ECONOMICS : When Food Miles Fail

New Zealand’s economy is shaped by the rest of the world, we are reminded in the food and beverage sector’s “engagement strategy 2006-07”. Improving our economic performance “is integrally linked to the quality of our global connectedness”
More significantly, the strategy paper says the global food and beverage industry is at crossroads. Changing consumer demands and industry configurations are necessitating coordinated response from New Zealand’s food and beverage sector to match its international competitors and secure its contribution to the nation’s future prosperity.
We are in big trouble if the New Zealand industry falters. It is the country’s largest manufacturing sector, in output terms, and contributes half of all New Zealand’s merchandise exports by value.
The strategy paper identifies four “mega- trends” around the world; one of them is “social issues”, or the environmental and fair trade issues affecting consumer attitudes.
Trade Negotiations Minister Phil Goff, addressing Cairns Group Farm Leaders on 19 September, highlighted just one of those issues: the concept of “food miles”. As Goff put it, “European primary producers and some NGOs would have consumers believe that distance from the market is key indicator of product’s impact on the environment through carbon dioxide emissions. Products from countries as distant from their markets as New Zealand are branded as environmentally undesirable.”
Lincoln University scientists have debunked the notion that the further food must travel to market, the worse its environmental impact. Their study shows that when consideration is given to New Zealand farming methods and the total amount of energy used, especially in the production phase, New Zealand producers are more energy-efficient and create fewer emissions, even after the energy consumed by transport is taken into account. study by the UK Department for Environment, Food and Rural Affairs similarly concluded that single indicator based on total miles or kilometres is an inadequate indicator of environmental sustainability.
Food miles may well be another thinly disguised protectionist mechanism, regardless of the science. But as Goff advised the Cairns Group: “We do need to think about how we can best respond to demands for better quality food and niche consumer interests. We also need to be asking ourselves … what we can do to develop food production systems with lighter footprint on the environment.”
Like it or not, the customer is always right and British and American supermarkets have become decidedly picky about their food. Supermarkets in Britain are responding to customers who say they care about pesticides, labour conditions and the like, and food miles is becoming an increasingly important issue for consumers too. Faced with the choice of locally grown non-
organic product or an imported organic one, 84 percent of people surveyed by Britain’s Soil Association opted for the former. More than half the people asked in recent ICM poll said they would prefer to buy locally produced dairy products rather than imported brands, including Anchor.
Country Life was the only packet butter brand in Britain showing year-on-year growth in the six months to 30 September, according to its maker, Dairy Crest. This success presumably reflects Dairy Crest’s recent advertising campaign, which attacked Arla Foods UK for shipping Anchor butter 11,000 miles from New Zealand when Country Life was made on the doorstep.
Tesco, the biggest grocer in Britain, meanwhile has ramped up its regional buying capacity to capitalise on the growing consumer interest in farmers’ markets and locally grown produce. It is opening regional buying offices in the East, Midlands, North, South and Southwest of England, as well as in Wales and has also launched ‘regional sourcing’ website, offering profiles of suppliers and urging customers to recommend their favourite regional products.
Wal-Mart, the world’s biggest retailer, has made sustainability in all its forms key concern. Ron McCormick, an executive in the company’s produce division, has said the chain is already buying wide variety of produce based on what’s available in each region. “Our whole focus is: How can we reduce food miles?” he says.
The Energy Panel of the Royal Society of New Zealand on 22 September released report “2020: Energy Opportunities”. Some form of price on greenhouse gas emissions is inevitable, it portended, “and we should prepare ourselves for that price”. It advised organisations and businesses to start quantifying their carbon emissions, begin reducing them and identify the new business opportunities and threats presented by the drive to reduce carbon emissions. Food miles was among the threats identified in the report.
The New Zealand Wine Company, producing Grove Mill and Sanctuary branded wines, has become certified through Landcare Research’s CarboNZero programme. This means the company contributes no net carbon dioxide emissions into the atmosphere, thereby making no contribution to global warming. More companies – if they are smart – should be developing similar initiatives.

Bob Edlin is regular contributor to Management.

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