Countdown supermarket scandal

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#992965 23-Feb-2014 18:42

It's not just supermarkets.
Son worked for a soft furnishings warehouse...they supplied the likes of briscoes, Warehouse and so on...loads of places.
They got the same thing, prices dictated and so on.....

simon14

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#992974 23-Feb-2014 18:53

I always preferred Pak n Save/New World over Countdown simply because Pak n Save/New World are kiwi owned.

Not to mention, Pak n Save is cheaper than Countdown hands down.

Countdown is owned by Woolworths in Aussie who are trying to cut NZ products..... why would any Kiwi want to support that company?

On a diff note, I think they were silly to get rid of their two other brands - Woolworths and Foodtown. They should have kept two.

Kyanar

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#993033 23-Feb-2014 21:50

JWR:
I have been a long time and generally happy customer of Countdown.

However, there a two things I want to know...

1- Is Countdown blackmailing New Zealand producers by demanding retrospective paybacks?

2- Is Countdown's parent company (Woolworths (Australia)) dropping New Zealand products in a marketing campaign in Australia?

For 1, I am happy to wait for the Commerce Commission results.

However, for 2, I want to know now!

Sources have made claims. NZ media have reported claims, without any investigation as far as I can tell. Countdown (NZ) have denied it all.

What is the truth of it?

I am pro-trade and definitely not anti-Australian.

But, I will happily boycott any anti-New Zealand companies.

Good news, they have a "shop online" option like countdown.co.nz - http://www2.woolworthsonline.com.au/.

It has a grand total of SEVEN products that say "NZ" or "New Zealand" on them, and about 400 with "Australian", "Australia" or "Aussie" on them. Not scientific, but not promising.

mattwnz

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#993061 23-Feb-2014 23:02

simon14: I always preferred Pak n Save/New World over Countdown simply because Pak n Save/New World are kiwi owned.

Not to mention, Pak n Save is cheaper than Countdown hands down.

Countdown is owned by Woolworths in Aussie who are trying to cut NZ products..... why would any Kiwi want to support that company?

On a diff note, I think they were silly to get rid of their two other brands - Woolworths and Foodtown. They should have kept two.

They still have the Fresh Choice brand, which they appear to be using for more boutique stores, similar to how foodstuffs have New World. I agree that Pacnsave is overall cheaper, although not on everything. I prefer my meat from countdown, as pacnsaves isn't great, and they often pack the meat to hide the fat underneath it. Countdowns fruit and vege though is pretty poor as after a few days it has spoilt, but then pacnsaves isn't much better. This is an area where farmers markets excel.

scuwp

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#993108 24-Feb-2014 07:48

simon14: I always preferred Pak n Save/New World over Countdown simply because Pak n Save/New World are kiwi owned.

Not to mention, Pak n Save is cheaper than Countdown hands down.

Countdown is owned by Woolworths in Aussie who are trying to cut NZ products..... why would any Kiwi want to support that company?

On a diff note, I think they were silly to get rid of their two other brands - Woolworths and Foodtown. They should have kept two.

...and you believe that just because they are NZ owned they won't use every trick in the book to wrangle better prices out of their suppliers to increase market share and profit? Naive much?

As for countdown in Aussie supporting local products, I am not sure what the issue is here really? Don't we prefer our shops in NZ to support NZ made products by preference. Can't have it both ways.

Lazy is such an ugly word, I prefer to call it selective participation

sbiddle

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#993120 24-Feb-2014 08:34

scuwp:
simon14: I always preferred Pak n Save/New World over Countdown simply because Pak n Save/New World are kiwi owned.

Not to mention, Pak n Save is cheaper than Countdown hands down.

Countdown is owned by Woolworths in Aussie who are trying to cut NZ products..... why would any Kiwi want to support that company?

On a diff note, I think they were silly to get rid of their two other brands - Woolworths and Foodtown. They should have kept two.

...and you believe that just because they are NZ owned they won't use every trick in the book to wrangle better prices out of their suppliers to increase market share and profit? Naive much?

As for countdown in Aussie supporting local products, I am not sure what the issue is here really? Don't we prefer our shops in NZ to support NZ made products by preference. Can't have it both ways.

Many of the so called tactics claimed in the media last week are the norm in many retail industries. They are not specific to Countdown.

There are a lot of NZ companies who do very well out of Woolworths. Griffin's for example make many of their of their Home brand biscuits, a market in Australia that's almost as big as the Griffin's brand in NZ.

The biggest issue with NZ is that we don't have COO (country of origin) labeling. As Australia and NZ have joint food standards this was supposed to be part of it, however in 2007ish Australia adopted it, but because of a lot of lobbying in NZ by Federated Farmers who believed it's anti competitive, NZ backed away from adopting it.

IMHO Australians are a lot more patriotic than NZers are and there has is a big push by consumers to support Australian manufacturers. NZers on the other hand don't seem to care where a product comes from, they just care about getting the cheapest price.

