traction in near future
- Companies across the spectrum are investing heavily in creating and acquiring new products and brands which will provide momentum to the surging consumer demand for plant-based beef products
New product development fuelling plant-based products demand
Increasing demand for innovative products has paved the way for product development across frozen, chilled and ambient segments. This innovation helps consumers with a wider choice of brands and products, and allows plant-based beef to advance improved shelf space and recognition.
Read More: A bearing for all harvest seasons
UK is the global leader for vegan food launches. In 2019 approximately 18% of new food launches were vegan. Tesco has developed wicked kitchen range of meat-free products.
Who is winning?
A few of the leading players operating in the Plant Based Beef market are Impossible Foods, Gardein by Conagra Brands, MorningStar Farms, Archer Daniels Midland Company, Symrise, Roquette Frères S.A., Kellogg’s, Tyson Foods, Sotexpro SA, Crown Soya Protein Group, Puris Proteins, Ingredion, Beneo GmbH, Glanbia, Fuji Oil Co., and other players.
Several leading manufacturers of Plant Based Beef are focusing on partnering with prominent players in the market to increase its business footprints and to increase their production capacity. Leading players of Plant Based Beef are investing in research and development to produce organic, non-GMO ingredients for plant-based beef.
Nut butter obsession turns into million dollar Coles deal
Nick Sheridan created 99th Monkey in Melbourne in 2013. His aim was to create a nut butter that not only tastes delicious but also that was good for a person’s health and kind to the planet.
“As a former journalist (The Age, Global Coffee Report) living in London and training for my first (and maybe last) marathon in 2012, I became obsessed with peanut butter. When my wife Tracey and I returned to Melbourne, I decided to turn my nut butter obsession into a business,” said Sheridan.
Sheridan started out selling in farmers markets then into local stores and online. At the end of 2017, 99th Monkey was in about 800 independent retailers around Australia.
In 2018, 99th Monkey was one of five Australian businesses that were selected to take part in the Chobani Food Incubator program.
“The program helped me to expand my vision for the business and gave me the contacts and confidence to take the brand to the next level,” said Sheridan
Read More: Australian wine company growing export sales
“2018 was also that year that I finally went all in on the business, leaving my job as editor of a coffee magazine to focus on 99th Monkey full time – it felt like a big leap at the time considering we had a two-year-old daughter and a mortgage.”
The leap paid off and by the end of 2018, 99th Monkey was stocked in Coles’ new format stores, Coles Local. This led to 99th Monkey securing three products stocked in 200 Coles stores in Victoria in 2019.
This past year, 99th Monkey have signed a million dollar deal with Coles. 99th Monkey Natural Almond Butter and Cacao Almond Butter will be stocked in 650 Coles stores nationally.
Woolworths to use Primary Connect platform
Woolworths has unveiled another step in its journey to become a Food and Everyday Needs Ecosystem with the launch of its Primary Connect supply chain platform.
This will see Woolworths’ internal supply chain function rebrand to Primary Connect as it begins to evolve into an end-to-end service provider not just for Woolworths Group retail businesses, but an increasing number of partners.
A key catalyst for the move is the proposed separation of Endeavour Group from Woolworths Group. This has seen the platform become the full-service supply chain service provider to BWS and Dan Murphy’s.
Primary Connect managing director, Paul Graham, said: “Establishing the Primary Connect platform is a key step in our ambition to build Australia’s next generation supply chain.
“We run the largest and most distributed retail supply chain network in Australia. This size and scale provides us with a unique opportunity to deliver a lot of value to business partners both within our group and beyond.
“But it’s not enough to have a best-in-class network. To be successful in growing the platform, we need to deliver world-class customer service and build on our digital offering to deliver safer and smarter supply chain solutions for partners. We’ve never been better placed to do so.”
Read More: Combatting supply chain talent shortage
Woolworths’ existing Primary Connect transport business currently services more than 1,000 external customers, including Ingham’s, Kimberly-Clark, Marley Spoon and Diageo. All team members within Woolworths Group Supply Chain will now form part of the expanded Primary Connect team.
