Opinions divided over Woolies’ MSA move

Jon Condon, 28/10/2011

Cape Grim brand manager Peter Greenham does not see Woolworths adoption of MSA as diluting the value of MSA-backed commercial brands Dramatically contrasting opinions were evident across the Australian beef industry in the wake of yesterday’s confirmation that Woolworths will adopt full MSA supply early next year (see yesterday’s story “Historic green-light to MSA adoption”).

While the news was enthusiastically supported by beef producers contacted yesterday (see Beef Central’s report being filed later today), a very different signal is coming out of the independent retail sector.

It was not hard to find opposition to any adoption of MSA by Woolworths among 300 butchers and their partners attending the AMIC retail awards dinner in Brisbane last Saturday night.

Their concerns are likely to be expressed at an important MSA task force committee meeting taking place in Brisbane this morning. The meeting is being chaired, somewhat unusually, by MLA managing director Scott Hansen, perhaps seen as an ‘independent’.

A range of stakeholders are participating, including Cattle Council of Australia, Australian Lot Feeders Association, processors, independent retailers and MLA.

Following a phone hook-up earlier this week, AMIC’s retail council has developed a position on Woolworths entry into the program. Today’s meeting has the potential to get heated, one non-aligned participant said, as butchers air their opposition to the process.

In a worst-case scenario, AMIC’s retail committee maintains that the development could kill the MSA program for many independent retail butchers, who have seen it as a critical point of difference between their own operations and those of their supermarket competitors. Some independents could abandon their support for the program, they warn.

There appears, also, to be an underlying sense of affront among butchers spoken to on Saturday night, who feel their loyalty to the MSA program over the past ten years, during which the major retailers ignored the program, is now being abandoned.

Butchers are not claiming that MSA was established for exclusive use by independents, but they fear it is now about to be swept-up by Woolworths for use effectively as a ‘brand’, rather than as an underpinning quality performance tool.

“The independents have been very pro-MSA, because it has enabled the brand owners to push their labels and guarantee their products. It has allowed commercial brands to flourish, because butchers are happy to put their name to a well-performed brand that can drive customers to their business,” one retail stakeholder said.

Should Woolworths follow a maximum MSA boning group 11 strategy (Beef Central stresses, this specification has not yet been confirmed by Woolworths, but has been suggested by a third party close to the program as a likely starting-point) it would create some distinctions between mainstream butcher and supermarket MSA offers.

Beef Central’s industry source pointed out that boning group of 11 would represent a 35-day age on many grilling cuts, whereas the ‘main focus’ among most independent butchers using MSA was on product only requiring up to 21 days’ ageing. 

Independents are also suspicious of the motives behind a move to remove the words, “Guaranteed Tender” from the MSA mark, to be discussed at this morning’s Brisbane stakeholder gathering. They suggested it may be driven by conditions of program entry dictated by Woolworths, which may see advantages in applying its own set of guarantee terms.

Both AMIC’s retailer and processor representative groups plan to oppose the dropping of the ‘Guaranteed Tender’ claim at this morning’s meeting, Beef Central was told.

Butchers also do not support CCA’s move to promote MSA through to the consumer, arguing that it is the commercial brands that should be the contact-point with consumers – not the underling tenderness guarantee scheme.

It seemed ‘very coincidental’ that the timing of the Woolworths MSA program launch early next year closely paralleled MLA’s proposed consumer marketing push for MSA, due to unfold in February (see Beef Central’s earlier story “Consumers to get re-acquainted with MSA”.

Elsewhere in the industry, Beef Central yesterday approached commercial brand managers to seek opinion about the presence of a product in Woolworths’ chilled cabinets bearing an MSA sticker, and whether this could dilute the value of their own MSA-backed branded products.

Peter Greenham, widely regarded as one of the nation’s smartest young marketers, responsible for the highly successful Cape Grim, Pure South and Greenham Tasmania Natural MSA brands, does not see the Woolworths move as a threat.

“I don’t think it will dilute the value of our own beef brands in any significant way,” he said.

“The move will in fact get the name, MSA out there in front of the public more, which should be a good thing if they see it as a positive brand attribute.”

“In our case, we clearly promote our brands names first and foremost, and the MSA aspect to that is specifically in a brand support role. I don’t think the typical consumer will see our product and Woolworths’ as being identical, just because they both carry an MSA sticker,” Mr Greenham said.

“It’s hoped that all stakeholders will promote MSA for what it is – a grading system, not a brand name.”


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