Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

For many years, Coles and Woolworths have dominated Australia's retail grocery sales with estimates placing their combined grocery market share at over 70 per cent. To date, most of the criticism, and indeed concern, about the duopoly has been the squeeze they have been able to apply to local food producers and the very low prices Coles and Woolworths pay for their produce. An additional concern has been the ability of the two retailers to completely exclude a product from their shelves or poorly display a product and effectively force a food producer out of the market. I accept, however, that there is some fierce competition between the two retailers and that the competition has kept retail grocery prices down. The drastic fall in milk prices is an example of that, and today a litre of unbranded milk costs about half of what branded milk sold for a year or so ago.

However, there is another growing concern emerging about the duopoly. Sales of Coles' and Woolworths' own brand products are steadily increasing. These are unbranded grocery products, with vague information about their origin, being sold at prices 20 to 30 per cent lower than the known brands. According to a report on 28 May 2012 by Melissa Fyfe and Royce Millar in the Age:

In 2007, home brands made up 14% of grocery items sold in Australia, now they are 25%. Home brands make up 50% of UK groceries, 35% of US groceries. Nielsen predicts home brands will jump to 40 per cent of Australian grocery items within five years.

With more and more of these products produced offshore in lower cost countries, food producers in Australia, both growers and manufacturers, are being squeezed out of the market. That of course means job losses, but there are other consequences. Foods produced overseas is in many cases produced using chemicals that have either been banned in Australia or under conditions where safe levels of those chemicals have been exceeded. Even where bans do apply, monitoring and enforcement of the bans is less likely to occur in developing countries.

The consequence of more home-brand products being sold by Coles and Woolworths is that Australians will consume more foods produced offshore and, in turn, will very likely be exposed to more food-related health risks than presently is the case. Even with Australia's very robust biosecurity screening, the reality is that relatively few imported goods are tested. Furthermore, chemical levels only become an issue if the levels exceed a set threshold. Thresholds are at best guidelines and can never provide absolute certainty. The health effects of high levels of chemicals, even within prescribed safe levels, may not become apparent until years later. A subsequent report in the Age stated:

An analysis by The Age of ''failed food'' results since 2010 shows 1050 imported foods, or an average of one consignment a day, have not met Australian standards. Almost 400 foods were stopped at entry because of micro-organisms such as E. coli, 246 failed because they contained banned additives or substances, 228 contained contaminants and 138 failed chemical analysis.

Let me make it absolutely clear that not all Australian produced foods always comply with local health standards. However, by international standards, Australia has a relatively good food compliance regime.

There is of course an additional concern about all of this. The offshore countries where the food is produced are very likely to be developing countries with cheap labour and less regulation. That is why they can produce cheaper food. Workers in developing countries are also less likely to be aware of the chemical risks they are exposed to in producing those foods. Food production and processing provide job opportunities and economic growth. Supporting local industry opportunities in developing countries is one of the best forms of assistance that we can provide to them. However, Australia should not be a party to exploiting or profiting from placing at risk people in other countries.

For a combination of reasons, offshore food production is of interest to many consumers, and they want to be able to make an informed choice about the food they purchase—a choice about what food they consume, how it is grown, where it is grown and how it is processed. They can only do that if a clear, unambiguous food labelling system is in place and if they have confidence in our biosecurity checks. As food imports grow, so too will public interest in this issue. I know that this is a much more complicated issue than many people believe it to be, but I also know that we can do much better to inform Australian consumers about the food that they consume. It is in the health interests of the nation for us to do so.