Australian Industry Calling For Boycott

Published online: Jun 20, 2005
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Australian farmers are calling fo a boycott of fast-food restaurant chain McDonald's after a cost-cutting prgram saw it end contracts with several long-term Australian suppliers.

In a statement to the Sunday Age newspaper in Melbourne about its cost-cutting program reportedly code named "Project Platypus", McDonald's said it had impoted only about 7 percent of its total food expenditure for the past decade and was unlikely to increase that in the future.

But the percentage was likely to rise rapidly after McDonald's cut its 80,000 tonne (88,185 tons) potato contract with Simplot Australia - which in turn bought them from about 400 growers in Tasmania - by about 43,000 tonnes (47,399 tons).

McDonald's moved the contract to food processor McCain, which was expected to import the potatoes from New Zealand.

Potatoes grown in Tasmania cost A$40 to A$50 (US$31 to US$39) than they do in New Zealand, partly because of New Zealand's geography. Farming land there is generally flat, closer to the factories and gets a higher rainfall that cuts down on the costs of irrigation. New Zealands's labor costs are also 35 percent lower than in Australia.

The Simplot contract had been worth about A$20 million (about US$16 million) at the farm gate to Tasmanian growers.

The rest of the contract is to be reviewed by the end of the month and Simplot Australia managing director Terry O'Brien said there was no guarantee his company would retain it.

"If we lose it I'd be pretty sure that Tasmania will lose it and then you'll really hear them hollering," he said.

O'Brien said New Zealand was the threat.

"They have lower farm-gate prices, they have lower labor rates and they have a foreign exchange advantage," he said.

The Tasmanian Farmers and Graziers Association plan a protest campaign against McDonald's. It was organizing a march outside a McDonald's outlet in Tasmania and then would move the protest to the Australian mainland.

"We're talking about a $50 million loss," association spokesman Richard Bovill said. "It will put hundreds of people out of jobs and destroy many young farmers' livelihoods. We have to get into the minds of their customers and we don't intend to back off until they buy Australian products across the board."

The move against the potato growers led Australia's only grower of pickled cucumbers to announce on a television program that he would stop supplying McDonald's.

"I have no confidence I have a future with McDonald's any more because of the way they are going on at the moment," said Tony Parle of Griffith in New South Wales.