ACCORDING to Coles managing director, Ian McLeod, Coles' "Down Down" driven food deflation has not only provided relief for Australian consumers from the rising cost of living but has also helped farmers and food manufacturers grow sales.
In a statement released last week, Coles announced it had generated more than $4 billion of additional sales for farmers and food manufacturers, as a result of its performance turnaround over the last four years.
Mr McLeod said Coles had an Australian-first sourcing policy and worked closely with farmers and farm businesses to invest in and help them grow their businesses to ensure sustainable production, innovation and improve quality for customers.
"Coles has reinvested savings from internal efficiency programs, such as reduced store waste, into lower prices for customers," he said.
"The bottom line has been higher turnover for Coles that in-turn flows through to better sales for farmers and food manufacturers."
Pastoralists and Graziers Association (PGA) president Rob Gillam welcomed Mr McLeod's comments and brushed off the idea Coles was sweeping the negative effects on farming under the rug.
"I think the announcement is a sign of the rationalisation that is taking place in farming and agriculture in Australia today," he said.
"I'm very much aware of the bad press associated with the 'Down Down' campaign Coles ran and the dollar a litre milk campaign and its effect on the WA dairy industry.
"But the WA dairy industry has been going through a process of rationalisation since the industry was deregulated.
"You can just as easily talk to some within that industry who will tell you, they have never made more money out of milk because they have gone down a different path."
Mr Gillam said producers have to remember 90pc of consumers wanted to buy products as cheap as they could.
"Farmers have to be able to produce in a different manner to how they had in the past," he said.
"The shortening of the supply chain and fostering of relationships between farmers and Coles is making things more profitable for those farmers who are prepared to change.
"Farmers who think they can go on farming the same as their father did, were going to find things hard and will be forced to change the way they do things."
WAFarmers president Dale Park said it was good to see Coles shortening the processing pipeline but questioned who was actually getting the benefits from that.
He said Coles was helping farmers by trying to ensure it sourced what it could locally and by getting customers to do the same.
"Some people supplying Coles say it's nice to not have to depend on the export market, but they seem to forget the export market is what underpins most of Australia's production and the prices farmers receive," he said.
"In some ways we would like to see some more direct transaction between Coles and farmers.
"We welcome any shortening of the processing pipeline to hopefully help create a little more transparency."
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