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Caging the 900 pound gorilla

Everyone who reads my blog (including Coles) knows that since milk went down, down, down to $1 per litre at Coles I have done a lot of Coles bashing. After 30 years in the very switched on world of retail pharmacy I am well aware that it is not smart business to bash your customer and with 80% market share the Australian supermarket duopoly are indeed a very important retail customer in the farm to glass story.

So why have I chosen to ignore this wise advice. It was Mick Keogh of the Australian Farm Institute who first introduced the term, “900 pound gorilla”, in reference to the dominance of the two major supermarket chains.

Furthering the analogy, he said for farmers, dealing with the supermarkets was like being hugged by a gorilla; the initial embrace may be warm and comforting but over time the oxygen gets squeezed out.

That’s just how I feel like my life blood is being squeezed out. Like most dairy farmers I feel helpless, undervalued and in the current climate of relentless supermarket discounting of milk it’s so hard to feel positive about the future for NSW and Queensland dairy farmers and indeed the ongoing availability of fresh milk in both of these states

Should I be feeling this way?

Yesterday one of the speakers at the Dairy Innovators Forum in Queensland said if we have 134,000 farms in Australia we have 134,000 CEO’s and 134,000 CFO’s and its time we got together and found our inner strength and found out just how powerful we could be if we all worked together.

So what’s stopping us I keep asking myself? Highly frustrating to me the Australian dairy industry just seems to be sitting in a rowing boat waiting for the wind to change in its favour rather than determining the place they want to be and buying the biggest and most powerful motor to take us there.

So is the ACCC announcement that they are launching an investigation into Coles and Woolworths over possible misuse of their market power and “unconscionable conduct” going to help save the dairy farmers? Is the ACCC a toothless tiger no more? Will they cage the 900 pound gorilla?

Let’s have a look at some of what Mick Keogh for the Australian Farm Institute has to say on this announcement here

The recent announcement by ACCC head Rod Sims of the supermarket investigation gained wide publicity (see here, here and here ). The response from the major supermarkets has been tinged with surprise and indignation (see here and here ).

When both major Australian supermarkets are listed amongst the largest retailers in the world despite Australia’s relatively small population, it gets a bit hard to argue that their market share is actually less than everyone thinks!

Unfortunately for the major retailers, however, their responses to the ACCC announcement directly contradict their own actions and advertising, so are unlikely to garner much public support or sympathy.

By demonstrating the reality of their market power through, for example, unilaterally declaring that from now on the price of a major staple such as milk will be $1 per litre or the price of bread will be $1 per loaf the major retailers have sent a very clear message to consumers that they have the power to set the price of goods they retail, even though it is clear that the major retailers don’t actually produce those goods.

Complex explanations that the retailers have funded these price cuts from their own businesses and not as a result of lower prices being paid to suppliers simply don’t sound believable in the face of evidence that dairy farmers are leaving the industry and dairy processors are reporting major operating losses while supermarkets report major increases in profits.

No amount of slick advertising based on images of retailers and their moleskin and Akubra-clad celebrity spokespersons standing arm in arm with smiling farmers will be sufficient to contradict the raw display of market power that is repeatedly demonstrated to consumers every week, when they pick up their $1 a litre milk or the $1 loaf of bread.

It doesn’t take a great deal of thought before consumers make the connection between the extent of the market power that major retailers have demonstrated, and the potential to misuse that market power unless there is adequate regulation and transparency. When reports emerge from the ACCC that 50 suppliers have come forward with complaints this hardly comes as a great surprise to consumers.

Ultimately, the major retailers have promoted their market power as a major benefit for consumers, so to then try and claim that in fact they don’t have that power, and even if they did have it they would never misuse it is simply not likely to pass the “smell test” in the court of public opinion.

The Conversation also had some very interesting commentary here and here. Let me share some of what resonated with me

The Australian Competition and Consumer Commission (ACCC) announced last week that it is investigating claims that Coles and Woolworths are bullying suppliers. The issue is serious, but the ACCC investigation only treats the symptom and diverts attention away from the real cause of the problem: supermarket power.

