This week in FMCG
Supermarket and petrol giant broke million dollar deal; Dairy giants agreed to help farmers; Grocery sector has seen a surge in private label products; Salmonella outbreak linked with alfalfa sprouts and online retail giant launched its service in Australia.
Woolworths, BP $1.8 billion petrol deal torn up
Woolworths, BP has decided to cancel a $1.8 billion petrol deal. Consumer watchdog ACCC knocked back their proposal last December. The supermarket giant is eyeing other options more amenable to the consumer watchdog. Woolies chief Brad Banducci said it had a “myriad of options” and that a “range of parties” had expressed interest in the business. We’ll see how this one will turn out.
Bellamy’s, Fonterra to help Aussie farmers go organic
Bellamy’s has signed a deal with global dairy giant Fonterra to help Tasmanian farmers switch to organic practices. The infant formula maker plans to invest $5.5 million, aiming to cover farmers’ costs of converting. This latest move is also followed by a “a multi-year agreement” with an affiliate of Victoria-based Australian Consolidated Milk to secure access to that supplier’s organic milk. Bellamy’s chief executive Andrew Cohen said the agreements aim to “improve outcomes for Australian dairy farmers, support the Tasmanian dairy industry, and at the same time take greater control of our supply chain and cost structure.”
More private label products emerged in supermarkets
As more private label products emerge in Australian supermarkets, researchers say the increase could significantly impact Australian suppliers as their branded products are delisted and supermarkets seek out cheaper manufacturers overseas. Australian supermarkets previously looked to local manufacturers to produce their private label ranges. However, Aldi, Kaufland, Costco and Lidl have found success by leveraging their global sourcing strategies, providing both quality and economies of scale, and so lower prices.
SA alfalfa sprouts linked to salmonella outbreak
This week South Australians were warned not to consume alfalfa sprout products from Adelaide business SA Sprouts after 21 Australians fell ill with Salmonella havana. At the time of publishing, seven people had been hospitalised. This increased to nine throughout the week; however, since then all have been discharged.
Amazon launches Prime in Australia
Online retail giant Amazon has launched Amazon Prime in Australia. It offered a free two-day delivery for an annual fee of $59. Amazon Australia’s country manager Rocco Braeuniger said they finally introduced Prime six months after launching a local retail offering in the country. Braeuniger said the latest retail service addition will allow their “customers [to] enjoy the most convenient way to shop and take advantage of new and expanding benefits from Amazon.” Looks like more Aussies will shop online.
That’s it for this week. We’ll be back again on Monday morning to bring you the latest FMCG headlines in Australia. Have a good weekend everyone!