Industry representation

Brismark represents the marketing sector of the horticulture industry to government and other groups. Some of the recent positions taken by Brismark on industry issues are listed below.

Major issues include the Horticulture Mandatory Code of Conduct , Interstate Biosecurity Requirements, Health Claims through Food Standards Australia and New Zealand (FSANZ), and the future of the Central Market System.

Mandatory Code

A review of the Horticulture Code of Conduct was promised by the Rudd Labor Government, in a media statement issued in the lead up to the November 2007 election. This review was welcomed given what had been the Coalition's ongoing refusal to commit to a cost effective, workable and commercial outcome of this issue. The Rudd Labor government subsequently directed the Australian Competition and Consumer Commission (ACCC) to evaluate the effectiveness of the Horticulture Code of Conduct as part of Federal Labor's national grocery pricing inquiry.

It should be noted that the first review of the Retail Grocery Industry in 1999 recommended that a mandatory code be introduced into the whole retail grocery industry, so as to address the potential for the misuse of market power by the major retailers.

It appears that both sides of politics have conveniently overlooked this issue, despite the fact that it is repeatedly raised by growers and other grocery industry suppliers, as the major issue of concern.

This highlights the hypocrisy of Growcom and the Horticulture Australia Council (HAC) who chose to respond to Labor's announcement with a further push for greater regulation of wholesalers, ignoring yet again what growers themselves have been saying regarding extended coverage of the Code to address the misuse of market power issue.

Grower representative organisations, including AUSVEG, the National Farmers Federation and even Growcom, have persistently called for red tape reduction in the horticulture industry. At the same time, Growcom and HAC have sought increased regulation of wholesalers with an added cost for all growers, without the ability to contract out of some of the more onerous, inflexible and costly requirements that the Code imposes.

The ACCC released its report on 31 July 2008. It included 13 recommendations to improve the Code’s effectiveness including extending coverage to retailers, processors and exporters.

These recommendations were referred to the Horticulture Code Committee in October 2008 to advise the Australian Government in responding to the recommendations. The Committee’s primary term of reference is to consider the implications of implementing the recommendations.

Brismark is supportive of a number of the recommendations and is concerned about the possible negative impacts of others. It is vitally concerned that recommendation 4 is implemented without amendment in order to address the unworkability of the existing Code. Recommendation 4 would allow a merchant to specify a formula for calculating price based on the amount received from the sale of the produce to a third party.

Brismark and BML have made submissions to the Horticulture Code Committee. It is hoped that the process will result in a Code that is more cost effective, commercial in its application and less anti-competitive.

Interstate Biosecurity Requirements

The current biosecurity inspection regime is making it tougher for Queensland producers to trade interstate. Regulations vary from state to state and some are more stringent than those faced by international importers.

Brisbane Markets' wholesaler representative body Brismark wants growers to add their voice to pressure governments to address the issue.

Many of the current requirements are based on international regimes and do not take account of smaller shipment sizes often associated with interstate trade. The cost of inspections for interstate trade falls most heavily on Queensland producers. For example, Queenslanders sending produce to Perth must supply 600 pieces of product per lot for inspection while markets such as Japan, Taiwan and China only require a 2% sampling rate. This makes smaller domestic shipments uneconomical.

On top of this the inspection regimes are unclear, creating confusion.

The additional costs involved in meeting the varied biosecurity regulations is adding to the price of the fresh produce, potentially leading to imported produce becoming more attractive than Queensland fruit and vegetables in some State markets.

While no one disputes the need for controls, the current system is ambiguous.  It is particularly disturbing as Federal authorities are actively pushing for freer access to foreign markets after recognising similar international trade barriers can restrict the industry.

Brismark is calling for:

• Clear, explicit readily available guidelines rather than the current ambiguous requirements
• Uniformity between States
• Maximum sampling rates of 2% or 600 items, which ever is less, rather than a set number of pieces that does not take into account the size of the shipment
• Reduced requirements where past practice and scientific evidence supports a reduction
• Acceptance of Interstate Certification Assurance arrangements that allow approved businesses to certify that product meets quarantine protocols 

Growers are urged to lobby the Federal Agriculture Minister to seek support in lobbying the various State Ministers to address these current interstate trade issues. 

To ACT NOW and register your disapproval of this system, please forward correspondence to:

Federal Agriculture Minister
Room MF26
Parliament House
Canberra ACT 2600 

Health Claims - FSANZ

Brismark and Brisbane Markets Limited (BML) are in dialogue with Food Safety Australia & New Zealand to raise awareness about food safety and health claims related to fruit and vegetables.

Proposed legislation that could see manufactured and fortified goods having labeling and promotional advantages over natural foods, like fruit and vegetables is currently under discussion with FSANZ. The organisations have lodged a joint submission to FSANZ during its public consultation period.

While welcoming FSANZ's move to tighten labeling and health claims legislation, the key concerns are: 

• Manufacturers have the ability to manipulate serving sizes to make them look more attractive on their labels to consumers who are trying to compare competitor's products.  Whole fruits and vegetables remain the size nature made them and rarely carry labels.  
• High-level health claims (those that link a food with the prevention of a disease) must be scientifically proven in Australia and New Zealand. Manufacturers have the incentive to invest heavily in doing this research as they are selling branded products.  The same incentive does not exist for the majority of fresh produce. 
• Manufactured foods can be fortified (have vitamins and nutrients added to them), allowing manufacturers to make health claims. This cannot be done with fresh produce and yet research has shown that nutrients in fresh fruit and vegetables are more readily absorbed and utilised than those in manufactured foods. 
• More education must be given to growers, wholesalers and processors to provide guidance on meeting the legislator requirements.

