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Aussie parochialism hits Kiwi suppliers

13:30 AEST Mon Nov 19 2012
AAP
Australians want to buy locally-made produce which could freeze out kiwi food exporters (ThinkStock)
Australians want to buy locally-made produce which could freeze out kiwi food exporters (ThinkStock)

New Zealand food exporters will struggle to crack one of Australia's biggest supermarket chains unless they do something different as parochial Australian consumers demand locally-made items lining their grocery aisles.

Supermarket chain Coles, one of the major two players across the Tasman, won't stock Kiwi products if they're indistinguishable from Australian-sourced suppliers, the retailer's general manager of meat, dairy and deli, Allister Watson, told New Zealand manufacturers and suppliers last week.

"The opportunity for New Zealand companies is to come to Australia and talk to Coles about what do they do differently," Mr Watson said.

If New Zealand firms come with undifferentiated products, "you may as well stay at home."

Mr Watson, an ex-pat New Zealander, was speaking at the Food and Grocery Council annual conference in Melbourne on Friday, in a presentation titled Growing your business with Coles.

The FGC represents the interests of New Zealand grocery retailers, suppliers and firms linked with the supply chain.

Australian consumers want to back locally-made products, which feeds into their buying decisions and sets a higher threshold for New Zealand products, Mr Watson said.

Where New Zealand suppliers can compete with their Australian rivals is in taking better and more inventive products across the Ditch, he said.

"There's a lack of innovation in a lot of categories in Australia - there's much more innovation in New Zealand which I believe could come over.

"If you have something new and unique, something compelling, then certainly, we're all ears."

That means New Zealand companies will have to latch on to their competitive advantages, which include being able to manufacture products 25 percent cheaper than in Australia due to the exchange rate and cheaper labour costs, he said.