Mr Viral
Australia supermarket report: More grocery competition needed to break ‘oligopoly’ but barriers may be too highMore grocery competition is required within the Australian grocery sector in order to break the ‘oligopoly’ currently led by Woolworths and Coles, but the barriers to entry may be too high.
An inquiry was directed by the Australian Government in January 2024 to the Australian Competition and Consumer Commission (ACCC), and the final report was recently published.
One of the main findings of this report was the conclusion that the local supermarket industry is ‘highly concentrated’, with the ACCC putting Woolworths market share at 38% of supermarket grocery sales and Coles at 29% – large numbers compared to closest competitors ALDI at 9% and Metcash (which supplies to independent stores) at 7%.
“In economic terms, this is an oligopolistic market structure in which Coles and Woolworths have limited incentive to compete vigorously with each other on price,” the commission said via formal documentation on the report.
“Grocery prices in Australia have been increasing rapidly over the last five financial years – Most of those increases are attributable to increases in the cost of doing business across the economy, [however] ALDI, Coles and Woolworths have also increased their product and EBIT margins during this time.
Dairy dilemma: Fonterra’s slump in China leads to profit declineNew Zealand dairy co-operative Fonterra has seen strong growth in South East Asia but also a significant decline in China, resulting in a decrease in profits for the first quarter of its FY2025.
Fonterra recently announced its Q1FY2025 financial results, reporting a small 1.92% increase in revenue to NZ$5.2bn (US$2.99bn) but a close to 24% drop in profits after tax to NZ$263mn (US$151.2mn) from NZ$346mn (US$198.9mn) the previous year.
The firm attributed this to a variety of factors including lower sales volumes due to a ‘strong finish’ in FY2024, higher milk costs affecting margins, as well as digitalisation efforts.
“Profit after tax in this quarter is down on the prior year due to lower sales volumes that reflect our strong finish to FY2024 and therefore lower FY2025 opening inventory [to be sold in this quarter],” CEO Miles Hurrell told the floor during the firm’s most recent investors’ meeting.
“It was also affected by gross margins being impacted by the rate of increase in milk costs at the end of FY2024, relative to in-market price increases; as well as increased operating expenses driven by a planned NZ$31mn (US$17.8mn) increase in IT and digital transformation spend.”
Tech advancement, consumer recognition driving rapid growth of biotic functional drinks in APAC – SuntoryIngredient stability, more science and greater consumer understanding are fuelling the the rapid growth of probiotic, prebiotic and other biotic drinks in APAC, claims beverage giant Suntory.
Functional products have seen some of the most rapid growth within the food and beverage industry in recent years, and one of the most successful categories have been those enriched with biotics, whether probiotics, prebiotics, postbiotics or synbiotics.
The beverage category has seen some of the most advanced innovation in this regard, with science advances and new tech playing a major role.
“Within the functional beverages sector, I think particular attention has definitely been given to areas such as probiotics and postbiotics, and this shift is being driven by a few key factors,” Suntory Oceania Senior Manager of Scientific and Regulatory Affairs Dr Lesley Stevenson told FoodNavigator-Asia.
“The first is definitely the advancement in technology surrounding these ingredients, which has translated to these being able to be more efficiently added into non-alcoholic drinks whilst still able to remain stable within these drinks and deliver the benefits they are supposed to.”
FSANZ proposes new rules for caffeine in foods to address overconsumption riskFood Standards Australia New Zealand (FSANZ) is proposing new caffeine regulations for retail foods to mitigate overconsumption risks among vulnerable groups.
This involves potential amendments to the Australia New Zealand Food Standards Code (the Code) to protect vulnerable groups that include pregnant women, children and athletes.
As part of the review process, FSANZ is undertaking public consultation from 4 March to 15 April 2025, 11.59pm (AEST).
FSANZ is proposing two new prohibitions – food for retail sale must not be caffeine, and all food for retail sale must not contain caffeine as an ingredient or a component.
These prohibitions will not apply to the following, which are currently “expressly permitted by the Code” to be sold via retail – formulated caffeinated beverages, cola-type drinks and, if approved, formulated supplementary sports foods.
FSANZ is also proposing that formulated supplementary sports foods may contain caffeine up to 200mg in a one-day quantity, with consumption directions specified on the product label.
Back to booze? Kiwi mixer brand Good Cocktail pivots to alcohol to weather economic downturnKiwi mixer brand Good Cocktail, which had enjoyed a boom on the back of the low-2-no trend, is now pivoting its strategy to focus on the alcohol sector.Shifting focus to this market segment is practical as spending has dropped for non-alcoholic beverages, said Good Cocktail co-founder Rhona MacKenzie.
MacKenzie declined to reveal the percentage drop in sales, but said that it is “not good”, though she is staying optimistic that the firm can weather the storm.
Good Cocktail, founded in 2018, initially thrived in the growing non-alcoholic mixer market but is now adapting to stay afloat.
“We have to reframe ourselves to stay alive. When we first launched the brand everyone was talking about non-alcoholic gin, non-alcoholic spirits, non-alcoholic everything, so we fitted ourselves there.
“But now, we’re exploring the shift in focus to being a quality mixer for alcohols. To be clear, we’ll never add alcohol to our products – we’re a mixer brand, and that’s what we’ll always be,” said MacKenzie.