That’s right this is all about power and it’s time for the dairy farmers to use their power and get serious and smart about how we deal with the supermarkets. The good news it is starting to happen. Tomorrow’s post will share with you some of what is happening in NSW

In the meantime check this out from clever young full-time vet student and part- time dairy farmer Cassie MacDonald. Cassie has created her own infographic to counter the half truths in the Coles version. Cassie says “Coles it’s clear you don’t give a buck” The video is averaging 1500 views and it’s pretty impressive

Update: Cassie Macdonald has not had 50% more hits on her video in 3 days than Coles have in 2 months

You get what you pay for

Isn’t twitter a great source of information and food for thought. Thank you Melissa Henry for drawing this article titled Horse meat – the hardest thing to digest is that it’s your fault from the UK ‘The Making Progress Blues~ A blog on the journey’ to my attention.

Forgive me author , I cant seem to ascertain the name of the writer of the blog but I am pretty confident it is not contributed to by the agriculture sector. I am sharing it with you for a number of reasons. The first reason is a highly positive one and that is I believe in the integrity of our domestic food supply chain in so much as Australians faith in the commitment of our farmers to supply fresh, affordable, nutritious food for our customers at every level and ultimately consumers is second to none.

Secondly I believe this post does highlight the dangers of taking this for granted. As consumers when all we value is cost and convenience with little or no thought to the ramifications to the people down the supply who are ultimately forced to continually ‘innovate’ to keep supplying this food at rock bottom prices. Now I am pretty confident that this type of ‘innovation” wont happen in my lifetime in this country. It is imperative however that as the consumers we keep remembering there are no free lunches. First the suppliers suffer and in the end we all pay whilst supermarkets like Coles profits go up and up and their executives take home million dollar wage packets in double figures.

I have reproduced the first part of the post below. You can read the rest here Horse meat – the hardest thing to digest is that it’s your fault .

Be warned like me you may find the post a bit confronting

No doubt you are outraged about the horse meat scandal. You have every right to be – criminality, profiteering, potential fraud, all have led to many people eating an animal they would probably prefer to see in the 3.20 at Kempton and possibly also ingesting dangerous veterinary drugs.

However, I’m going to come at this from another angle me at this from another angle and it’s this: it’s your own bloody fault. There you go.

I know, I know; you’re not happy. It’s not your fault is it? It’s the government, the supermarkets, criminals and Goodness knows who else.

But it’s not just them, you see. It’s you.

After a week of this story my patience has finally snapped, and it’s time someone told you a few home truths.

Many of us have been banging on for years about this stuff, trying to make you care about the need for better food labelling, about fairness for farmers, about the need to support local farms to avoid all our food coming from giant, uncaring corporate agri-businesses which churn out cheap product to feed the insatiable appetite of supermarket price-cutting.

We’ve been highlighting the unfairness of UK farmers being forced to meet 73 different regulations to sell to supermarkets which don’t apply to foreign suppliers, and talking about our children growing up with no understanding of food production and, more than all of this, about the way supermarkets have driven down and down and down the cost of meat to the point where people think it’s normal to buy 3lbs of beef (in burgers) for 90p.

And you wouldn’t listen. It was like shouting into a gale.

Through the years of New Labour, when farming and the countryside were demonised, you wouldn’t listen. You cheerfully chose to believe that all farmers were Rolls Royce driving aristocrats, as painted by John Prescott. You had no sympathy. You wanted a chicken for £2 and your Sunday roast for a fiver. Well, you got them didn’t you? And hundreds of farmers went to the wall. And you still didn’t care because Turkey slices were ten for 60p.

And now you’re furious, because it turns out that when you pay peanuts for something it’s actually not very good. Who knew eh?

And before you start, don’t even think about the “it’s all right for the rich who can go to local butcher’s shops but what about the poor?” line. The number of people who can’t afford adequate amounts of food is tiny – tragic and wrong, yes, but tiny. Supermarkets don’t make their billions from them hunting in the “reduced” basket, they make their money from millions of everyday folk filling a weekly trolley. You, in other words………….

This post is not just about truth ion labelling

This post is about equity for everyone in the food supply chain We do care don’t we?There is an election coming up. Let’s show we care and vote in the people who share our social conscience.

Coles Milking the Cash Cow Dry

For those of you who read this excellent blog from Milk Maid Marian will know she has quite a way with words so when I was sent this classic ‘Explaining Ideology With Moo Cows!’ that does the rounds from time with updates on what is topical at the time I knew Marian was just the person to give it an Australian dairy milk prices wars theme.

What a clever little vegemite she is. Less than a minute it took her to put together the Coles Corporation ditty ( see bottom of post )

Subject: The world economy

SOCIALISM

You have 2 cows.
You give one to your neighbour.

COMMUNISM

You have 2 cows
The State takes both and gives you some milk.

