Origin: a state of mind

The real issue is, what do consumers need to know to make an informed choice?

HAVE you tried an Angus beef burger from McDonald’s? Notice anything different about it compared to other beef burgers?

Me neither; there is no difference. Once it has been minced, beef is beef. The Angus stuff is all about marketing.

That’s not a criticism of McDonald's. If customers are willing to pay more for something that sounds good, why not? The benefit of a free market is that suppliers can offer such variations and customers can choose whether to buy them.

The same goes for any efforts to distinguish food based on where it comes from, broadly known as provenance.

Whether it is the breed, variety, origin or the way it is grown, picked, packed or processed, there is nothing wrong with seeking a marketing advantage based on it.

It is also not a new idea. A century ago the French established appellation d'origine contrôlée to preserve their regional wine identities, and many European regions seek differentiation based on provenance for foods such as cheese and smallgoods. King Island does the same locally.

But lately we are seeing the idea extended to a range of other types of food amid claims that customers are now “demanding to know” the origins of their food, including fresh food. Moreover, some are arguing that it is much more than simply a matter of taste or preference but of ethics and saving the planet.

In reality, customers are not demanding anything of the sort. Most McDonald's customers probably did not know Angus beef existed before it was offered to them. And with the exception of the upper end of the wine, cheese and coffee markets, provenance has little or no impact on food purchasing decisions.

Nonetheless, a growing number of suppliers are seeking to achieve a marketing advantage by offering information about where food comes from and how it is produced.

Thus there are vegetables and fruit linked to specific farms, with information about their cultivation. Similarly, beef is being sold in conjunction with the farm where the animal was raised - although, curiously, not the abattoir at which it was slaughtered.

And just as there are people happy to pay more for an Angus beef burger at McDonald's, there are some willing to pay more to have that information provided. Whether it makes sense or they understand its implications, or simply reflects the fact that they have more money than sense, is neither here nor there. It’s their money.

The dark side to provenance is the insistence by some that it be written into law. The French, who have never seen a regulation they don’t like, legislated their appellation regions long ago. More recently they succeeded in making it illegal under international treaties to use such names as champagne or burgundy on wine produced outside those regions, confusing consumers and disrupting wine markets around the world.

But current calls go much further than geographic region. Some want to know whether the grapes (or beef, lamb, vegetables or fruit) were fertilised using chemical fertiliser or chicken manure, whether insect pests were controlled using insecticides or a fly swat, and whether the farmer has an acceptable employment policy with regard to gender and sexual preference.

Others are more concerned about how far the food was transported, whether biofuels were used in the tractor, and if the farmer is planting enough trees. There are also organic consumers who want to know it conforms to one or other of the various certification schemes, and the growing number of “roundtables” and their codes.

The argument is that mandatory disclosure of such information will allow consumers to make more informed choices. Never mentioned is the fact that it will expose producers who use chemical fertilisers and insecticides and have not yet employed any transgender people to harassment and vilification.

Nor is it mentioned that their versions of ethics and environmental responsibility lack scientific credibility and will substantially increase the price of food and reduce farmer competitiveness.

The real issue is, what do consumers need to know to make an informed choice? I’d suggest taste, safety and nutritional value are most important, along with price. Knowing where and how a product is produced is only relevant to the extent that it influences one of these.

Product differentiation is what makes markets successful. There are people willing to pay a premium for coffee that has been passed in the faeces of Asian palm civets, so anything is possible. But a tool for achieving success in the market should not become a device for imposing a particular set of social standards.

Markets work best when they are left alone.

  • David Leyonhjelm has been an agribusiness consultant for 25 years. He may be contacted at reclaimfreedom@gmail.com
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    READER COMMENTS

    Top Ender
    15/04/2013 6:04:58 AM

    The only thing that should matter is that it is Australian Grown and safe. All the rest is just spin and froth.
    Mike
    15/04/2013 6:35:57 AM

    Marketers play on the ignorance of consumers while making production more costly without recompense to the producer, and we wonder why agriculture is in the state it is.
    Looking after home
    15/04/2013 8:32:24 AM

    The only thing that really matters is that we own the food we grow and our farmers get an equitable ROI- and we can continue to position Australia as a clean, green growing environment - that is why provenance is important - the French continue to support their farmers - we have not supported our sustainable competitive advantages - our lax labelling laws are testament to that - imported! "from where? owned by! which country this week?
    David
    15/04/2013 10:53:46 AM

    The longer we ignore focusing on the wants of the customers and keep our heads in the sand by trying to commoditise production the less competitive we will become in my view. We have a great opportunity in Australia but arrogance about our customers and only focusing on ROI will and longing for protectionism will lead to us being less competitive, especially in international markets.
    Alice
    15/04/2013 1:24:04 PM

    While rates of childhood obesity, diabetes, allergies, asthma, autism, cancer (to name but a few) continue to rise, then you better believe parents are damn serious about wanting to know where their food comes from. Moreso as chemical companies takeover food and farms and drive the agripolitical agenda.
    stockman
    15/04/2013 6:26:57 PM

    Leyonhjelm may not be able to taste the difference in Angus burgers but many can. Is he saying a multitude of Australians are stupid paying for a burger if it is no different than run of the mill burgers? Get real old boy.
    Mabel Peyton Smyth
    17/04/2013 7:25:56 PM

    Run a blindfold taste test and it is highly unlikely anyone could pick the origin of burger beef The problem for McDonalds is that if they ever use beef other than Angus in the Angus burgers they could face legal action. Leyonhjelm. is correct but who cares if the consumer is so gullible to spin
    Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

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