McCain cutbacks linked to Coles private-label deal with Simplot

  • June 13, 2012
  • Amy Brown

Vegetable processor McCain Australia is slashing the price it pays to its contract growers, and grower, let by the Victorian Farmer’s Federation are accusing McCain of bullying tactics.

McCain’s aggressive behaviour appears to be a consequence of a pricing competition triggered by a deal between Coles and McCain’s competitor Simplot. Coles recently pledged to source its entire private-label frozen vegetable products from local produce that would be packed by Simplot Australia factories.

Excluding supermarket private labels, the Australian frozen food processing market is shared predominantly between Simplot and McCain. The Simplot-Coles private-label deal is forcing McCain to cut costs for its contract-growers. In addition, the high Australian dollar has impacted on McCain exports.
From late May 2012, McCain has reportedly told at least seven of the 33 potato growers supplying its largest frozen chip factory, in Ballarat, that their contracts will not be renewed. A number of farmers in Victoria and Tasmania have had their annual contracts cut by up to 60%.

McCain, which sets the price for local businesses in Victoria buying chip potatoes, has also been offering lower prices to growers. Prices have reportedly dropped from $305 a tonne to $270. As Australian Food News reported last month, a motion has been tabled in Victorian Parliament to urge McCain’s to keep collective bargaining in place for potato growers.


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One Response to “McCain cutbacks linked to Coles private-label deal with Simplot”

  1. nicole on June 14th, 2012 2:15 pm

    Lets just boycott the lot of them, cut out the middle man and buy our potatoes straight from the farmer and put money to where its supposed to be. The grower.

    These companies are ruining our farming industry and soon they will be importing potatoes from overseas to get the lowest price at the gate so they can keep more money in their fat pockets.

    There has to be some repercussions for Coles, and the only way they will listen is if their customers stand up and say enough is enough, we care and support our industries and the familiies that run them.
    Unfortunetely most people are deluded by Coles deceptive family friendly advertising campaign, and do not know the real facts