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Issue #1602      July 17, 2013

Cheap groceries costing the earth

It was Jeff Kennett who sparked the sudden media interest in the plight of “fresh food” in Australia. The former Victorian Premier, as keen on a fresh loaf as anybody else, was incensed that the bread he was tempted to buy at Coles was labelled “Made in Ireland”. Australian Competition and Consumer Commission (ACCC) chief Rod Sims got onto the matter and eventually a case was brought against the giant supermarket chain for misleading people that their bread is made from scratch in their stores.

The higher-ups had seemingly caught on to what the rest of us have known for years – that, in this era of capitalist globalisation, our food has to travel a hell of a long way before it winds up in our stomachs.

The health benefits of fresh food are well known while the ultimate consequences of all these extremely well-travelled supermarket purchases can only be guessed at. The recklessness of burning huge amounts of fossil fuels to get “fresh” food to far flung markets is of no concern to global food monopolies, either.

Kennett’s Irish bread has become symbolic of a problem that capitalism can’t solve because it involves the basic way it operates. Capital scours the globe looking for any minimal advantage to maximise profits. In this instance, frozen dough is sent over 17,000 kilometres from Ireland to Australia to save cents on every loaf. Giant factories like Hiestand in Switzerland are in on the act, too. If we ever thought that, at least, food processing jobs were safe from job-crunching effects of globalisation, we can think again.

The effects of $1 and $2 a loaf bread on convenience stores have been devastating. A piece in The Australian Financial Review last month noted that Australian bakers Goodman Fielder and George Weston are trying to restore margins by charging delivery fees and refusing to take back their unsold bread. Local bakery sales have slumped since the cut price loaves hit the shelves in the big two supermarkets and their allied petrol stations.

“The sad thing for Australia is that international companies have production lines massively larger than our own,” Mr Kennett said, “so therefore our duopolists can easily import just the off-runs, to put it that way, of some of these and sell them cheaper but at a higher profit, than our local producers can produce.” Wake up and smell the capitalism!

Obviously, access to such vast international markets gives the duopolists a big stick to deal with local suppliers. A race to the bottom is underway for many lines previously thought immune to competition from low-wage centres. Asian cauliflowers and cabbages are now squeezing locally-grown ones out of the “fresh” produce sections of the big supermarkets. “Our labour makes it just so expensive compared with Third World labour arrangements,” Victoria University Institute for Supply Chain and Logistics director Dr Hermione Parsons said recently. As poor as the piece-rates are on Australian farms, they can always go lower if the monopolists get their way.

Australia is still a net exporter of food but the times are changing. Fruit growers were among the first hit by the globalising trend and it has some way to play out. More than 750,000 trees are expected to be uprooted and burned soon in northern Victoria’s Goulburn Valley after demand from the SPC Ardmona cannery dropped by half since April. Third generation growers are fighting to stay on farms established by soldier-settlers in the late 1940s. Elsewhere, farmers are banding together to fight the encroachment of coal interests keen to begin “fracking” for gas on prime agricultural land.

Jeff Kennett has apparently joined that group of former Liberal leaders who spent their political lives serving big business interests but now wish to patch up some of the damage. He wants a national agriculture and water plan to do something about the trends that disturb him in his retirement.

He says he raised this with former PM John Howard in 1996 but, obviously, nothing was done to rein in the corporate interests wreaking havoc in rural Australia. We needn’t expect change from the ACCC, either. They have previously “investigated” the purchasing practices of Coles and Woollies and found nothing wrong. Promises from the Coalition of a “root and branch” review of the Competition and Consumer Act ring hollow. The parlous state of “fresh” food in Australia and across the world is one more demonstration that, while we might be able to afford Irish bread in our weekly shop, we cannot afford capitalism any longer.   

Next article – Edward Snowden: A conscience, waiting for a cause

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