topic Re: Supermarket Chains Instrumental In Rosella Collapse in Community Spirit

Supermarket Chains Instrumental In Rosella Collapse

icyfroth — Wed, 07 May 2014 01:28:12 GMT

The receiver of Australian food brand Rosella says supply arrangements with Coles, as well as Woolworths supermarkets, played a big role in the company's collapse two years ago.

The Gourmet Food group, makers of Rosella sauce and Waterwheel biscuits, fell into receivership in 2012 before parts of the business were sold off last year.

The collapse came less than a year after the competition watchdog alleges Coles began a campaign to boost its pre-tax earnings by as much as $30 million by demanding payments from 200 suppliers - including Waterwheel.

The campaign is now part of Federal Court proceedings by the Australian Competition and Consumer Commission against the supermarket chain over alleged unconscionable behaviour.

Jim Sarantinos, a partner at Ferrier Hodgson, said the demands of both supermarket chains through rebates contributed significantly to Gourmet's dire financial state.

He said any further rebate would have had a severe impact on the business.

''Coles and Woolworths had a target they wanted to reach in regards to private label products, which are obviously sold at a significant discount to branded products like Rosella,'' he said.

''The problem that Rosella had was that it didn't necessarily have the financial resources to make the changes that were required to counter that move.''

Waterwheel is one of the ''tier 3'' suppliers that Coles targeted for payments, according to the ACCC's statement of claim, lodged with the Federal Court on Monday.

A creditor's report from 2012 lists the heavy toll of the retailer wars as one of the reasons why Gourmet Food failed. It says sales from Rosella's branded products fell 16 per cent in 2012 ''due to retailer focus on private label products''.

It adds that sales to major food chains were ''substantially less that budgeted'' due to major retailers ''deleting various product lines in store and delays in launching of new products and focusing on private label products''.

There was no mention of the payments demanded by Coles as alleged by the ACCC.

Another tier 3 supplier - Unibic, the former manufacturer of Anzac biscuits - also collapsed in 2012.

Mr Sarantinos was not aware of a specific ''supply chain'' rebate but said most manufacturers received a discount from the supermarkets of around 15 per cent of sales, which incorporated advertising and promotional rebates.

He said this affected businesses like Rosella that were unable to easily restructure their cost base.

''The push from the supermarkets towards private labels and the negotiating power they are able to exert on suppliers certainly had an impact on Rosella's performance,'' he said.

''There were still issues in Rosella's business, and it may have been that receivership was inevitable, but [the push by the supermarkets] was certainly a big factor.''

The ACCC alleges Coles ran an ''orchestrated and organised'' campaign to boost its earnings by demanding payments from tier 3 suppliers as a rebate for the supermarket group improving its supply chain.

A directions hearing is expected on June 6. Wesfarmers declined to comment.

Re: Supermarket Chains Instrumental In Rosella Collapse

cherry*135 — Wed, 07 May 2014 01:51:43 GMT

Not good.. The power of the 2 supermarket giants. We as customers lose good quality Aust food products, replaced with lower quality, cheaper home brand products.

Re: Supermarket Chains Instrumental In Rosella Collapse

j*oono — Wed, 07 May 2014 01:52:30 GMT

Coles and Woolworths have a lot to answer for. I mainly shop at Coles and when I see a choice in what I want between Coles brand and an alternative, I nearly always buy the alternative.

I was the same buying Hi Lo Milk. I used to always buy the Brownes one but now Coles have very short supply of it and it's usually just about on it's use by date, where as their own brand is always well stocked. I was told that the Coles brand does actually come from Brownes but that is not the point.

If you are ever to ask why a product isn't stocked anymore then the answer is always that there wasn't a demand for it. Coles and Woolies have made sure of that.

Re: Supermarket Chains Instrumental In Rosella Collapse

fourandsixpants — Wed, 07 May 2014 01:54:18 GMT

thanks for posting this icy.

I have missed Rosella sauce.....one of my kids loved it. I don't like the sugar in any of the sauces myself.

Wow. Wondered where the colourful bird /parrot label went to and I miss him:(

Honestly?.....many, many brands go missing off the big supermakt chain shelves every week.

