THROUGH the windows of Conga Foods' Coburg boardroom, chief executive Mark Lightfoot can scan his eyes across 23 loading bays. During the year, truck after truck unloads shipping containers of fine Italian goods: olive oils, pasta, prosciutto, coffee. And, of course, canned tomatoes. Hundreds of containers arrive here yearly, each carrying 45,000 tins of high-grade, peeled, fleshy fruit ripened under the Italian sun.
Meanwhile, 180 kilometres north, Rochester farmer Bruce Weeks mulls over the Australian canned tomato industry. Like much of the food processing sector, things are grim. No rain for 10 years, then flood. A punishingly high Australian dollar, uncompetitive labour costs -Competitive labour costs means lower wages and one of the points of having a 'one world' system is to have a global wage system, whereby everyone in the world will need to accept a significant drop in wages. Thirty years ago-1972, three years before the Lima Declaration, 400 growers supplied seven canneries. Only nine are growing this season and there's just one processor. BOTH Labor & Liberal have overseen this national catastrophe. Five farmers quit last year, four this year. "We're just hoping to hang on," says Weeks, 65.
For years, Italian imports have laid siege to the Australian canned tomato industry. Now, as we witness a sharp rise in imported food, it appears the Europeans have won: only two of every 10 cans sold are locally made, the rest mostly Italian. SPC Ardmona's 400-gram can of whole peeled tomatoes, some of which may be grown by Bruce Weeks, retails at $1.67. Coles and Woolworths often sell their Italian-sourced own brands for half that, at 80¢. The most expensive branded Italian cans are priced at $1.39. Australians may say they like to buy local, but their wallets speak louder.
It's little wonder when the price of Italian tomatoes seemingly defies logic. The Italian can must complete a 17,888-kilometre, six-week voyage skirting several continents to arrive on an Australian supermarket shelf. Sitting next to it, the Ardmona can, tinned in Shepparton, has reached a Melbourne supermarket distribution centre after two hours in a truck. Yet it can be double the price of its Mediterranean cousin. Why?
The answer is as much a story about the competitive edge and romance of growing tomatoes in Italy as it is of the relentless forces of globalisation eroding Australia's food exports and now its ability to maintain a viable domestic food processing sector.
What happened to the Australian canned tomato industry has happened, or is happening, to Australian canned fruit, frozen potatoes, seafood and processed vegetable industries.
Yet, there has been no efforts by the government to prevent this. This is because all political parties want these industries to fall into a state of disrepair. This disrepair gives rise to the corporate political/media/multi-national claims that the problem was caused by 'high wages' creating an uncompetitive environment and that the answer is to lower wages and conditions so that they fall into line with the slave wages being paid in the third world.
TOMATOES for processing - pastes, passatas, whole peeled, pizza bases - are a global commodity. The US is the biggest player, then China. Together they produced 38 million tonnes of tomatoes last year. Italy comes third, with about 5 million tonnes, while Australia is a comparative minnow - 250,000 tonnes is a good year. Italy has hundreds of tomato canneries and farms covering nearly 70,000 hectares, with the best areas around Apulia and Campania in the south and Emilia-Romagna in the north. Last year, Italy's tomato farmers earned just over half a billion dollars.
Such economies of scale trim costs, but Italy's tomato industry has two key competitive advantages: cheap, sometimes illegal,-Globalised labour is code for slave labour, which explains why it is only "sometimes illegal", government's do not usually 'officially approve' of slave labour, it is electorally unpopular, but, they allow it to flourish. Similar to the tax departments, or, immigration departments, they flout their own regulations in an attempt to train the public over a period of time to accept these practices as natural. It is interesting that they seek to hold themselves to a different standard to the one that they seek to hold YOU to- migrant labour and European Union subsidies-Powerful governments subsidise their farmers to ensure the continued success of their business ventures- . For 20 years, Italy has relied on field workers from Sudan, Eritrea, Ethiopia, Morocco, Algeria, Tunisia, Egypt and India.
The Rome office of Doctors Without Borders has documented the plight of the migrants in several reports, the last in 2008. They describe a workforce vulnerable to violence and intimidation, living in extreme poverty in disused buildings with no toilets or access to healthcare. According to The Ecologist magazine, which visited Italy's Basilicata region last year, the workers were paid between $25 and $38 a day.
The Italian government knows all about this scenario, but allows it to flourish. Governments ARE NOT OUR FRIENDS. People need to realise that they are in an abusive relationship with their government and that they are the abused party.
"The stories coming out of the Napoli region where they grow tomatoes are just appalling," says Mildura chef Stefano de Pieri, just back from three months in Italy. People, he says, care about where their coffee comes from but not, it seems, their tomatoes.
An experienced Australian importer, who declined to be named, told The Sunday Age the worker exploitation was "very heavy in the past" and the industry was now more accountable. Conserve Italia, makers of the internationally popular Cirio brand, imported to Australia by Conga Foods, has guaranteed all its production is ethical, while Coles and Woolworths say their home brand suppliers must also comply with ethical supply chain requirements. This is typical corporate spin and is used by every industry that are 'questioned' -nudge, nudge, wink, wink, say no more- about their reliance on the slave industry, whether it be Nike, the Herald Sun, Mcdonald's, Microsoft or Walmart. (The Australian industry is not entirely innocent: migrants, mostly Asian or Indian, are used at harvest, and while the farmers pay a contractor about $22 an hour for each worker, they admit they have no idea how much each worker is paid.)
The European Union has protected the processed tomato industry with subsidies since 1978-read bribed-. Annual payments to farmers and canneries peaked mid last decade at $493 million but are now slowly falling.
