Aussie parochialism knobbles kiwi suppliers, Coles says

Monday 19th November 2012

New Zealand food exporters will struggle to crack one of Australia's biggest supermarket chains unless they do something different as parochial Australian consumers demand locally-made items lining their grocery aisles.

Supermarket chain Coles, one of the major two players across the Tasman, won't stock kiwi products if they're indistinguishable from Australian-sourced suppliers, the retailer's general manager of meat, dairy and deli, Allister Watson, told New Zealand manufacturers and suppliers last week.

"The opportunity for New Zealand companies is to come to Australia and talk to Coles about what do they do differently," Watson said. If New Zealand firms come with undifferentiated products, "you may as well stay at home."

Watson, an ex-pat New Zealander, was speaking at the Food and Grocery Council annual conference in Melbourne on Friday, in a presentation titled 'Growing your business with Coles'. The FGC represents the interests of New Zealand grocery retailers, suppliers and firms linked with the supply chain.

Australian consumers want to back locally-made products, which feeds into their buying decisions and sets a higher threshold for New Zealand products, Watson said.

Where New Zealand suppliers can compete with their Australian rivals is in taking better and more inventive products across the Ditch, he said.

"There's a lack of innovation in a lot of categories in Australia - there's much more innovation in New Zealand which I believe could come over," Watson said. "If you have something new and unique, something compelling, then certainly, we're all ears."

That means New Zealand companies will have to latch on to their competitive advantages, which include being able to manufacture products 25 percent cheaper than in Australia due to the exchange rate and cheaper labour costs, he said.

The FGC used the annual meeting to announce a new programme to help its members tap international export markets.

Board member Andrew Smith will head up a new council initiative looking at ways the lobby group can leverage its membership to make it easier for them to reach international markets.

"In the short-term, we'll look at reducing barriers to entry for FGC companies to get into export markets," Smith said.

Michelle Templar, New Zealand Trade & Enterprise regional director Australia Pacific, told the conference exporters couldn't just simply turn up across the Tasman and expect sales growth.

"The challenge is not about whether your product's unique, it's who will buy it and how to get to that person consistently," Templar said.

The FGC's increasing focus on ramping up export numbers for its membership comes as the government looks to triple food and beverage exports to some $65 billion by 2025.

The aspiration seeks to reach that target by not only increasing the volume of products made, but also by adding to the value of the goods produced.

Disclaimer: Paul McBeth travelled to Melbourne courtesy of the FGC, which covered his airfares and accommodation.

BusinessDesk.co.nz

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