Primary Connect’s transport business works with more than 70 trusted carrier partners to optimise freight movements and improve utilisation across its end-to-end network. In FY20, the platform moved more than 8.4 million pallets across 4,000 locations for more than 1,000 suppliers with high service levels.
Tasmanian-based salad grower Houston’s Farm has been using the platform since 2017. Primary Connect transports bagged salads and ready to eat salad bowls from Houston’s Farm’s Tasmanian, Western Australian, South Australian and Queensland processing facilities to Woolworths distribution centres across Sydney, Melbourne, Brisbane, Adelaide, Perth and Launceston. The salads are stocked in all Woolworths supermarkets and replenished daily.
“Primary Connect is a premium supply chain service provider with a vision similar to our own,” said Houston’s Farm CEO, Richard Hopkins.
“We’ve established a close working relationship with them over the years and are able to share and implement ideas to improve our offering for customers.
“Working with Primary Connect has made transport and logistics much simpler for us to manage, and allowed us to focus on what we do best – growing the best quality fresh produce for Australian families.”
The essential sector
Knowing that you are able to walk into your local supermarket and buy what you want to feed yourself or your family and stock your pantry is something that we take for granted. Australia is fortunate that we make enough food to feed 75 million people, three times our population and that we have a strong and resilient food, beverage and grocery manufacturing sector in our country.
COVID-19 has taught us all many things about our sense of community, our vulnerability and not to take this $127.1 billion food, beverage and grocery sector for granted. We realise now more than ever how essential it is.
When there was panic buying in early 2020, when shelves were stripped, this was equivalent to three Christmas buying periods all at once, on the same day, with no notice. Retailers and suppliers were caught unprepared, and shelves were emptied.
However, the 274,835 people who work every day to make the food, drinks and grocery items to ensure our shelves are stocked stepped up – they are our essential heroes. This sector went into overdrive straight away to help meet the runaway consumer demand, working 24 hours-a-day, seven-days-a-week to make the products that Australians were wanting. The shelves have not been empty since.
The supply chain was sorely tested. Speciality ingredients not made or found in Australia had to be acquired in other ways, or substitute supplies found, as borders closed.
Movement of goods across such an expansive country is always a challenge but the logistics sector met the challenge to move more products, more often. Workers in the factories, who are the most important asset to our sector, split shifts, implemented COVID-safe plans right away and socially distanced to help ensure transmission of COVID-19 was kept at bay from our essential sector. Everyone met the challenge to keep the supermarket shelves stocked.
Australia’s food, beverage and grocery manufacturing sector works hard, and it has had to. Rising input costs and market challenges have long been an issue for the sector.
Companies in Australia want to invest in capital and invest in more jobs. They want to buy the exceptional, high-quality raw commodities from Australian farmers, transform them into products, and then send them around the country for Australians to enjoy. And they also want to export them around the world, capitalising on the international appreciation for the high quality and safe food products made here.
This is how traditional supply chains work but there needs to be certainty for business to invest. Certainty, through a stable economy, a skilled workforce and access to markets.
There also needs to be a responsive domestic market too, which will help foster innovation and business growth. As the world modernises and becomes highly automated, this sector strives to do so as well. This will help ensure the sector remains competitive on the world stage, innovation will flourish and jobs will grow.
To do this, the Australian Food and Grocery Council has called for the Federal Government to implement a Food, Beverage and Grocery Site Modernisation Program that provides short-term incentives for the food, beverage and grocery manufacturing industry. It does so by bringing forward investment in manufacturing plant infrastructure and equipment through an instant asset write off, or grants program for smaller investments, and targeted and efficient investment allowance for larger investments.
Without investing to improve efficiency and innovate, there is a real risk that businesses will either need to reduce the scale of their operations or move offshore.
Taking the jobs offshore would result in job losses at a time when we need to ensure job growth. While nearly 60 per cent of the sector’s jobs are in metropolitan areas, around 40 per cent, or 108,000 jobs, depend directly on this sector in regional Australia.
