Buy local here but not there…
The chief executive of one of Australia’s big supermarket chains told an agribusiness dinner in Melbourne about its strategy to buy local produce.
It was, he said, a response to customer demand for Australian goods.
The supermarket was also going to go direct to producers, eschewing buyers in between.
It would, he said, be good for customers and producers.
The New Zealanders in the audience saw the danger in this and even the Australians weren’t entirely convinced of the scheme’s merits.
They liked the idea that they wouldn’t be competing with overseas producers but they’d seen how hard dairy farmers had been squeezed by milk wars.
Many of them were exporters and they recognised the risk, and hypocrisy, in supporting buy local at home when they would be wanting customers in other markets to do the opposite.
The Australian-made strategy is now hitting New Zealand producers assupermarkets stop buying are fresh and processed food.
New Zealand products are being stripped off supermarket shelves across the Tasman because of the aggressive Buy Australia campaign, says an organisation promoting local goods.
Buy NZ Made executive Scott Wilson says big Australian supermarket chains Coles and Woolworths are “systematically removing New Zealand-produced goods from their house brand labels simply for being non-Australian”.
Mr Wilson says frozen foods, cheese and fresh vegetables are among products affected.
“We have no intention of taking a protectionist stance by suggesting people avoid products that aren’t New Zealand made,” he said.
. . . Prime Minister John Key addressed the issue today, which he says is against the spirit of trade relations with New Zealand.
“The whole spirit of CER is an integrated Australasian market, and we feel that the big companies in Australia should actually observe that. We can always retaliate but their market’s five or six times bigger than ours, so that doesn’t help us much.” . . .
Labour is huffing and puffing about the issue, but what would they do if Tony Abbott tried to tell supermarkets here what to do?
It is a contravention of the spirit of CER which has created a free market between Australia and New Zealand.
But removing tariffs is a government decision, it doesn’t impose requirements on businesses to buy imported goods or stop them only buying local produce.
New Zealand producers could organise a boycott of Australian-owned supermarkets here but there’s little else they can do.
The Aussie supermarkets are trying to sell the scheme as being better for customers and producers but it won’t be in the long run.
Australian customers will have less choice when they shop and that could eventually lead to having to pay higher prices.
They will also less certainty of supply when, for example droughts or floods, affect production. When supply drops, prices rise.
Producers will find themselves locked into contracts as the weaker partner which will eventually lead to them having to accept lower prices.
There are good things to be said for buying local, and I do it when I can if there’s little difference in price and quality.
But that’s my choice and the Aussie supermarkets are taking that choice away from their customers.
There are also many good things to be said for free trade, for customers and producers who will be the losers if the supermarkets continue to swim against that tide for their own ends.
There is a lesson in this for the Buy NZ Made campaign too – it’s arrant hypocrisy to say buy local here but not there.