Familiar Territory

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-By John Boley

A couple of months ago The Economist, not normally noted for hiding its head in the sand, published a baffling ‘special report’ on Australia which gave the impression that news of the discovery of the entire continent had only just reached its august offices. “Australia could become a sort of California,” the respected weekly ventured to suggest, calling it “the next Golden State” but dismissing it as “rich, tranquil and mostly overlooked” and “the country that never makes the front pages of foreign newspapers”.

Sensing that this condescending view of the nation did not chime with the general public’s view of Australia’s growing world ‘presence’, we sought the views of the chief executive of the Australian Made, Australian Grown campaign which is celebrating its 25th anniversary this year. Understandably, Ian Harrison sees the Commonwealth in rather different terms.

“I think we are seen clearly now as an international market, as a provider of commodities and resources and as a very effective westernised economy,” Ian told Business in Focus. “Our access to Asia is clearly one of our attractive points for business investment and from a European perspective we are probably seen as being partially integrated into Asia, and the Asia growth projections make us a very attractive destination. But our currency reflects the fact that we are nevertheless viewed as having the mining industry as a main driver.

“We’re seen as an open cut mine by the rest of the world so we must have some pretty effective project management and support services for that sector. And in our region we are seen as providing good education.” Ian questions whether it really is good by global standards, adding it “is a challenge for us all the time.”

When the Australian Made, Australian Grown campaign was born, the Labor government had only recently floated the dollar, which Ian believes is high in part because of Australia’s place in the world, although there are two effects and one of them is that imported items are cheaper. “I don’t know what we would be paying for petrol, for example, with a lower dollar. Over the years we have started importing a lot more than we used to” – again, that’s part of the globalisation process.

In another recent interview, a senior resources-industry executive speaking with Focus Media Group described the state of the dollar as “dreadful”. However, he saw little probable change in the mid-term to his business, 90 per cent of which is done outside Australia. Ian can see where he is coming from. We can sell many kinds of product as fast as we can make it into many Asian markets, such as China, because the products are trusted in a way that local products aren’t – Australia is seen to be reliable and as an implementer and upholder of safety and quality standards.

So is business more resilient than many people fear? “I think in the business-to-business area there is more resilience but in the major projects area right now we are losing a lot of work – forward procurement arrangements for a lot of major projects. This is a fact. Competitors from the US – who are also very good in exploration and energy sectors – are winning in tenders where Australian companies have tended to dominate. Each year the procurement function is creeping offshore because you can actually undertake the procurement function more cost effectively outside Australia.” Going forward, he says, looking at the next five years, the profile of work in the pipeline “will have a very different profile due to the impact of the dollar.”

Certain sectors, however, still make it a priority to buy Australian. The manufacturing and transport sectors represent two such players, with blue chip companies such as Bombardier proving to be a positive driving force in the Australian economy. By making strong efforts to purchase products and source materials locally and to support local businesses at every step along the supply chain, companies such as Bombardier are in a position to provide a significant shot in the arm to Australian firms and workers coming out of the GFC.

The construction and resources industries have benefited from this sort of local investment as well. Certainly, it makes sound economic and environmental sense to source prohibitively large or heavy materials from our own backyard; but it would seem that a number of Australia’s top firms also see it as a point of pride to buy locally. By purchasing materials from their literal neighbours, these companies can be assured of their quality, safety, and workmanship, and can take pride in supporting their local partners. And given the significant contribution of these sectors to the whole of Australian industry, the impact they stand to make could be enormous.

Looking at sectors with a shorter pipeline like food produce and beverages, “we are seeing a significant difficulty in the marketplace straight away. The wine industry has struggled tremendously in the US in the last 18 months. Food products being sold by Australian producers – condiment-type products, for example, from small producers who have been niche exporters into big markets such as the US – they are facing a severe challenge at the moment.”

How much and how long has it taken to get the triangular Aussie-made symbol well known? It is celebrating its quarter century this year, introduced by then PM Bob Hawke under a Labor government in 1986. “As for the cost of getting there – absolutely enormous,” says Ian, deadpan. “The federal government in the first ten years of this campaign used to make a significant contribution to its promotion – a sum in the order of $2-2.5million was committed to marketing. But now, with 1,700 companies licensed to use this logo, included in that are some very large companies, and their own marketing budgets where they promote the symbol can be enormous.