This sector is the backbone to regional Australia and the bond in so many communities – it is the heart of the community. The jobs and support services in so many country towns and regional centres rely on the economic contribution the sector brings through the wages it pays and the flow on to other businesses servicing the sector or the people who work in it.
In turn, the sector also supports the community through social, environmental and other outreach programs and direct contributions. This might include supporting the construction of local assets being built like a swimming pool, donating to local soup kitchens or getting involved in environmental programs like tree planting. This is happening right across the country with the support of this sector.
At the same time as strengthening our local economies and communities, the sector has seen a growth in exports. In 2020, food and beverage exports have increased 5.8 per cent, led by 7 per cent year-on-year increase in food product manufacturing.
Supply chain dependencies and priorities within countries changed with COVID-19 but recent Australian Bureau of Statistics data proved that COVID-19 hasn’t destroyed
our global trade. So, the trajectory of a growing and strong export market should weather the pandemic, even though it has definitely complicated things due to geopolitical developments.
A strong international trade system is crucial to maintaining global food security while Australia can benefit through local economic stimuli. Trade helps to stabilise food prices and supply volumes, which in turn improves social stability across the globe. During the 2007-08 food price crisis, restrictions by countries on exports of certain commodities led to significant increases in world food prices and intensified the impact on food insecurity and poverty. To date, we have not seen a repeat of this food price crisis and trade flows have continued, albeit with some delays at the start of the COVID-19 pandemic.
While we like to know that we can walk into our supermarket and buy what we want on nearly every occasion, we also need to stop and realise what goes into ensuring we can do just that. Australians should be proud of the food, grocery and manufacturing sector here on our shores, for what it makes, supplies us with and the value it brings to our local economy and communities.
Aldi announces sustainable seafood partnership
On Sustainable Seafood Day, Aldi has announced its engagement with Sustainable Fisheries Partnership (SFP) to help evaluate the sustainability of its seafood range.
The partnership enables Aldi to work closely with SFP to develop programs and strategies to ensure the sustainability of its supply chain, and meet its commitment to source sustainably wild caught or farmed seafood.
ALDI Australia was the first Australian retailer to launch a Marine Stewardship Council (MSC) certified Albacore Tuna product in January 2010 and in August 2012, the company launched a new fish buying policy. It is now working towards having all wild caught fish sourced through sustainable and equitable methods by 2016.
In order to achieve this, Aldi will trace its entire canned tuna range, from where it was caught through its supply chain and into stores. By 2014, each canned tuna product will have the Food and Agriculture Organisation of the United Nations (FAO) catchment area printed on its lid, enabling consumers to see exactly where the tuna was caught. By 2016, the entire canned tuna range will be sourced using a combination of the available sustainable options including Pole & Line caught and FAD-Free methods.
“Our partnership with SFP assists us to further form the foundation of our seafood sustainability work at Aldi. We recognise the value that SFP bring to the table in respect to fishery and aquaculture improvement, being so highly regarded throughout the seafood supply chain,” an Aldi spokesperson said.
Seafood Sustainability Day is an annual event, celebrating and rewarding MSC-certified sustainable seafood, fisheries and retailers. It tries to encourage the industry to embrace certification and urges consumers to buy sustainably.
The CEO of the Commonwealth Fisheries Association (CFA), Trixi Madon, said that sustainability was a growing concern for modern consumers, but that it was a huge strength of Australia’s fishing industry.
“If you are going to eat seafood, Australian is an easy choice to be sure of sustainability,” she said.
“Australiancaught seafood is a product that’s great for human health, caught by Australian fishers, and it’s being harvested with great respect for the marine environment.
“That’s a combination you can’t find in many places around the world,” she said.
Inghams sold to TPG for $850m
Poultry processor, Inghams Enterprises, has been sold to a US private equity group, TPG, for approximately $850m.
Before sealing the deal with TPG, Inghams was in negotiations with other prospective buyers including Chinese agribusiness company New Hope, and US private equiteer Blackstone.