MikeB4

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#993154 24-Feb-2014 10:02

I recall from many many years ago when I completed my Business Qualifications we studied the "Woolworths" method and in particular its affect on Ralta, there are similarities and show that this type of
activity is not new. However by being 'not new' does not make the practices right and I believe that they need to be addressed.

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

Fred99

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#993157 24-Feb-2014 10:08

sbiddle:

Many of the so called tactics claimed in the media last week are the norm in many retail industries. They are not specific to Countdown.

There are a lot of NZ companies who do very well out of Woolworths. Griffin's for example make many of their of their Home brand biscuits, a market in Australia that's almost as big as the Griffin's brand in NZ.

The biggest issue with NZ is that we don't have COO (country of origin) labeling. As Australia and NZ have joint food standards this was supposed to be part of it, however in 2007ish Australia adopted it, but because of a lot of lobbying in NZ by Federated Farmers who believed it's anti competitive, NZ backed away from adopting it.

IMHO Australians are a lot more patriotic than NZers are and there has is a big push by consumers to support Australian manufacturers. NZers on the other hand don't seem to care where a product comes from, they just care about getting the cheapest price.

While the obstacles to getting "shelf space" might be the norm for many industries, the retrospective payments claimed to have been used as blackmail against suppliers aren't.
I doubt whether anybody is going to be able to come up with hard evidence to prove to the Commerce Commission that this happened, surely no supermarket negotiator would have been dumb enough to put any such threats on paper - or admit that they made such a threat. So the evidence will be hearsay, countered by implied or direct suggestions that complainants who come forward are there because of "sour grapes". It's not going to be easy to find existing suppliers who will come forward.

I don't expect much as a result of the investigation. The most I'd hope for is that at least the general public might get some insight into how business works, but I'm predicting that as there won't be any illegal activity proven, the public will be assured that all is above board - and there's nothing to worry about.

NZ doesn't have compulsory country of origin labeling, on moral "free trade" grounds as it's seen as an impediment to international trade (and is - in the recent Aussie case - and also in the case of the "food miles" threat to NZ exporters from the UK a few years ago). "Made from local and imported ingredients" labels are practically worthless - and if legislation demanded that "% local content" needed to be displayed it creates potential nightmares to manufacturers - they may routinely buy various local and imported raw materials depending on seasonal availability etc.

Countdown voluntarily place country of origin labeling on all fresh produce in the supermarkets.
Their "home brand" also seem to have COO labeling. I just checked my pantry, the only "home brand" product I could find is a 2l bottle of Canola Oil, which contains the statement "Made in Malaysia from local and imported ingredients". AFAIK they don't grow Canola/Oilseed rape in Malaysia - it's far too hot. It is however an international traded commodity transported in bulk tanker shipments, Malaysia/Singapore is a major distribution hub. The product itself could have come from anywhere. It's packed in to (probably locally made) PET bottles and labelled in Malaysia.

I agree that Aussies are more patriotic than NZers. However a lot of this is superficial, there may be a "save the Aussie Battler" sentiment reinforced by media coverage, but when Australian icons like the Ford Falcon and Holden are under threat, they wouldn't get the gorse out of their pockets. It's much easier to take a moral stand and financial hit when you're buying a $3 jar of peanut butter than when you're spending half a year's wages in one hit.

Sounds like I'm supporting the supermarket chains. I'm actually not. While the whole market model probably succeeds in delivering the products made by major (usually multinational) corporations to the consumer at the lowest cost, it disadvantages small producers, discourages innovation, and reduces choice. The only thing we can probably do about it is to vote with our feet, go to farmer's markets, local butchers, specialist shops etc.

sbiddle

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#993170 24-Feb-2014 10:27

Foodstuffs actually introduced voluntary COO labeling on all fresh food products, and this was followed by Progressive introducing the same policy. Their home brand is going to have COO labeling as all home brand products are labeled for both markets.

Australia is going through a stage of losing a lot of locally made products and I'd argue are simply seeing what NZ saw in the late 90's. We seemed to build a bridge and get over the fact it wasn't necessarily economic to produce many products in NZ, however Australia couldn't, so relied on massive Govt and State subsidies to keep inefficient production afloat. 10ish years on they're now facing an economy that is going backwards after the iron ore boom, and less money to pump into subsidising local production.

trig42

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#993178 24-Feb-2014 10:47

sbiddle:
scuwp:
simon14: I always preferred Pak n Save/New World over Countdown simply because Pak n Save/New World are kiwi owned.

Not to mention, Pak n Save is cheaper than Countdown hands down.

Countdown is owned by Woolworths in Aussie who are trying to cut NZ products..... why would any Kiwi want to support that company?

On a diff note, I think they were silly to get rid of their two other brands - Woolworths and Foodtown. They should have kept two.

...and you believe that just because they are NZ owned they won't use every trick in the book to wrangle better prices out of their suppliers to increase market share and profit? Naive much?

As for countdown in Aussie supporting local products, I am not sure what the issue is here really? Don't we prefer our shops in NZ to support NZ made products by preference. Can't have it both ways.