FASCISM

You have 2 cows.
The State takes both and sells you some milk.

BUREAUCRATISM

You have 2 cows.
The State takes both, shoots one, milks the other and then throws the milk away.

TRADITIONAL CAPITALISM

You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

VENTURE CAPITALISM

You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.

A FRENCH CORPORATION

You have two cows.
You go on strike, organize a riot, and block the roads, because you want three cows.

AN ITALIAN CORPORATION

You have two cows, but you don’t know where they are.
You decide to have lunch.

A SWISS CORPORATION

You have 5,000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION

You have two cows.
You have 300 people milking them.
You claim that you have full employment and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION

You have two cows.
You worship them.

A BRITISH CORPORATION

You have two cows.
Both are mad.

AN IRAQI CORPORATION

Everyone thinks you have lots of cows.
You tell them that you have none.
Nobody believes you, so they bomb the crap out of you and invade your country.
You still have no cows but at least you are now a Democracy.

AN AUSTRALIAN CORPORATION

You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

A NEW ZEALAND CORPORATION

You have two cows.
The one on the left looks very attractive.

A GREEK CORPORATION

You have two cows borrowed from French and German banks.
You eat both of them.
The banks call to collect their milk, but you cannot deliver so you call the IMF.
The IMF loans you two cows.
You eat both of them.
The banks and the IMF call to collect their cows/milk.
You are out getting a haircut.

A COLES CORPORATION

You have two cows

You refuse to feed them and complain they make too much noise

You give away their milk while picking the pockets of everyone who passes buy

Eventually, the cows die of starvation, so you get everyone drinking UHT instead

Special Thanks to XQHEQUE for this very accurate cartoon comment

Coles face facts it’s not dairy farmers that are in denial

Coles recently commissioned Freshlogic to tell their side of the milk price wars in a effort to absolve themselves of any responsibility for the decimation of the NSW and QLD dairy industry and they got what they paid for – a report that uses out of date data to tell their side of the story

The latest data for the first half of 2012/13 show a very different picture Coles and the numbers show that milk production in Queensland and northern NSW has plummeted.

Independent analyst Jon Hauser of XCHEQUE has done the sums and analyses and blown the lid off Coles denial public relations spin and laid the blame firmly where it belongs at the feet of Coles,

Jon reports here that the cracks in the supermarket’s denial of a farmgate impact first started appearing in the second half of 2012. After lengthy, and no doubt heated negotiation, Lion and their milk supplier, Dairy Farmers Milk Cooperative, introduced a new milk pricing system that split the value between a relatively stable monthly milk quota (T1 milk), and the seasonal surplus (T2 milk). The average milk price paid to a large proportion of NSW and Queensland dairy farmers was decimated by this change.

We now have Australian milk production data through to December 2012 and the fallout from $1 milk is now very clear. The supermarket’s pricing strategy has squeezed the processors to near death and they have responded in the only way they can – attack their single largest cost of production – the milk price. In turn, the dairy farmers of northeast Australia have turned off the tap.

Supermarkets may say, as Lion once did, that there needs to be a ‘rationalisation’ of the industry. What they can no longer deny is that their competitive marketing tactics are are not having an effect on farmgate milk price and the subsequent farmer response.

What is even more disturbing is that some of the best and most progressive farmers have been forced out by the economic circumstance or lack of confidence. This type of market rationalisation is blunt economic and social instrument rather than a finely tuned economic equation.

$1 milk and the flow-on to the T2 milk price is a crude and disrespectful strategy for management of supply chain cost and market share in the Australian dairy industry. Farmers have worked too hard and long and invested too much money to be treated like this.

If supermarkets and processors are genuinely interested in developing “long term strategic partnerships” with the supply chain they should be prepared to make a real and significant contribution to the effort.

Jon sums up his report by saying

Stop and think what you are doing Colesworths. You have taken a very blunt axe to the Australian dairy supply chain. In our view you are definitely in denial if you think that you and your shareholders have no responsibility for the long term social health and economic wealth of Australian agriculture.

This cartoon also from the XCHEQUE team sums it all up

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There are no free lunches Australia somebody is paying for the milk discount. This is not about consumer need its about Coles’ greed.