According to The Australian, major shareholder Bob Ingham planned to sell the family's land holdings and horse-racing interests in the deal, which was originally expected to fetch more than $1 billion, but will now retain them after TPG requested they be excised from the sale.
The existing management structure at Inghams will be retained and Ingham said it will be business as usual for the company, founded in 1918, and now under the direction of chief executive officer Kevin McBain and his team.
"An important part of the decision for me was finding a buyer who would ensure that our customers will continue to receive the highest level of service and our employees would be well looked after," Ingham said. "I believe I have found that in TPG."
The Inghams sale is the biggest private equity deal in the Australian market since the sale of Primo Smallgoods in 2011, which garnered more than $900m, and could indicate renewed confidence in the food manufacturing industry, which has struggled in recent times with competition from imports and pressure from the supermarket duopoly to lower prices.
Jacob’s Creek forges on with premium transformation
Wine label, Jacob's Creek, is continuing with its efforts to upgrade to a premium-status wine, despite suffering a slide in sales in Britain.
Owned by the world's second largest alcohol company, Pernod Ricard, Jacob's Creek has suffered the loss of one million cases in sales in Britain, thanks to price hikes, reports SMH.
Despite this, the brand will be introducing new blends, engaging in strong advertising and has increased the prices of its entry-level wines by $1 a bottle in order to raise its profile in Australia.
Pernod chief executive Pierre Pringuet said Jacob's Creek sales in Australia have been stable despite the price rises, with the Reserve range in particular growing strongly.
"There had also been a 10 percent increase in its contribution to [Pernod's] profit, and is really a reflection that our value strategy is working," he said.
According to SMH, Jacob's Creek was once again named Australia's biggest-selling brand late last year, after three years of being trumped by cheaper and private-label options.
Strong dollar, private labels continue to squeeze Aussie winemakers
153-year-old Central Victorian winemaker Tahbilk has taken aim at cheap imports and private label brands for hurting local winemakers.
CEO Alister Purbrick said that house-brand wines were becoming a feature at independent retailers and not just stores owned by the Coles and Woolworths duopoly. Meanwhile, the persistently strong Australian dollar was making imported products more attractive.
''So you have got the double whammy of own-brand and imports taking space away from us, up go our promotional slot costs and there is less opportunity for us in any case,'' he told Fairfax Media.
Tahbilk’s domestic sales were down, and overall revenue declined from $13.675 million to $13.187 million. The CEO credited Tahbilk’s wine club with assisting the result while exports margins were squeezed.
''There is not a lot of margin in exports, so the best way to describe our exports at the moment is that we have them in a holding pattern,” he said.
“We are not going out aggressively to grow because we can't make margin out of it, but we want to maintain our presence in those markets.''
Recently d’Arenberg, another century-plus-year-old Australian winemaker, said their yearly result had been hit by the high dollar, with margins for exports whittled away massively by exchange rates.
Producers prefer dealing with Aldi
A number of grocery producers have spoken out – under the veil of autonomy – admitting they prefer dealing with Aldi over the supermarket duopoly.
According to SMH, the producers, who provide groceries ranging from fruit and vegetables to household products, said Aldi pays invoices faster and is easier to work with.
One supplier said Aldi absorbs losses on sales rather than reducing supplier prices or increasing costs, which both Coles and Woolworths are guilty of.
The producers' comments are in response to a dossier produced by Woolworths which claims that Aldi's presence has led to an increase in private label products and a more competitive market for grocery retailers.
The dossier also claims that Woolworths' market share has remained stagnant since 2007, while Aldi's has grown three percent since then.
It says that 95 percent of Aldi's products are private labels, but suppliers insist the German-owned chain still buys from local producers, even paying a premium to do so, and only asks suppliers to compete with other Australian suppliers, not international ones as is the case with Coles and Woolworths.
A spokesperson for Coles insisted the brand has an Australian-first sourcing policy, and usually only looks internationally when an Australian version isn't available or when consumers want an alternative choice.
The ACCC is currently looking into allegations the supermarket duolopy employs bullying tactics in its dealings with suppliers in order to drive prices down.
