Countdown's plan to use Canterbury-grown wheat each year has been welcomed by growers and is probably made possible by the current drought in Australia, South Canterbury Federated Farmers arable chairman Jeremy Talbot says.

''Couplands also tried in the past but the two big Aussie-owned flour mills have undercut them. This season, the drought in Australia prevents this.''

Countdown announced that in-store baked bread and rolls in all its 177 stores nationwide would be made from more than 10,000 tonnes of wheat a year in what has been called the wheat bowl of New Zealand - Canterbury.

Countdown's Nikhil Sawant said the ''multi-year commitment'' would give growers the confidence to invest in their businesses after having to cope with low prices.

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''Giving wheat growers a guaranteed market in our supermarkets provides long-term surety of supply and the knowledge that if they plant crops, we will take them.

''It shores up the whole supply chain and allows growers to reinvest in their businesses and look at other opportunities to make the most of their land.''

Mr Talbot said that when Couplands made the move, it was told it would be undercut by Champion and George Weston, which happened.

Champion Flour makes more than 50% of cereal products in New Zealand and is owned by Japanese company Nisshin Seifun.

Associated British Foods owns George Weston and makes Ploughmans, Tip Top and Burgen bread.

Australian flour is imported and sold to bakeries George Weston and Goodman Fielder, which makes Vogel's, Molenberg, Mackenzie, Freya's and Nature's Fresh.

Wilmar International, of Singapore, and First Pacific Fund, Hong Kong, own Goodman Fielder.

''We've got a huge duopoly; they control the market,'' Mr Talbot said. ''The thing is the farmers and the miller, who are the most important, make the least out of it.''

In New Zealand, all grain used north of Wellington was imported and Christchurch was also importing ''quite a bit'', Mr Talbot said.

New Zealand growers supplied 30% of what was needed in the country and the remainder came from Australia.

''The price for wheat is driven down by what is happening internationally. Other countries get subsidies to grow crops; we can't send wheat to Australia.''

Mr Talbot said the milling wheat tonnage had dropped in South Canterbury since many arable farmers had opted to grow feed wheat.

''Currently, feed wheat is on offer for next year at $430 delivered to Christchurch.''

Mr Talbot believed there was no reason why the Countdown initiative should not succeed and he welcomed proposed country-of-origin food-labelling legislation now being considered by Parliament.

chris.tobin@alliedpress.co.nz

Central Rural Life