Lets not forget Coles 2011-12 pre tax earnings of $1.356 billion delivered by hardworking Australians who sadly believe their PR spin. Shame on you Coles

So God made a farmer

Coles aren’t the only people taking to social media to tell their story about their support for farmers and communities (and of course in Coles case they are jesting)

This Ram truck brand add first aired during the second half of the Superbowl XLVII,

The Ram Truck brand commissioned 10 noted photographers, including National Geographic icon William Albert Allard and renowned documentary photographer Kurt Markus, to document American farm life and what a compelling selection of images they are. They then took a moving speech, “So God Made a Farmer,” given by the late legendary radio broadcaster Paul Harvey to the National Future Farmers of America Convention in 1978 and overlayed it on top of the photo montage. I am confident you will agree the results are nothing short of spectacular .

“It had to be somebody who’d plow deep and straight … and not cut corners,” Harvey says in the speech. “Somebody to seed and weed, feed and breed … and rake and disc and plow and plant and tie the fleece and strain the milk. Somebody to replenish the self feeder and then finish a hard days work with a five-mile drive to church. Somebody who’d bale a family together with the soft strong bonds of sharing, who’d laugh and then sigh … and then respond with smiling eyes when his son says he wants to spend his life ‘doing what dad doe.’ So, God made a farmer!”

It doesn’t just stop there Ram aims to raise awareness and generate funds for the Farmers Federation of America’s hunger relief efforts in local communities across America. For every view, download or share of the two-minute “So God Made a Farmer” spot located on the brand’s website, Ram will make a donation to the National FFA Organization with the intent of generating $1 million. The brand is calling on the public to help reach the goal by viewing and sharing the video posted at www.ramtrucks.com/keepplowing.

The video was posted 6 days ago and has already had almost 9 million hits. I don’t know about you but I think this makes Coles self indulgent animation look quite crass

UPDATE 10th February 2013 ‘So God Made a Farmer’ is still currently attracting close to a million viewers per day. How big can it go?

Wow Coles just imagine what you could have achieved if you had a similar social conscience?????

Farm to glass the farmers side of the milk price war story for Coles

Coles is obviously very concerned about negative publicity they are receiving over their part in the current dairy industry crisis and are spending mega dollars on PR spin. This week Coles launched themselves back into the world of social media after many previous disasters with an animation full of half truths

In regards to my efforts to counter the half truths I don’t make billion dollars profits nor am I on million dollar bonuses so I cant afford to engage consultancies like Coles. So in this post I relying on various types of industry intel and my knowledge of the behind the farm to glass scene so I am happy to stand corrected Coles. The last thing I want to do is perpetuate half truths

I also cant afford to engage graphic artists to create expensive animations for me so I will have to work with what is out there and this nice little picture above that Dairy Australia has created to tell the farm to glass story is pretty impressive. So lets start with that

Fact– As as you can see there is quite a process involved to get the milk from the farm to your glass. Did you know along the way the industry directly provides more than 40,000 jobs.

Nobody (not even Coles) is going to deny the dairy industry is in crisis for all sorts of complex reasons. However admit it or not Coles is part of the problem and to date they are refusing to be part of the solution. So I think its fair to say that’s 40,000 jobs Coles is helping to put in jeopardy

Below are few more bits and pieces I have collated by chatting to people along the supply chain including a few Coles employees.

Lets start with those consumer complaints that when they walk into Coles the shelves that stock the Dairy Farmers brands are almost always empty.

Fact- This is because Coles staff are directed to refill the home brand shelves 3 to 1. So for example in one 12 hour period they will restock the Coles brand milk 9 times compared to the say the Dairy Farmers brand three times.

There is no mention in the Coles animation of their new direction in the milk prices wars of “offering $1 per litre milk through more than 600 Coles Express outlets Australia-wide in what is seen as a direct attack on the traditional corner shop – a sector which is already suffering in the cross fire supermarket giants’ food price war”.

Now as I mentioned in a previous post convenience stores are part of what is known as the route trade. This graphic below shows the route trade. How many people have family members who work in the route trade?

Fact- Coles are up 6 points and route is down 8 points in the last year.?

How safe are those jobs now that Coles is gobbling up the route trade business?

Lets get back to the dairy farmers and Coles apparent benevolence towards them .

This picture above is part of the animation Coles claim dairy farmers were getting 86c/litre before the milk price war and now their getting 90c/litre. As Angus White quite correctly reminds Coles in this comment on their YouTube page

Not only are they claiming dairy farmers get more that two to three times what they do they are actually claiming they are getting more now then what they did 2 years ago when the milk price wars started. If that’s what your consultant told you Coles I’d be asking for a refund

Coles is also spruiking “To further protect farmers, our milk contracts with processors all contain a “rise and fall clause” so if they increase their farm gate prices for farmers, the price we pay will rise.” This begs the question why haven’t the processors taken up the the “rise and fall clause” . Me thinks it might be fear what do you think?