Ready meals must now display kJ content
As part of the state government's 8700 kilojoule campaign, NSW premier Barry O'Farrell this morning launched the mandatory kilojoule labelling of ready meals sold in supermarkets.
Ready to eat meals including hot chickens, doughnuts and custard tarts must now display their kilojoule content on their labels, in the hope that it will help to curb Australia's growing obesity problem.
At today's launch O'Farrell was joined by Minister for Primary Industries Katrina Hodgkinson, Minister for Healthy Lifestyles Kevin Humphries and swimming champion, chairman of the Premier's Council for Active Living and 8700kJ campaign ambassador Geoff Huegill.
O'Farrell said, "I believe it is essential consumers are equipped with nutritional information to encourage them to make balanced food choices.
“The NSW government’s 8700kJ initiative is educating consumers about their kilojoule intake by giving them easy access to nutritional information.
“Not only does obesity have a detrimental effect on individuals and their families – it is also estimated to cost the NSW economy about $19 billion a year.”
Woolworths has welcomed the launch, and director of public affairs, Andrew Hall, said "At a glance customers can now see the energy value of many popular ready-to-eat items and make a decision on how those products can fit into their daily energy needs."
The NSW Food Authority's 8700kJ campaign was launched in March 2012 and comprises an app and a website and is based on the recommended average daily kilojoules intake for adults.
The new labelling requirements of supermarket ready meals follow regulations introduced last year whereby fast food chains with 20 or more outlets in NSW or 50 or more outlets nationally must now display the kilojoule content of all items on their menus.
Red tape causes food manufacturer to walk away from retail
A West Australian food manufacturer is fed up with the red tape and regulations involved in getting her product on supermarket shelves and will now focus on her wholesale business.
Lyn Bentley is behind the Sticky Fingers gourmet foods brand and according to thewest.com.au, Bentley is walking away from the local retail arm of her business because she finds the red tape of retail too cumbersome.
Bentley said it's easier for her to sell her products to hotel chains overseas rather than adhere to the guidelines set out by Coles and Woolworths, as well as meeting regulations set out by Australia and New Zealand Food Standards, local councils and state and federal governments.
Red tape reduction is one of the policy changes being demanded by the Chamber of Commerce and Industry (CCI) ahead of this weekend's state election, after a 2009 audit found that two-thirds of WA businesses surveyed by the CCI said red tape and regulation prevent them from making the changes necessary to grow the business.
Branded milks make a comeback
Company branded milks have a 50 percent share of the milk market, up eight percent on late 2011, with consumers putting health benefits ahead of price.
Research from Roy Morgan and scan data collected for Dairy Australia shows that – like the days before the supermarkets' $1 milk wars -branded milks are neck and neck with their home brand competitors, in terms of volume solds.
It's believed the rise of A2 milk and marketing campaigns promoting the health benefits of other milks, including permeate-free milk, have contributed to branded milks resurgence.
A2 Milk is rich in the A2 type of beta-casein protein that is a source of essential amino acids, as well as peptides.
Warren Reid, group account manager at Roy Morgan, told the Daily Telegraph that there was a spike in total milk volumes sold when $1 milk was introduced in 2011, but that had now flattened off.
"I think people said 'Great, it's on the shelf, I'm going to buy more of it because it's cheap'. So volume went up. The drop off we're seeing is people saying 'I bought too much of it. It wasn't working for me and I had to throw some away'.
"I think people are over it. They are past the $1 milk campaign. They are now on to the fact that permeate-free is there, A2 is there," he said.
Growing concern over duopoly’s wine interest
Wine producers across the country are becoming increasingly concerned over the supermarket giants’ growing interest in the wine market.
Earlier this week there were reports that Woolworths has registered interest in the collapsed Barossa Estate Winery, and now Western Australian wine producers are fighting the supermarkets’ plans to open liquor stores in the heart of Margaret River.
Wine Industry Association of WA general manager, Aymee Mastaglia, told thewest.com.au that competition between Coles and Woolworths would drive prices down and overpower cellar doors and independent retailers.
