Story by Russ Grayson, August 2014


Our food is too cheap. We pay too little for our food…

I’ve heard this quite a few times from local food and sustainability types, and although I know they are trying to say that Australian farmers don’t get sufficient financial return for their farm products, the statement reveals their lack of understanding of Australia’s food value chain.

Their statement comes across as suggesting that paying higher prices for food would somehow enrich our farmers. This is nonsense. All it would likely enrich is our supermarkets, which is where most people obtain their food. One of the potential solutions to fair trade for Australian farmers is supermarkets paying them better and rejecting less of their farm production because they don’t like the look of it.

But it’s not all Coles and Woolworths’ fault, says Australian entrepreneur, Dick Smith, who set up Dick Smith foods to promote Australian food producers. He says the discount selling of Aldi and Cosco, two foreign-owned supermarket chains which have something like seven percent of the Australian grocery market compared to around 75-80 percent held by the Coles/Woolworths duopoly, forces the duopoly to reduce costs and returns to Australian producers.

In proposing higher prices, the comment I mention above also disregards the large number in this country who experience varying degrees of food insecurity. Drawing on the 1995 Australian National Nutrition Survey and the Aboriginal and Torres Strait Islander Health Performance Framework (2004-05), the Australian Institute for Family Studies identified who misses out on regular meals: 23% of unemployed people; 23% of single parent households; 20% of low income earners; 15% of young people; 20% percent of rental households and 24% of indigenous people. And the reason many miss out is that food is jettisoned when it comes to decisions on household expenditure because there are more pressing priorities. Making food more expensive would only worsen their situation.

Clearly, those sustainability and local food lovers would benefit from a more sophisticated approach to food pricing. Recently, I discovered a contribution to that on the News Ltd website. Entitled Why is food so expensive in Australia compared to other countries? and published on 14.07.14, the article put responsiblity partly in the saucepan of celebrity chefs and their TV shows as well as in the aisles of our supermarket duopoly.

First, the opener

But first, the article’s opening paragraph: “AUSTRALIA grows its own fruit and vegetables, we produce some of the world’s best meat and we’re surrounded by seafood-rich oceans.”

All true, but not the whole story. Sure, we produce fruit and vegetables but supermarket imports from low-wage, low-cost, low-food-safety-regulation countries like South Africa and New Zealand, which I include here because the kiwi’s import food from who-knows-where, package it and slap a misleading ‘made in NZ’ label on it, then export it, are undermining that production. It’s much the same for Australian fisheries, with cheap imports on unknown provenance swimming in from Asia.

We can see that this opening paragraph is simply too sweeping, too unnuanced, and as a scene-setter for the article it is somewhat misleading.

Celebrity chefs, celebrity prices

There’s no denying that food is now entertainment. Just check out the plethora of TV cooking programs. The best of these educate about the traditions and cultures around food, the rest are pure entertainment.

So how much responsibility does the cult of the celebrity chef and the food-as-entertainment industry have for the price of food in Australia, the article asks?

Some, it turns out, mainly because they condition their audiences to pay high prices for food.

According to a woman quoted in the article, Brigit Busicchia, a PhD candidate studying the politics of food at Sydney’s Macquarie University, when it comes to the cult of the celebrity chef and their TV shows…

” …shoppers had also been influenced by shows such as MasterChef or My Kitchen Rules, which encouraged food cults and an acceptance of premium prices.

“Not only are these shows invitations to consume more but they also turn food into a form of entertainment, making us think about food and its value in a very different way”.

Ms Busicchia said there was ” …more to food than just its commercial value, and inflating prices created problems for those on a tight budget.”

Foodie TV shows and the phenomenon of the celebrity chef are, of course, nothing more than the creation of the entertainment and book publishing industries as they seek new markets to increase book and magazine sales and attract more viewers that they can on-sell to their advertisers as audience numbers.

The dangers of celebrity chefs to Australian producers was disclosed by the critical reaction of Australian horticulture industry body, Ausveg, to Jamie Oliver’s advertising campaign for Woolworths. That led people who had been inspired by Oliver’s earlier work in nutrition to see his alliance with Woolworths as a sellout, and farmers to balk at the Jamie Oliver Tax requested by Woolworths for every box of produce supplied to support their Jamie Oliver marketing campaign.

Readiness to pay

It’s long been a perception about the organic food retail industry that pricing is based on the customer’s willingness to pay rather than on production, distribution and retailing costs plus a profit percentage markup. This isn’t limited to the food industry, of course.

While I don’t believe this is a universal phenomenon — for example, my fortnightly box of mainly organic food sourced from farmers for the most part close to Sydney and supplied by Ooooby is competitively priced to what I would pay in retail venues — I have seen prices for some organic products that approach almost orbital heights and are clearly out of the range of less affluent people. Overpricing — it’s called ‘price gouging’ in other industries — merely further cements organics in the perception that it has laboured from from years… that organics is for the affluent, the supermarket is for the rest of us.

The article suggests that this is no longer a phenomenon to do with organic food alone, and that the cult of the celebrity chef has much to do with that.

The supermarkets

The Economist Intelligence Unit’s senior economist, John Ferguson, quoted in the article, said we need more competition in the supermarket industry rather than continued domination by the duopoly.

Former chief executive officer of Kelloggs ANZ, Jean-Yves Heude, is quoted as estimating that…

” …shoppers are probably paying about 3-3.5 percent more for groceries due to the dominance of the two main supermarkets in Australia.”

He says that our smaller population is a factor in this, reducing the economies of scale that combine with longer food transportation lengths to maintain the price of food. As for Australian wages an salaries, Mr Heude said that’s a chicken-and-the-egg issue because prices could not be sustained if people did not have sufficient money to pay for them… ” …the cost of food ultimately had to be affordable for residents.”

Reading the article led me to discover Dick Smith’s critique of the newcomers to Australia’s supermarket industry — Aldi and Costco — and to discover the claims and counterclaims around the volume of Australian product they carry. Following that up will have to be for another time.

  • Do you believe food in Australia is too expensive?
  • What role do you believe celebrity chefs and foodie TV shows play in food prices?
  • What role do you believe the supermarket industries plays in maintaining high food prices?

Leave your response in the Comments box below this story.

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Published On: 13 August, 2014Categories: NewsTags: , ,