In its commentary about the Australian olive oil industry the USITC Report stated ‘the olive-growing industry structure is very concentrated, with an estimated 85 percent of production controlled by about 40 large-scale producers. One company, Boundary Bend Limited, accounts for about half of Australia’s production’.
This prompted Olive Business to explore just how much control of the Australian industry is vested in one enterprise.
According to the Chairman’s Report to the Boundary Bend Limited AGM the company produces 68% of the total olive oil produced in Australia, is the largest exporter at 65% and is the largest marketer of Australian olive oil with control over 80%.
In the two main supermarkets, Woolworths and Coles, through its brands Cobram Estate and Red Island, the company accounts for 80% of retail sales of Australian olive oils. The closest competitor is the supermarket’s own brands at 10% in each case.
In the research funded by industry and the Rural Industries Research and Development Corporation in 2011-2012, employees of Boundary Bend are listed as the research managers for 4 of 9 projects – the only projects vested in a private company.
The commercial and political implications of this dominance are profound for Australian producers. It will be difficult for any other producers to bid effectively for supermarket supply contracts as securing adequate Australian olive oil will be a challenge. Prices paid for domestic oil supplies from smaller producers can be driven down by Boundary Bend as other domestic buyers do not have retail supply contracts.
Given that research will in future be funded by levies on production, the high contribution to the research funds by Boundary Bend will justify greater say in which projects are funded. The same applies to the political agenda as membership subscriptions to the peak representative body, the Australian Olive Association, are also based on production levies.
This prompted Olive Business to explore just how much control of the Australian industry is vested in one enterprise.
According to the Chairman’s Report to the Boundary Bend Limited AGM the company produces 68% of the total olive oil produced in Australia, is the largest exporter at 65% and is the largest marketer of Australian olive oil with control over 80%.
In the two main supermarkets, Woolworths and Coles, through its brands Cobram Estate and Red Island, the company accounts for 80% of retail sales of Australian olive oils. The closest competitor is the supermarket’s own brands at 10% in each case.
In the research funded by industry and the Rural Industries Research and Development Corporation in 2011-2012, employees of Boundary Bend are listed as the research managers for 4 of 9 projects – the only projects vested in a private company.
The commercial and political implications of this dominance are profound for Australian producers. It will be difficult for any other producers to bid effectively for supermarket supply contracts as securing adequate Australian olive oil will be a challenge. Prices paid for domestic oil supplies from smaller producers can be driven down by Boundary Bend as other domestic buyers do not have retail supply contracts.
Given that research will in future be funded by levies on production, the high contribution to the research funds by Boundary Bend will justify greater say in which projects are funded. The same applies to the political agenda as membership subscriptions to the peak representative body, the Australian Olive Association, are also based on production levies.