“I don’t have a precise figure but it’s hundreds of millions of dollars – just the promotion we have had in the past 12 months from the likes of Woolworths, Coles, Harvey Norman, etc – quite apart from the logo appearing in labelling – it’s a big figure. This ‘budget’ is the campaign, not Ian’s own. “Correct. We are a not-for-profit campaign, funded not by government but by the licence fees that companies pay to use the symbol. The fees aren’t great, of course, we want to be part of the solution not part of the problem – it’s a very competitive marketplace for Australian goods at the moment, it’s a tough market out there. In that context it’s important that our costs are kept minimal.”

At the heart of the campaign is “identifying what is and what is not Australian. The reason we have the Australian Made, Australian Grown logo is to enable manufacturers and producers (and fishermen) to clearly identify that their produce is authentically Australian. It’s also a tool for consumers to identify products that are Australian if that’s what they are looking for. It’s a branding campaign and it facilitates consumer choice.

“The logo is a certification trademark. Its use is governed by a strict set of rules.” Of course there are lots of regulations outside Australian Made, Australian Grown that protect the consumer, straightforward trading-standards laws that don’t allow manufacturers to make false claims, “but there are a lot of grey areas as to what constitutes Australian made, a lot of interpretation to be done.”

A product needs to be ‘substantially transformed’ in Australia to qualify – “more than 50 per cent of the cost of making it must be here, not just assembling parts from overseas. You have to add value in Australia.” However, Ian acknowledges that “100 per cent Australian is pie in the sky. There are very few things that we could call [completely] made in Australia. Very few food products, even the ones that are made – you would think – from 100 per cent Australian materials, they have probably got some sort of imported content. Take cheese for example: you need rennet to make cheese and all rennet is imported into this country.”

Ian’s team campaigns against the sort of “Australiana” advertising, “where people are inferring their products are Australian when it’s not the case” as with online ugg-boot trader, Marksun Australia, which was recently and very publicly found guilty of falsely claiming its boots were made in Australia although they were made in China. “Shoppers have the right to know where the products they buy come from. Marksun showed complete disregard for both these points and as a result must face the consequences of the law,” said Ian.

The little green-and-gold triangle has certainly made its presence felt in the last 25 years. Ian says “Melbourne University did research a couple of years ago without our input that showed the consumers appreciate the existence of a certification trademark, there’s a sense of comfort, the visual impact is powerful – because 95 per cent of people recognise the logo and more importantly, 85 per cent trust it more than any other country of origin symbols such as flags or maps, pictures of animals. We believe the logo helps in such difficult trading circumstances [as today’s[. Because there has been a significant upturn in nationalistic pride globally, not just in Australia. The significant shave to confidence that occurred with the so-called GFC and the ongoing regular threats – we’re a long way from out of the woods with respect to financial stability in the global market – has filtered through to many markets that are not doing as well as Australia in global terms.

“People are more aware now of the need to invest back into our own community; consumers are thinking more when they make a purchase decision that it may make sense to buy more Australian product or produce. In that context the the Australian Made, Australian Grown logo stands supreme as an effective, trusted, easily identifiable symbol.”

Given the clean-and-green image, the standards and quality of domestic food and beverage (in particular), you wonder sometimes why – other than availability – anyone would want to buy foreign, says Ian. “Australians ought to be a bit prouder about what we make.”

So how does the campaign measure against all the other “buy OURS” logos shouting on the world’s supermarket shelves? “There are markets around the world that recognise the logo very extensively – China and other Asian markets, for example. We haven’t tried to benchmark the Australian Made, Australian Grown campaign against other generic national campaigns but we have been approached a lot of times by other countries – I can think of Canada, Indonesia, the Americans, South Africa, New Zealand [among others] who have enquired what we do, many of them having visited, and they take our code of practice and our literature and regard us I think as a bit of an exemplar.” Ian hasn’t tried to quantify just precisely how successful the Australian Made, Australian Grown campaign is against ‘competition’. But “this is an area where I think Australia has done it very well.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 6:40 AM AEDT