The organisations also lobby FSANZ and Food Safety Queensland on food safety issues and the possible introduction of legislation for food safety standards in all plant and plant-related products. While the Brisbane Produce Markets has a high standard of food safety, we are mindful of the risks associated with food-borne pathogens.

Wholesalers in the Market implement a range of Hazard Analysis Critical Control Point programs in their handling of fresh produce such as SQF 2000 and Woolworths Quality Assurance. These programs provide

• Quality management systems to identify food safety and quality risks.
• Validate and monitor control measures.
• Commitment to producing and trading safe, quality food.
• Consumer confidence in your products.

Brismark will continue to lobby FSANZ to achieve workable legislation in food safety and health claims for the fruit and vegetable industry.

Central Market System

There is often an oversupply of some produce lines entering the Central Market system. 

The result is falling prices and strained grower/wholesaler relationships. In addition, the major supermarket chains have over recent years persued a policy of direct supply, bypassing the Central Markets wherever possible. This has led to predictions from some quarters of the demise of the Central Market system itself. 

Brisbane Markets Ltd and Brismark CEO Andrew Young is spokesperson for the Central Markets Association of Australia and a key speaker on the increasing importance of the Central Market system. 

He said that while in recent years numerous government agencies and the growing sector had run down the Central Market system's role, there was a failure to acknowledge its ongoing importance and all was not doom and gloom. 

"Predictions of Australia's Central Markets' demise have been around for more than 25 years," Mr Young said. "Yet, Central Market tenants are active participants in all sectors of the supply chain." 

"They are involved in marketing 65% of fresh produce and despite the predictions, their role is expanding." 

Mr Young said Australia's six Central Markets provided the industry with: 

• 400 wholesalers/marketers
• Total throughput of more than $5 billion
• Total throughput volume of more than 3.2 million tonnes
• Investment of more than $500 million by the Market Owners and over $350 million through its Market Tenants. 

"The real issue is not the Central Markets' relevance," he said.  "It's what to do with the extra 900,000 tonnes of product that has appeared on the domestic market annually. 

"Even with Australia's population increase from 18.3 million to 20.6 million people over the past decade, in real terms in excess of an extra 50,000 tonnes of product is available for sale," Mr Young said. 

"This extra product is having an obvious impact on the produce we are marketing and the return prices paid to growers when comparing the volumes of product being made available for sale today with 10 years ago." 

He said over the past 10 years:

• Production was up by 16% (about 750,000 tonnes)
• Exports were down by 25% (about 100,000 tonnes)
• Imports were up by 200% (about 70,000 tonnes)
• Consumption remained static. 

"That leaves a number of simple solutions that the whole industry needs to examine," Mr Young said. 

"We can grow less or plough in more. We could market less, export more and import less. 

"We could also encourage people to eat more fresh and processed product." 

Growing and marketing less 

Instead of producing less, Mr Young said growers might instead choose to market less. This included leaving second grade product in the paddock, instead of sending more to an already well-supplied market. 

He said growers needed to be honest: 

• Do support the use of grade standards
• Do apply the grade standards
• Do work with and listen to their wholesaler/s
• Do not pack seconds into a carton marked Class 1
• Do not interpret a wholesaler saying that the Market is oversupplied as a signal to send product to another wholesaler

Exporting more 

Mr Young said a new approach was needed to exporting. The approach over the past 10 years had obviously not worked. 

He said there must be an increased focus on making it easier for existing exporters to export by fixing some of the problems in relation to market access. 

While there was a continued role for Market-based exporters, it was hard to see any significant increases in export performance in the foreseeable future. 

Imports 

"Import volumes will continue to increase and issues such as food safety, country of origin labelling and dumping will become more relevant," Mr Young said. 

"Globalisation of the supply chains, and the negotiation of Free Trade Agreements by the Federal Government, will continue to promote support for low cost competitors and importation."

Australians eating more

The Central Markets have channelled millions of dollars into encouraging increased fruit and vegetable consumption over the past decade through a range of retailer, school and other programs. 

Mr Young said programs such as the government's ‘Go for 2&5' campaign highlighted that per capita consumption can be increased. 

"The current average adult consumption is only 1.6 serves of fruit and 2.2 serves of vegetables while the Queensland objective is to increase it by one serve per adult per day over five years," he said. 

"An increase in consumption volumes from the current average level of 3.8 serves per day to 4.8 serves per day would result in:

• 26% increase in average adult consumption
• Increased demand
• A billion-dollar injection into the fruit and vegetable industry (fresh and processed).

Central Markets future 

Mr Young said that Australia's six Central Markets had current and planned future development projects worth more than $500 million. 

He said the Central Markets future relied on:

• Consolidating its role as a marketing and distribution hub
• Adding value in catering for the needs of major customer groups
• Increasing recognition as a part of the industry
• Growth in industry alliances - vertically and horizontally
• Increased co-operation and collaboration within the industry to pursue opportunities and to address issues

There is an ongoing, significant role for Central Markets and Market tenants," Mr Young said. 

"There is every opportunity to see progress for the whole industry by encouraging Australians to eat more fruit and vegetables. We need to discipline the supply of appropriate quantity and quality of produce to match market conditions and we must look at building export capacity." 

He said the Central Markets were well positioned with the role as a marketing and distribution hub servicing all sectors of the industry.

For further information on these and other issues affecting the horticulture industry, please contact Brismark's Industry Liaison Officer or telephone 07 3915 4200.