I've mentioned earlier how useful a recent show is on the ABC. Just to give you some idea what it is about, I've copied their episode guide for last Thursday's episode that you can watch here or below. The Checkout is on the ABC every Thursday.
MILKING IT
Supermarket brand milk or not, Craig finds out who’s telling white lies about milk prices, and who’s helping farmers.
Coles has just announced a new front in the milk price war. And they have taken it a step further than Woolworths. Rather than just buying from farmers and using existing processors, Coles will encourage the remaining farmers cooperatives to become processors themselves.
Coles will sign long-term contracts with the farmers’ collectives Norco and Murray Goulburn for milk. And these collectives will invest in processing facilities. As always, the promise is that farmers will get more money for their milk. As well as getting the certainty of 5 and 10 year contracts.
Right now, Murray-Goulburn have more influence on farm gate prices than anyone, although only a small proportion of their dairy output is actually fresh milk. This deal changes Murray-Goulburn’s relationship with the wider market. What effect it will have on the farm gate price for other farmers is unclear. Here is theperspective of one farmer who supplies Murray-Goulburn.
Coles is currently run by a coterie of former Tesco employees so it is perhaps unsurprising that this latest step mimics the approach in the UK. British supermarkets have moved to contract with farmers and cut the margin the processors make. This has led to higher farm gate prices for the farmers contracting with Tesco – but also more expensive requirements for them. Similarly, a lot of additional costs are expected for Australian farmers collectives, with Murray Goulburn spending $120 million on milk processing plants.
For consumers, this deal may lock in lower milk prices well into the future. Currently a lot of the savings from cheap milk come courtesy of the supermarkets cutting their own profit margins. If they can reduce processors’ margins instead, and share those gains with the farmers’ collectives, then lower milk prices will be more sustainable. This differs from the Woolworths model, which will only provide a premium farmer-made brand.
But this new deal won’t come into effect for a while yet. And it is too early to know what its consequences will be for consumers and farmers in the long term. What is clear is that it is bad news for the processors.
Find out What's In Your Milk in a report from CHOICE.
TRICKS OF THE TRADE MAGS
Jules compares the ads we see, to the way products are advertised to retailers … and discovers the slushie with a 980% mark-up!
PRODUCT TAMPERING : STRAWBERRY INDULGENCE
The Checkout redesigns the packaging on popular products to show you what’s really in the box. This week Strawberry Indulgence. Mmmm, crushed bettle colouring.
PARALLEL CONSUMERVERSE : IF GROCERIES WERE FOXTEL
Want a banana? No problem, that’s part of our Fruit & Veg Platinum package, all yours for just $20 extra, or $40 in 3D.
FUNERAL PLANS
Jules investigates whether funeral plans are worth dying for.
For a CHOICE report on funeral insurance go here.
SEARCH FOR THE MOST EXPENSIVE WATER
The search for Australia’s most expensive bottled water continues, and the search for Australia’s most expensive web access begins #mostexpensive, post on on our Facebook wall, or email tipoff@thecheckout.net.au
If you don’t believe us that a 750ml bottle of water at Altitude Restaurant was $15 check out their menu.
IF I COULD SAY ONE THING : ALAN KIRKLAND
Alan Kirkland from CHOICE says you shouldn’t be seduced by credit card reward schemes.
DATA MINING
Kirsten finds out how retailers knew a teenager was pregnant before her parents did, in a story about the way our data is collected and used.
Click here for a story by CHOICE about supermarket loyalty programs offering very little value but collecting enormous amounts of your personal data.
PRODUCT VS PACKSHOT : BUBBLE O BILL
Looks great on the outside, but what’s on the inside? This week Bubble O Bill. If you’ve got a good product vs packshot post a photo on our Facebook wall.
So what do you think of The Checkout? Has it helped you in your daily life?
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