I could go on and on like the Coles animation but we all know Coles is growing the size of their bank account not Australia.

As Halter so correctly points out here

We forget, there are no free ‘lunches’ as they say – every action has a reaction – somebody pay’s for the ‘discount’ and ultimately it’s all of us. How often did you hear this behaviour rationalized as ‘the need to take the opportunity to save on groceries’.

Fact – Coles recorded a 16.3 per cent increase in 2011-12 pre-tax earnings to $1.356 billion.

I think that fact alone says it all – strange its not in the animation!!!!

Coles feeding the greed not the need

When I saw this add the other day as a farmer I felt an instant empathy for the “workers”. I am confident you will understand why.

However where I saw the greatest parallel was Coles demands on the dairy cow. My analogy goes like this just like head honcho in the add it appears more and more Coles CEO Mr Ian McLeod and the Wesfarmers hierarchy see the cow as something that can be forced to deliver more, more, more and rewarded and valued less, less and less and turned on and off at whim essentially equating her to a machine.

Whilst I have empathy for the 24/7 man in the Nissan add I am confident he is on a big fat bonus just like Mr Coles McLeod to deliver more from less ( I hear on the grapevine Coles exec bonuses run into the billion dollar mark)

Yesterday I turned on my computer to see visits to my blog and reads of this post in particular had gone through the roof “Transparency and Integrity Coles is all we ask”

Now Coles has been inundating journalists in the past week hawking their “Don’t Blame Us” consultancy report from Freshlogic that is doing its best to tell us $1 milk is a just a fly in the cream of dairy industry crisis.

Distasteful as it maybe whether Coles like it or not they ARE part of the problem. What they don’t want to admit is they can be part of the solution. The solution however requires transparency and integrity. For a start transparency and integrity will give the farmers and the cows their dignity back and if I am not underestimating Australian consumers it will give Coles a lot of kudos.

Surely Coles consumer kudos is something to aspire to ? even if transparency and integrity are further down your list of priorities. ‘

The industry awaits your call Coles

Transparency and integrity Coles that is all we ask

As drought morphs into floods I reflect on the week that has been. I popped into ABC Illawarra to do an interview on the Archibull Prize launch and of course got asked for a quick grab on the Milk Price wars. Just a little quid pro quo what harm could that do?.

I haven’t heard the interview but it has almost necessitated me going into hiding. I was inundated by calls from radio stations and newspapers wanting to follow up my comments and then when I declined industry bodies who were asked to comment on my comments.

Coles is in damage control and the consultants have been engaged to tell Coles side of the story. Let me tell you mine in pictures. Pictures, I can now only bring myself to share because I know the rain will bring the grass and a little sanity back

Months of almost no rain has meant we have no grass to feed our cows and this has meant we have had to buy in feed to hand feed all our cows – all 1000 of them ( and yes that is very very very expensive)

Bare hills not much clover to be seen here

This means this mixer wagon goes up and down the road every day, all day bringing feed mixed at the Lemon Grove farm to all the cattle on the home farm and our young stock on our leased properties

In the last week we have had to feed the cows along this fence line as our mixer wagon went in for repair and the loan machine didn’t fit on the feed pad, so we had to sacrifice another paddock for the greater good

Not a pretty site

I look forward to sharing the good news that comes with the rain but back to the $1 dollar milk.

Coles what we need here is transparency and integrity then you wouldn’t need consultants to interpret and press releases for spin.

Firstly acknowledge that consumer well being is not your first priority, in fact your tills and your shareholders are front and centre all the way as this story reiterates ‘ Sydney drivers get slugged as supermarkets sweep profits’

Secondly that what your Down Down Down campaign and the subsequent Milk Price Wars is doing is setting a national artificial floor price for milk that is preventing the true market price of milk being realised. You can blame the export market, the processors and the drought and farmer inefficiencies ad infinitum. Cows are not machines and farmers would all be doing something else if they wanted to make a motza. Please remember Coles real people farm and we just want a fair price.