Mastaglia said supermarkets often buy wine in bulk from wineries and bottle them in such a way that they look like they’ve been produced by boutique wineries when in fact they’re private label products.
"Even if consumers want to support local business, they often don't realise they are buying the supermarket's private labels," she said.
However, representatives from both supermarket chains said their liquor outlets would increase choice for consumers and support the local wine industry.
It’s a different story in South Australia, however, with the state government considering allowing the duopoly to sell wine, albeit on a limited basis.
While independent retailers have argued against such changes, Attorney-General John Rau said selling wine in supermarkets would match the state’s European-style culture, which places special attention on food and wine.
The government’s proposal would see wine makers sell their products directly from supermarkets, and would not include the sale of any other alcohol product, such as beer, spirits, casked wine or fortified wine.
Profit dip for pie maker
Intense competition inside supermarkets and the growing popularity of private-label foods has seen pie maker Patties Foods post a 16.5 percent fall in first half profits.
The company, which owns Herbert Adams, Four'n Twenty and Nanna's, made a net profit of $9.1 million in the six months to December, down from $10.8 million in 2011.
Along with increased competition Patties said it had been held back by manufacturing disruptions caused by installing a new packaging system and a $1 million charge on bad debt.
Fairfax Media reports Patties managing director Greg Bourke said the company would aim introduce a new line of frozen desserts to try and win back supermarket customers.
“The area where we are having the most impact on margin is our frozen fruit business,” he said.
“It is growing in the value end – increased value products rather than premium branded products.
“There is a change of mix going towards private label and also to the value range.”
Bourke said while the company was still selling the same amount into supermarkets, consumers had drifted away from premium products toward cheaper foods, which delivered slimmer margins.
He said the company had also seen strong growth in its petrol station and convenience store products, but the gains had not been enough to offset weakness in other parts of the business.
ACCC to crack down on free range and other food claims
The ACCC is this year prioritising credence claims in the food industry with chairman Rod Sims making special mention of “free range” eggs, country of origin labelling and the labeling of olive oils.
According to Adelaide Now, in November last year, the ACCC said it planned to reject a trademark certification application by the Australian Egg Corporation because the proposed rules would have allowed eggs to marketed as "free range" even though chicken densities would be "very significantly higher than those in existing standards”. Beak trimming would also have been "routinely practised.”
ACCC chairman, Rod Sims, said "Country of origin claims, region of origin, like does meat come from King Island? We'll be focusing on whether things are organic or free-range when they claim to be," he explained.
Sims’ comments referencing King Island refer to a recent case where a business was found to have misled its consumers, leading them to believe that its meat came from King Island.
"We've taken cases, and we'll take more, on things like is the product what you're getting – you think you're getting extra virgin olive oil – are you? You think you're buying wool – are you?" asked Sims.
Other focus areas for the ACCC in 2013 include door-to-door salespeople, false claims by telecommunications and IT companies, unjustifiable price hikes blaimed on the carbon tax and protecting indigenous consumers.
The ACCC also recently announced its investigation into the supermarket duopoly amid claims Coles and Woolworths employ bullying tactics on producers to force prices down.
Coca-Cola Amatil boss enters supermarket debate
Terry Davis, chief executive at Coca-Cola Amatil (CCA) has announced his support for the ACCC's investigation into alleged bullying tactics by the supermarkets, but insists the government needs to step in too.
Davis told the AFR that rather than having an industry ombudsman, Australian manufacturers need the government to take action and inspect supermarket practices, including forcing prices down to such a degree that they become "loss leaders."
"They [supermarkets] have responsibility to use that market power wisely and for the good of their shareholders but also the good of the communities they operate in, just as we have a responsibility to be a good corporate citizen in the communities we operate in," he said.
CCA's SPC Ardmona brand has suffered because of competition from cheap imports, with up to 90 percent of packaged fruit and vegetables now imported from countries including Thailand, South Africa and Vietnam.
Davis added that the Sheparton fruit growing community has also been hit hard by supermarkets prioritising private label products.
