Andrew Hall Director Corporate and Public Affairs
Agent of the customer • • Consumers view us as their agent – the apple they buy from us is a Woolworths apple – our responsibility • Consumers expect us to do the right thing – to safeguard their health and safety, uphold quality and increasingly, buy ethically • We need to work with suppliers who understand consumer pressures and share our values • 2 Retailers are not the end of the supply chain – the consumer is Our food supply chain is built on trust – our biggest asset
Complex and competing issues State of origin Quality Traffic light labelling Deforestation Food miles Palm Oil GM Diversity Waste Obesity Sodium Marine Stewardship Convenience Low GI Animal Welfare Country of origin Organic Local sourcing Recycling Pesticides 3 Carbon labelling Fair trade Value Corruption Water Labour rights
UK consumer attitudes to green shopping Source: M&S survey of 25, 000 consumers, 2007 4
Consumer Segments 5 Source: 2009 GMA/Deloitte Green Shopper Study
Co-Operative Retail Group in UK Source: Co-Operative Group research published in The Retail Bulletin, 7 February 2008 6
Consumer trends - Fairtrade • • AU$36 million in 2009, compared to AU$23 million in 2008. • Fairtrade Certified coffee the most purchased product -70% of total retail sales. • 7 2009 sales of Fairtrade Certified products up 50% in Australia. Fairtrade tea sales grew by 270% in 2008 and a further 100% in 2009 to AU$6 million in retail sales Source – Fairtrade Australia.
Consumer Trend Indicators - 2009 Product Percentage Increase in sales* Percentage of total category sales in 2009 Free range chicken 33. 6% 6. 4% Free range eggs 31. 7% 32. 0% *Percentage increases based on increased sales from 2008 – Woolworths supermarkets. 8 Source – Woolworths Supermarkets sales data 2008 and 2009.
Case study - animal welfare • Animal activist raid on piggery in Tasmania • Appalling welfare conditions in sow stalls • Industry’s own auditing processes failed • Woolworths worked with not against the farmer to rectify • 60 Minutes story • More than 3, 000 emails and letters received to date • Breakdown of trust right along the supply chain -consumer to retailer -retailer to supplier -industry to industry body 9
Ethical sourcing • Assessment of labour practices – freedom of association, fair pay and conditions • Focused on international vendors in higher risk countries • Part of terms of trade for everyone • Recognise inherent bureaucracy for suppliers • BUT – need to reduce burden without compromising consumer commitment 10
Global approach to harmonisation • • Top 30 leading retailers in the world • Vision to harmonise existing efforts in order to deliver a shared, global and sustainable approach for the global supply chain • Commitment to equivalency and reduction in complexity • Huge task – beyond competitive difference • Open source for ethical audits • 11 Global Social Compliance Program (GSCP) - part of the Consumer Goods Forum Increase auditing competency
Local ethical sourcing – policy • • Australia has a strong regulatory framework - but problems can and do occur • We need to have a system of preparedness • Positive health test for any business • 12 One principle fits all – international and local 70 trial audits completed with meat and poultry vendors
Local ethical sourcing – next steps • • Move to self-assessment rather than formal audit for domestic vendors • Audits to be undertaken on a discretionary basis • Ethical policy conditional in terms of trade • Support equivalence locally but commitment is to the consumer • 13 Opportunity to evolve a more risk appropriate approach We will continue to refine the agenda in consultation with vendors and the PMA
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