A supply issue between the “big two” supermarkets and major food manufacturers has left many consumers without access to popular products this week.
A dispute over prices saw Mars Australia refuse to supply Woolworths and Coles with its popular pet food products because they wouldn’t accept price rises, 9 News reported.
Mars Petcare owns 55 pet food brands including three of the top five in the world, Whiskas, Pedigree and Royal Canin.
A spokesperson for Mars Petcare Australia said: “We’re working through supply issues with some of our products currently and hope to have them back on shelves soon. We apologise to consumers for the inconvenience.”
Similarly at Woolworths, Uncle Toby’s products were noticeably absent from shelves.
“We have a supply issue with Woolworths which we’re both working hard to resolve to make sure that Uncle Tobys products are available there soon as well. This issue is only related to our breakfast cereal products,” a spokesperson for Nestlé told Inside FMCG.
Customers vented their frustration online over the lack of Uncle Tobys and Mars Petcare products Whiskas and Pedigree on shelves at their local supermarkets this week.
Anyone else noticed empty dog food shelves at their local supermarket? Second shop in three days same story. #nofood4fido pic.twitter.com/ZKUCoZTQsQ
— Allan Roebuck (@AllanVK4) April 2, 2019
Can someone at @woolworths or @UncleTobys please tell me what is going on with the great porridge shortage in south east queensland?? Went to four diff shops. NOTHIN. Except that ancient grains one that no 6 year old will touch. pic.twitter.com/vdfxZZ5Wl9 — Nadine Chemali نادين (@femmocollective) April 4, 2019
While Coles appears to have resolved the issue for now, Woolworths said it is expecting to see some stock from Mars Petcare and Nestlé flowing back into stores in the coming days.
A spokesperson for Coles told Inside FMCG on Friday morning, “We are in full supply with both [Uncle Tobys and Mars Petcare products]”.
A Woolworths spokesperson said, “We’ve recently experienced some supply shortages on a small range of products. We’ve been working with suppliers to address these availability issues and expect to see stock returning to our shelves soon. We apologise to customers for the inconvenience.”
Rising costs
The pricing dispute follows years of increasing costs. Australian Food and Grocery Council (AFGC) CEO Tanya Barden told Inside FMCG that “as costs continue to mount, something will have to give.”
“Food and grocery manufacturers, big and small, are conscious of cost of living pressures on consumers, and have been absorbing rising manufacturing costs for some time, given retail food and grocery prices have been dropping for about seven years,” Barden said in a statement to Inside FMCG.
“The high pressure on Australia’s largest manufacturing sector is only expected to intensify with costs on everything from commodities, particularly caused by the drought, to labour to energy continuing to increase.”
Barden said that these tough economic times facing the industry could lead to companies seeking an increase in their wholesale price, shrinking pack sizes or rationalising product range offerings to continue to manufacture in Australia.
“In some situations this issue has escalated to a point where a product is not available at one of the major supermarkets due to a disagreement with the manufacturer over price. We’re very concerned about this as a reduced product range is not good news for consumers and it is not good news for Australia’s largest manufacturing sector, the food and grocery sector.”
Barden added that the pressure on food and grocery manufacturers is forcing many to consider job cuts or cutting back on product ranges.
“Companies have been cutting costs, automating, absorbing cost increases and innovating. But the cost increases are now impacting the viability of Australian operations, with 4,750 jobs lost in the sector in recent times and the potential for further job losses, business closures or moving operations offshore.”