There's apattern too......where there was once 8 plus brands of an item to choose from this has dwindled down to about 2-3 THEN next to them would appear the supermkt labelled one (prob contained a carp import then buyers rejected and supermkt chain gang had to probably do a deal with one of these 8 brands that 'disappeared' off the shelves)....then you would see one of the 2 brand/company brand items suddenly bear price tags with MASSIVE price drops-either indicating that they have had a barney with the chain and are not coming back on Monday......or are going to war with the chain who has a price tag on their line which cripples our manufacturers.

It ain't fair and it is NOT cricket IMO.

Re: Supermarket Chains Instrumental In Rosella Collapse

cherry*135 — Wed, 07 May 2014 01:58:10 GMT

Sabrands - South Melbourne
Presser has been in the food business for decades. Sabrands, his private family company, was founded in 1977 and markets premium fast-moving consumer goods. Aside from Rosella, his other key companies include the Sunraysia fruit juice brand, Devondale juice brand and O-Cedar cleaning products.

Presser says he wants to make Rosella a top brand again. Apart from sourcing ingredients for Rosella products from local farmers, and using local manufacturing plants, he’s also working to get the major supermarkets on board.

Rosella sauces, soups, chutneys and relishes are returning to supermarkets across Australia, as major retailers including Woolworths, Coles and IGA supermarkets now stock the product.

Re: Supermarket Chains Instrumental In Rosella Collapse

fourandsixpants — Wed, 07 May 2014 01:58:10 GMT

yes Joono. I used to always buy Harvey Fresh milk in 3L containers then Woolies said they were not going to carry it anymore......I REFUSED to pay their asking price for the 2L-IF I COULD GET ANY!!! and I know these chains are not paying farnmers enough AND the chain milk is absolute rubbish as are most of the other brands......soooooooooooo I changed to Devondale long life milk which was GGGggggreat - for a while. but for nearly a whole week I have been unable to get any.

Who is squeezing who?.....

Re: Supermarket Chains Instrumental In Rosella Collapse

cherry*135 — Wed, 07 May 2014 02:02:06 GMT

Unfortunately the supermarkets here are following in the footsteps of overseas ones. TESCOs in the UK for one. They screwed the farmers down to rock bottom prices for their produce to sell under their own brand labelled goods. I think all the stock in their stores now is TESCO brands only.

The way it is heading here?

Re: Supermarket Chains Instrumental In Rosella Collapse

pct001wine — Wed, 07 May 2014 02:14:54 GMT

It's not only in the FMCG area that Wesfarmers apply pressure via unreasonable rebate demands, exclusivity, bullying tactics... they also own Bunnings & Blackwoods (amongst others) and maintaining a fair and equitable trading relationship with them is a very difficult process - particularly when you are an Australian manufacturer competing against cheap imports (from personal experience)

Re: Supermarket Chains Instrumental In Rosella Collapse

green.fields — Wed, 07 May 2014 02:17:01 GMT

I can still get Harvey Fresh at Woolies and I can get it at any local IGA and small fruit and veg seller. As for your other comment chain milk being rubbish, that might be rubbish because I am led to believe it is the same as the branded milk, just cheap enough to sucker people into buying it and trying to wipe out the brand names.

Re: Supermarket Chains Instrumental In Rosella Collapse

katymatey* — Wed, 07 May 2014 02:26:27 GMT

I haven't shopped in Coles or Woolworths for a number of years. They already have too much share of the grocery market without me helping. Fruit and veg's I buy from a grower's outlet. Cheap and good quality. I shop in Aldi for groceries, but reading labels carefully and buying Australian wherever possible. Meat and chicken from Tasman Meats which is Australian owned. I save money even though I have to drive a couple of kilometres more than shopping in one place.

Re: Supermarket Chains Instrumental In Rosella Collapse

fourandsixpants — Wed, 07 May 2014 02:27:59 GMT

Well....not sure about that because I know someone who worked at a local dairy.....and the inside 'talk' and 'dairy farmer talk' spoke a different story I am afraid. Some I have actually bought and tasted myself. Just so I can honestly say it is rubbish - well it did NOT taste like milk is supposed to taste.....er, like it came from an animal....er, like a cow and tastes 'creamy' like milk should taste.