Transparency and integrity Coles that’s all we ask

Whilst this is a little light hearted relief thanks to @guswhyte it makes sense doesn’t it – after all milk is cheaper than water

What do safe sex and milk have in common you ask

Well the answer to that is a lot. According to 100 Great Things You Can Buy for a Dollar $1 you can buy one condom from a restroom dispenser for $1 and we all know thanks to Coles and heavily subsidised by Australian dairy farmers you can buy 1 litre of milk in this country for $1

With the two year anniversary of Coles declaring the milk price wars would begin they have bought the spin doctors in to garner support for this $1 milk abomination

With the help of specialist food market analysts Freshlogic Coles are once again crying “its isn’t my fault ” and absolving themselves of any responsibility for the dire state of the dairy industry in NSW, QLD and SA

Thanks to Freshlogic apparently here is the good news for milk processors

Sales of branded fresh white milk products have grown in Queensland by 11.5% and in NSW by 5.5% in the 5 months of 2012/13, while private label sales have fallen by similar percentages.
While private label sales grew in the 2011/12 year, the effects of this growth have been reversed by the effects of strong consumer support for permeate-free products in the first half of 2012/13.

Scary isn’t it fear sells and the “permeate free labels” on the milk processors brands has given them a short term gain for long term pain as the home brand/private labels now too spruik the permeate free claim

Whilst sales may be up its the value of the sale that counts. If you sell something for nothing then we all know no matter how big the number you multiply it by the answer is always nothing

This graph tells the real story. As you can see in NSW home brands (private label) hold 48% of milk sales market share. That’s almost 50% of milk being sold in NSW supermarkets provides little or no return to the milk processor. Coles has recently announced it is going to move the $1/litre milk campaign into its convenience stores and you can see why from the graph it is keen to smash the brands in the non-grocery* sector.

Whilst Coles claws back market share from anybody who dares get in their way, back here on the farm there isn’t a blade of grass to be seen and we are hand feeding 1000 cows everyday. Yes Coles you don’t control the weather but you certainly have a huge affect on our ability to cope with the vagaries

Coles can afford Freshlogic to tell the story they want told because they make billion dollar profits. I don’t need a spin doctor because I can see the devastation by just looking out the window

What else can you get for a $1 in this country. I don’t have a fax machine but I found out the other day that a local shop will charge me $1.45 per page for local transmissions and $2.85 per page for transmissions to anywhere else in Australia and $5.50 per page for any international transmissions.

Isn’t it a shame that supermarkets seem to think farmers and cows are machines but don’t value them as much.

As Milk Maid Marian says so well in her post today

But what those claiming to be “the voice of reason” dismiss is the effect ‘milk that’s cheaper than water’ has on the psyche. It signals to farmers that a fair go no longer matters. And that’s what hurts the most on Australia Day.

*The non grocery food and beverage sector is called the Route Trade in supply chain lingo. If you want to learn a little more some valuable insights can be found here

NSW Milk Shortage How dire is it

This picture was recently sent to me by an alert consumer

It is a sign proudly advertising Woolworths home brand milk as permeate free (how predicable was that) Two other things caught my eye. Firstly it warmed the cockles of my heart to see the farmer brands at shoulder height. For those of you who don’t have years and years of retail marketing behind you shoulder height product placement is prized shelf space. It means the customer doesn’t have to reach or bend and it gives your product the highest probability for customer selection

The other thing that caught my eye was “Made from NSW Milk”. Now I for one am very happy that Woolies is spruiking this as a lot of my milk goes into their home brand milk.. It also goes into both the farmer brands Pura and Dairy Farmers ( which you can also see in the photo at shoulder height).

What I do know is milk is being trucked into the Lion factory en mass from Victoria. I don’t know what is happening at the Parmalat factory but I imagine this heatwave and resultant milk from NSW farms plummeting further is also putting them under pressure to outsource milk from Victoria.

The Victorian farmers aren’t happy either See Farmers protest at Warrnambool and a recent Weekly Times poll saying 75% of farmers think the Australian dairy industry is in crisis

I wonder if Woolies and Coles know how dire the milk shortage is and how much longer can Woolies proudly claim their milk is sourced solely from NSW farms. If NSW farmers and processors continue to be put under huge pressure from the supermarket price wars and now drought will we see an Australia wide milk shortage? Glad I have house cow I am not keen on buying milk imported from China. Are you?

BTW Interesting article from Sydney Morning Herald this morning Risk of crying over spilt milk as brands drop off shelves – Read more: http://www.smh.com.au/business/risk-of-crying-over-spilt-milk-as-brands-drop-off-shelves-20130118-2cyq0.html#ixzz2IO5UUy4V