Aussie parochialism knobbles Kiwi suppliers, Coles says

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

Supermarket chain Coles, one of the major two players across the Tasman, will not stock Kiwi products if they are indistinguishable from Australian-sourced suppliers, the retailer's general manager of meat, dairy and deli, Allister Watson, told New Zealand manufacturers and suppliers in Melbourne.

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

Mr Watson, an ex-pat New Zealander, was speaking at the Food and Grocery Council annual conference on Friday, in a presentation titled Growing your business with Coles. The council 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, Mr Watson says.

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

"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," Mr Watson says. "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% cheaper than in Australia because of the exchange rate and cheaper labour costs, he says.

The council 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," Mr Smith says.

Michelle Templar, New Zealand Trade & Enterprise regional director Australia Pacific, told the conference exporters could not 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," he says.

The council'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.

(BusinessDesk)

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3 Comments & Questions

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Coles are an extremely difficult company to deal with. They say one thing then the people who made the decisions are swept aside or removed. This is usually followed by an absolute reversal of policy. Seen it many times.

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No doubt Mr Watson's advice will fall on deaf ears given the average Kiwi would sell their own mother if it meant getting 5% of something made in China rather than in their own community.

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I notice on Wiklpedia that Coles own Liquorland, Bunnings, Target and KMart.
Perhaps Kiwis consumers could dish the dirt to Coles and boycott all of their New Zealand offshoots?

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