Accelerating depreciation and restructuring the Fair Work Act to improve flexibility and cut costs should be focus areas for the government, he said.
"You can take a big stick to the retailers and say it's all your fault – I don’t believe it is all their fault – or find ways to make it an easier place to manufacture in.
"That can be done in many ways by providing incentives for Australian manufacturers to not move offshore and not close down manufacturing operations," Davis said.
The ACCC announced last week that it will be investigating claims the supermarket duopoly uses bullying tactics to drive prices down, with 50 producers said to have come forward with evidence of misconduct.
Cattle farmers have already started speaking out about their treatment by Coles and Woolworths, with one producer claiming to have lost $80,000 in the last financial year.
The AFR reports that in its investigation, the ACCC could also consider CCA's losses, with the company bleeding millions in 2011 after a dispute over trading terms saw its leading brands taken off promotion in Woolworths between May and October.
The ACCC has given conditional backing to a legally-enforceable code of conduct for supermarket behaviour, but Davis – who also opposes the introduction of an industry ombudsman – believes what the industry needs is less regulation, not more.
Coles and Woolworths are working with the Australian Food and Grocery Council and the National Famrers Federation to develop a voluntary industry code of conduct.
Farmers speak out on their struggles with supermarkets
A fourth-generation cattle farmer has spoken publicly about the losses he has suffered at the hands of Australia's supermarket duopoly, claiming his income last year was slashed by $80,000.
It was announced last week that Coles and Woolworths will be investigated by the ACCC amid claims they employ bullying tactics to drive prices down. Fifty producers came forward, under the protection of anonymity, with evidence of misconduct by the supermarkets.
Brian Wilson, a cattle farmer near Tamworth, told SMH many farmers have been forced to sell their product at a loss, and the $1 milk offering which both supermarkets boast has had a terrible impact on his livelihood.
"The last financial year, we were probably down $80,000 on our milk income,'' he said. ''The processors can't talk with each other to keep their prices up, so it becomes very cutthroat … They get the contract but it's good news and bad news because they have to go so low to get it," he said.
The situation is so bad that in the past year, 30 farmers in NSW have left the dairy industry because of price cutting by the duopoly, said NSW Farmers Association chief executive, Matt Brand.
"The reality is supermarkets aren't going anywhere and neither is agriculture and we need to all be able to sit down and have a serious look at supply chain solutions," Brand told SMH.
Both supermarkets have agreed to co-operate with the ACCC investigation.
ACCC investigates supermarket duopoly amid bullying claims
Supermarket giants Coles and Woolworths are being investigated by the ACCC amid claims they bully food and grocery suppliers to force their prices down.
According to SMH, news of the ACCC's investigation following Wesfarmers confirmation that is has asked Coles executives to investigate accusations of wrongdoing when dealing with its suppliers.
"We are doing our own investigations and obviously the ACCC is doing its and we will just let it all unfold," Wesfarmers boss, Richard Goyder, said.
The SMH reports that under the promise of identity protection, approximately 50 suppliers have approached the ACCC with evidence of misconduct by the supermarket duopoly.
The ACCC's investigation will consider claims that the supermarkets impose penalties on suppliers that aren't part of the terms of trade, favour homebrand products, threaten to remove products from the shelves if extra payments or penalties aren't paid and fail to pay prices agreed with suppliers.
Claire Kimball, a spokeswoman for Woolworths, said "Woolworths has a very strong focus on ensuring its business dealings are fair and lawful."
If proven to be true, the allegations carry multi-million dollar fines.
KAP (Katter's Australian Party) federal member for Kennedy, Bob Katter, said the party has been putting pressure on the ACCC and its chairman Rob Sims for some time now, and is grateful for the competition watchdog's response.
“We are terrifically gratified and heartened that at least someone is trying for us. Every farmer in Australia now has a platform to voice their desperate plight," said Katter.
“The farmers of Australia have been beaten, battered and bullied by these supermarkets and now they will finally get the chance to tell their side of the story."
Katter called on every Australian farmer to write an anonymous letter submitting their support for ACCC's investigation.