Surviving Marmageddon

For the last 15 months the news in New Zealand has been filled with talk about Marmageddon.  What’s that you ask?  Sanitarium Marmite, a pungent yeast spread, is a popular staple in New Zealand households. The bitter, salty, dark brown paste is the nation’s answer to Australia’s Vegemite and Promite, or the UK’s own version of Marmite.  Growing up in New Zealand, you always had Marmite spread liberally on your toast at breakfast, or hidden in your lunch box sandwiches.  

Since 1919, all of New Zealand’s Marmite has made in a single factory, located on the outskirts of Christchurch. It’s manufactured under license using a recipe adapted from that used for the UK’s Marmite spread.  Most notably, New Zealand’s version includes sugar and caramel which results in a slightly less tangy, smoother tasting product.  However, both versions use the yeast by-products of beer brewing as their core ingredient.  Much like Vegemite, you either love it, or you hate it.

I love it.  When Garry and I were living in the UK, I used to carry jars of Marmite home with me after every New Zealand visit.  My parents even bought me a large jar when they came to stay in 2007. Since returning to Australia I’ve been able to satisfy my cravings without resorting to imports as the local Supermarket sells small 250g jars of the stuff.   However, this availability proved short-lived.  Production of New Zealand Marmite was halted in November 2011 when the Christchurch factory closed for repairs.

The Christchurch factory had been damaged by the deadly February 22, 2011 earthquake and its aftershocks.  Its cooling tower had cracks and closer inspection revealed other structural issues. Sanitarium was forced to halt production.  It originally anticipated that repairs would take seven months to complete.  By March 2012, its stocks had run out, leaving consumers with the specter of bare shelves for at least three months.  The price of Marmite quickly went through the roof.  Large jars were offered online for as much as NZ$800, considerably more than the regular retail price of $4.25 for a 250g jar.

At the time I was oblivious to the shortage. I notice its disappearance from our Supermarket shelves but assumed that Coles had decided to stop stocking the product. Only weeks earlier I’d blithely and lavishly spread the last of my Marmite on toast.  I decided to resort to imports once again and my sister-in-law to bring Marmite when she came to visit.  It was then that I learnt of an emerging storage the media were dubbing "Marmageddon".

In June last year Sanitarium discovered more earthquake damage, pushing Marmite’s return to shelves out into 2013. Marmite has now been out of stock for a year.  However, the end of the drought is in sight.  This week, the company announced that Marmite would be back on shelves from March 20.  It claims to have already begun full production of 250g jars, its most popular size.  I’ll be interested to see if our local Coles will restock the product after a 12 month hiatus.  I fear they’ll decide people like me have moved on to other products.  We haven't.  I hate Vegemite and English Marmite is just awful stuff.

I’m reasonably optimistic marmite will return to local Supermarket shelves as our store recently introduced a classic New Zealand products section.  A few weeks ago we suddenly discovered a shelf groaning with L&P soft drink, cheese flavoured Rashuns and other popular New Zealand junk food.  If I’d not just returned from a month with family, drinking L&P almost daily I’m sure I’d have made an impulse purchase.  As was I relented just enough to buy a packet of coconut Krispie biscuits, a taste sensation I’ ve not had since childhood.

The Banana Republic

Cyclone Yasi ripped through North Queensland in early-February this year. It was Australia’s most powerful cyclone in living memory, recording wind speeds reaching 225km/h at its peak, and leaving a trail of destruction in its wake. The nation’s banana crop was hit particularly hard. In the months since, the fruit’s price has soared. As of yesterday, our local supermarket was selling bananas for a staggering $13.98 per kilogram, or more than $30 per pound. Elsewhere I've seen them selling for at much as $15.00. Prior to Yasi’s arrival bananas were going out the door for less than $5 per kilo.

However, the soaring price of bananas, while understandable, isn’t the only retail price that’s stunned us since our return from London. In fact, almost every price tag has been something of a shock, regardless of the retail category. For example, our cable television bill has doubled, our internet bill is almost three times more expensive and our first utility bill was mistaken for an accounting error. In short, Garry and I are beginning to appreciate that fresh food and most retail items were significantly cheaper in London.

Nationwide, Australia's retail prices are becoming a contentious subject. As the Australian dollar rises in value, offshore online shopping has began increasingly popular, and frequently cheaper than buying locally. We’ve already noticed identical items online that are significantly cheaper than prices we’ve seen in local stores, even after shipping costs are added to the invoice. Given the tyranny of distance and its impact on freight costs you’d expect price tags to differ. However, the difference has become so extreme that it’s clear something else is driving up local retail prices.

Numerous theories abound. Retailers claim that commercial rents are three or four times higher in main street Australia. The minimum wage, and thus the cost of labour, is also higher. There may be some grain of truth to these claims. Commercial rent typically represents up to 25% of revenue in Australia, while global brands typically pay less than 10% in the United States. Last week the minimum wage was increased by 3.4%, or $15.51 an hour, to $589.30 a week for a full-time employees. By contrast, the current minimum wage in the UK, set in October 2010, is £5.93 per hour for adults aged 21 or older; less for younger workers. That less than A$9.20 per hour.

However, higher commercial rent and labour costs cannot account for the entire price differential. Analysts suggest that Australians, use to higher prices generated by a weaker dollar, are still willing to pay the same retail price even though the wholesale cost of imported goods has fallen 40% or more. Personally, I’m waiting for the new banana crop to mature.