Many of the so called tactics claimed in the media last week are the norm in many retail industries. They are not specific to Countdown.

There are a lot of NZ companies who do very well out of Woolworths. Griffin's for example make many of their of their Home brand biscuits, a market in Australia that's almost as big as the Griffin's brand in NZ.

The biggest issue with NZ is that we don't have COO (country of origin) labeling. As Australia and NZ have joint food standards this was supposed to be part of it, however in 2007ish Australia adopted it, but because of a lot of lobbying in NZ by Federated Farmers who believed it's anti competitive, NZ backed away from adopting it.

IMHO Australians are a lot more patriotic than NZers are and there has is a big push by consumers to support Australian manufacturers. NZers on the other hand don't seem to care where a product comes from, they just care about getting the cheapest price.

(My Bolding)

I think that is the issue - they are not so much removing NZ made products (although that could be happening), but they are looking to change their house-brand manufacturing to Australian based manufacturers. So if Griffins in NZ is currently making Select or Home Brand biscuits, which undeniably would be worth a lot of money to them, that is what is under threat.

I agree the Shane Jones thing is a bit of populist grandstanding, and I also don't doubt anything he has said is true, but both chains will be doing it (not sure about retrospective payments though, but there may be something in a supply contract somewhere that says if X shelf space is given, $Y sales are expected = $Z bottom line, which you the supplier guarantee).

I thought the Boss of WW Australia's comments in the paper over the weekend were very patronizing and he came across as a real a$$hat. He should have just stayed quiet - instead he came across saying basically: 'Shut up your whinging NZ, we are doing you a favour by being there, you should be grateful to us and keep quiet!'

surfisup1000

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#993181 24-Feb-2014 10:51

simon14: why would any Kiwi want to support that company?

Because the local new world is expensive & countdown is the next closest.

We have pak'n'save but it is a long drive. But, I do like pak'n'save better and use them if in the area.

sbiddle

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#993214 24-Feb-2014 11:51

trig42:
I think that is the issue - they are not so much removing NZ made products (although that could be happening), but they are looking to change their house-brand manufacturing to Australian based manufacturers. So if Griffins in NZ is currently making Select or Home Brand biscuits, which undeniably would be worth a lot of money to them, that is what is under threat.

And some of this won't come down to where the product is made, but the price. The NZ/AU exchange rate is now at levels not seem for 5 years. When you're talking about multi million dollar contracts a 15% variance in the $ vs what it was a year ago is fairly significant.

I'm not defending Woolworths in any way (because to be honest I can't stand them) but it wouldn't surprise me if some of their negotiations are over products they source in both AU and NZ and price differences between both. Clearly having distribution sand sales staff in NZ is a cost companies have to absorb and Woolworths could simply start import product from directly and bypass the NZ supply chain if they wanted which they have done in the past with imported Heineken.

Geektastic

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#993714 24-Feb-2014 22:38

mattwnz: I'm not happy how the guy in the article said that he found NZ anti Australian. .

His opinion is that he found it anti-Australian. You can't really be happy or unhappy with someone else's personal experience.

My personal experience is that NZ is generally anti-any other country, especially if it claims to be better in any way or suggests that NZ is worse in some way.

You may not like that but it is my experience. Australia is similar in that regard, although I have never lived there, but based on Australians I have met when travelling and reading in the meeja etc.

I can't explain it - most Brits couldn't give a monkey's about what A N Other thinks of Britain and certainly wouldn't get defensive if someone claimed that, say, the Germans built better cars, had better supermarkets or played better football. My guess is it is somehow related to the age of a nation and how secure it feels. After 702,000 years (the oldest human remains found in Britain date from 700,000BC) or so I guess we feel pretty comfortable in our Britishness.

As regards the supermarket issue the problem is easily solved.

1) Regulator with legal power who cannot be over-ruled other than by a Court

2) See (1)

All this 'code of conduct' stuff is just BS. No one making money plays nicey nicey - you need tight laws with harsh penalties for breaking them. Like get caught fleecing your suppliers in contravention of the agreed legal terms and get fined 10% of your turnover kind of harsh.

mattwnz

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#993723 24-Feb-2014 22:41

Geektastic:
mattwnz: I'm not happy how the guy in the article said that he found NZ anti Australian. .

His opinion is that he found it anti-Australian. You can't really be happy or unhappy with someone else's personal experience.

Yeap his personal opinion, but he is alienating his own customers in NZ by saying that sort of thing in the NZ media.

Kyanar

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#993837 25-Feb-2014 08:53

sbiddle:
There are a lot of NZ companies who do very well out of Woolworths. Griffin's for example make many of their of their Home brand biscuits, a market in Australia that's almost as big as the Griffin's brand in NZ.

I'm not sure where this "Griffin's is an NZ company" thing comes from, but it's not. It's almost wholly owned by Pacific Equity Partners, an Australian private equity fund. The shares that aren't owned by them are owned by the employee share scheme and about 1% by who I can only assume are the original owners. Basically, Griffin's is Australian.

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