Re: Supermarket Chains Instrumental In Rosella Collapse

i-need-a-martini — Wed, 07 May 2014 03:10:04 GMT

The collapse has nothing to do with the supermarkets.

It all has to do with Australian consumers searching for cheaper (usually imported) product.

If we all bought Australian product, then companies like Rosella would still be around.

Re: Supermarket Chains Instrumental In Rosella Collapse

freakiness — Wed, 07 May 2014 04:04:24 GMT

@i-need-a-martini wrote:
The collapse has nothing to do with the supermarkets.

It all has to do with Australian consumers searching for cheaper (usually imported) product.

If we all bought Australian product, then companies like Rosella would still be around.

Supermarkets contribute when they delete items from their shelves. If they no longer supply Rosella products consumers can't buy them from supermarkets and most will just buy what is available there and then.

Re: Supermarket Chains Instrumental In Rosella Collapse

i-need-a-martini — Wed, 07 May 2014 04:14:38 GMT

They only delete if they don't have the sales.

Because we only buy Australian made in our household, we always bought Rosella Tomato Sauce. Even though it was more expensive and the packaging was less convenient. However, most Australians ditched it in favour of cheaper sauces in plastic squeeze bottles. Hence the sales dwindled.

If the sales were high the supermarlets would have continued to stock it.

But no retailer can be expected to carry dead stock.

Re: Supermarket Chains Instrumental In Rosella Collapse

freakiness — Wed, 07 May 2014 04:23:44 GMT

@i-need-a-martini wrote:
They only delete if they don't have the sales.

Because we only buy Australian made in our household, we always bought Rosella Tomato Sauce. Even though it was more expensive and the packaging was less convenient. However, most Australians ditched it in favour of cheaper sauces in plastic squeeze bottles. Hence the sales dwindled.

If the sales were high the supermarlets would have continued to stock it.

But no retailer can be expected to carry dead stock.

They also delete when suppliers don't play along with their game.

Look at the McCain example. They refused to pack the generic brands that were competing with their products (they supplied home brand but not the "quality" generics) and the supermarkets immediately cut a lot of their product from their stores.

Re: Supermarket Chains Instrumental In Rosella Collapse

cherry*135 — Wed, 07 May 2014 06:05:19 GMT

As the original owner of Rosella said, the supermarket was a factor in their demise.

'There were still issues in Rosella's business, and it may have been that receivership was inevitable, but [the push by the supermarkets] was certainly a big factor.'

Supermarkets charge companies for premium spots on the shelves. Makes it hard for smaller businesses without the funds, they end up on the lower shelves, where customers are less likely to notice them.

The supermarkets must make more profit on their homebrand items, than they do on other brands, otherwise they wouldn't bother pushing them (by putting more on the shelf than other brands for same item) and increasing the number of different products available in homebrand. They call the shots on price.

Re: Supermarket Chains Instrumental In Rosella Collapse

sandypas — Wed, 07 May 2014 06:38:16 GMT

I usually shop at Safeway (Woolworths) because it is easy to reach for us - Coles is in the middle of a shopping centre but I am getting annoyed that Safeway in not stocking a lot of the normal brands I buy and have replaced them with their own Select brand and if there are other brands, their brand is the one in front of your face. I am going to check out Coles for my next shop and see how they compare.

Re: Supermarket Chains Instrumental In Rosella Collapse

j*oono — Fri, 09 May 2014 09:33:01 GMT

Coles has gone one step further to squeezing out their suppliers brands. They are offering double flybuys points when you buy the Coles brand until 10th June.

Re: Supermarket Chains Instrumental In Rosella Collapse

cherry*135 — Fri, 09 May 2014 11:08:43 GMT

That's an unfair advantage.

Coles had Darrell Lea choc peanuts on the shelves. Fast forward a few months, they disappear and are replaced by same item under the Coles brand...cheaper price and probably lower quality.

That is what annoys me.. When you like & buy a branded product and it disappears ..to be replaced by homebrand only.