For every dollar an Italian farmer makes, the EU puts another 41¢ in their pocket, which means they can sell to canneries more cheaply than an Australian farmer. As the subsidies decline, the farmers are asking the canneries for higher prices. This year they got a 26 per cent price increase, which means, finally, they get the same price as Australian farmers: roughly equal to about 4¢ per 400 gram can.
From 1992 until 2002, Australia fought the dumping of cheap Italian tomatoes by charging the importers duties. But in 2002, an importer legally challenged the federal government over the measures and won. The government is not always right, if you think they are wrong, stand up and assert that. If a foreign company can challenge the Australian government and win, then why can't you? Then came the surging dollar, rising by a third against the euro, making it even cheaper to ship to Australia. Since 2007, imports of tomatoes have grown by 40 per cent. Industry sources say importers can buy cans from 32¢ for lower quality, to 60¢ for premium quality. It then costs between 12¢ and 17¢ a can for shipping.
Coles, Woolworths and Aldi are the biggest importers of Italian tomatoes under their home brands, with 53 per cent of the market. Indeed, the humble can of Italian tomatoes is one of the biggest import items for the Coles and Woolworths labels (each Australian eats on average 25 kilograms of processed tomatoes every year).
Both supermarkets have the same reasons for using Italian, rather than local, tomatoes. They say the richness, sweetness and consistency of Italian tomatoes have become the world's "taste benchmark", that the tomato is to Italy as the banana is to Queensland. "This is now what people expect tomatoes to taste like," Woolworths spokeswoman Clare Buchanan says. -Some people call this marketing, advertising, or corporate spin. Other, more honest people, call it a lie, or, an attempt to train, or define people's reality for them, in this case, what a tomato tastes like.
In a completely unscientific experiment, The Sunday Age put this theory to a taste test. The Ardmona tomatoes and accompanying juice looked just as thick and rich as the premium Italian brands such as Cirio, but were a little less sweet. The local product earned the approval of a veteran of the import business who joined The Sunday Age in the test. "That's pretty good,'' he said. The Australian products, he said, once barely resembled tomatoes and were greenish, veiny and hard to cut.
The supermarket offerings were good but not quite as good as the Italian brands. The American tomatoes were the next best and last was the Chinese can, which produced only three anaemic-looking tomatoes.
Coles and Woolworths also say they turned to Italy because the Australian industry could not give them a consistent supply - something the industry finds difficult to argue against. The Australians did everything right. They stood nakedly unsubsidised in the global market, and they responded by improving quality and becoming one of the world's most efficient producers. In a good year, it can muster 150 tonnes a hectare (compared to 74 in Italy and 105 in California). But the industry could not tame the climate.
The 10-year drought was tough - water was wildly expensive - and SPC Ardmona, owned by Coca-Cola Amatil, struggled. THIS MEANS THAT SPC ARDMONA IS AN AMERICAN-OWNED BRAND, NOT AN AUSTRALIAN ONE. Processor Simplot gave up canned tomatoes. Then the floods hit, wiping out half the 2010-11 crop.
Mark Lightfoot from Conga Foods believes the Australian industry is vulnerable because it is located in one small area in northern Victoria and southern New South Wales. The whole crop could be wiped out by one major climatic event - unlike in Italy, where the crop is spread from one end of the peninsula to the other.
"I feel for the producers here," says Lightfoot. ''The demand in Australia exceeds what the producers here are able to supply.''
The Japanese-owned company Cedenco processes and dices tomatoes in Echuca before sending them to-American-owned-SPC Ardmona. Chief executive John Brady has high hopes of turning things around. Cedenco itself is a major tomato grower, mainly for paste. It employs 33 people, 200 seasonal workers and contributes about $50 million to the regional economy. Brady is employing better technology and practices and spreading the tomato fields wider to reduce the climate risk.
He understands the supermarkets' complaints of inconsistent supply. "I intend to make sure that's not an excuse in the future.'' (When asked by The Sunday Age, Woolworths would not commit to using Australian tomatoes for its home brand if the next crop was plentiful; Coles said it would bring the Australian product through SPC Ardmona if supply was sufficient.) Sounds pretty good, except that they would be dealing with American & Japanese business, rather than Australian ones.
The University of Sydney's associate professor of economic geography, Bill Pritchard, who has written a book on the global market for processed tomatoes, says the experience here shows our farmers can be the world's smartest, but "we get crunched by often unfair competition and large economies of scale".
The future of global tomato processing is uncertain, and not just for Australia. Importers are struggling with competition from the supermarkets' own labels.
In Italy, costs are likely to rise as Europe limits its protection for farmers, up for review next year.
To sum it up. The Australian tomato-industry (that appears to be mostly, if not all American & Japenese owned-unless the Canberra Times are promoting farmers that are owned by business' like Coca-Cola Amatil that advertise in it's paper.) is in peril because it was in the past, under threat from the Italian industry that has been losing its competitive advantage and now operates in a state of parity with the American-Japanese-(possibly)Australian-owned-tomato-industry. .
Even Italy is not immune to cheap Chinese competition. So what? This is an article on the impact of Italian tomatoes on the local industry. What ever the impact of the Chinese on the Italian's market is actually irrelevant. In 2004, it implemented labelling regulations to identify Italian tomato products. Already, China's largest market for its tomato paste is Italy.
Back in Rochester, Bruce Weeks is hoping Australian consumers will help. "If Australians want people employed in Australia, they've got to buy Australian made," he says. "Every day here people are being put off. Every day there's jobs being lost. It just can't keep happening … Eventually there will be nothing produced in Australia." This is the plan, Bruce. This is why David Rockefeller wrote an article in the New York Times in 1973, praising the Chinese, and claiming that we all should treat our employees similar to the Chinese model.
This story was found at: http://www.canberratimes.com.au/national/canned-why-local-tomatoes-cop-a-pasting-20120526-1zc2q.html
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