Gippsland Jersey's Struggle for Survival in the Face of Unfair Demands and Market Imbalance

Gippsland Jersey's Struggle for Survival in the Face of Unfair Demands and Market Imbalance

Gippsland Jersey's Struggle with Coles

Gippsland Jersey, a small milk brand established in 2016, faced a challenging battle with supermarket giant Coles. Despite securing shelf space in Coles stores, the brand struggled to meet the high sales targets and profit margins demanded by the supermarket.

Coles requested a margin of over 30%, which Gippsland Jersey deemed unsustainable. As a result, Coles decided to remove Gippsland Jersey's products from most Victorian stores by the end of the month.

This incident highlights the power imbalance between large supermarkets and smaller suppliers. The current Food and Grocery Code, which is voluntary, has been criticized for its ineffectiveness in protecting suppliers.

Former Labor frontbencher Craig Emerson's review of the code recommends significant changes, including mandatory participation for large supermarkets and increased penalties for non-compliance.

While the government has agreed to implement these changes, some argue that further measures are needed to address the issue of market dominance by large supermarkets. These measures include divestiture laws to increase competition and legislation against price gouging.

The review also failed to address the issue of aesthetic standards imposed by supermarkets, which often lead to the rejection of produce that doesn't meet arbitrary cosmetic criteria. This contributes to food waste and reduces farmer income.

Despite the challenges, Gippsland Jersey remains hopeful that the changes to the Food and Grocery Code will create a fairer playing field for small suppliers. They also call on consumers to support Australian-owned and made products.