The Rural Distributor Marketplace in Australia
The marketplace for rural crop protection distributors, commonly referred to as ‘resellers’ within Australia, is one that offers a distinct lack of variety and market competition for Broadacre and Horticultural growers. According to extensive research conducted over many consecutive years, Kleffmann Australia has established that there are only four major reseller agencies, namely, Landmark, Elders, AgLink and CRT. Between them, these separate distributors essentially hold a monopoly on the crop protection market, with only a small percentage of growers being recorded as purchasing products from other smaller retailers, or independent stores.
As a result of this heavily slanted marketplace, angled towards just four main competitors, it can be logically concluded that these key resellers hold a large sway of influence in shaping the opinions and practices of Broadacre and Horticultural growers, especially in regards to their crop protections programs, and the chemical manufacturers they are aware of.
In 2014, Kleffmann Australia surveyed 86% of the arable farming area in Australia, covering 22 million hectares of treated Broadacre and Horticultural crops, with a considered market value of $1.4 Billion (AUD). Within both of these farming markets, (Broadacre and Horticulture) Landmark, Elders, CRT and AgLink remained the top 4 distributors in relation to the crop areas treated by Australian growers.
Landmark, Australia’s largest and most influential rural distributor, places great emphasis on accessibility, competitive pricing and convenience for it’s customers and covers many areas of farming practice, including of course crop protection. In 2014 products purchased from Landmark were recorded as treating 32% of the arable area in Australia, along with 32% of the area dedicating only to Broadacre farming. This sizeable increase, resulting in a one-third market share being held by Landmark can perhaps be related to their recent development of company owned generic chemical products, branded as Genfarm. In accordance with their company values, these generic options now offered by Landmark are competitively priced, and are marketed alongside many other farming services including Seed, Finance and Insurance, making their vast range of stores in over 400 locations across Australia, the most convenient (and sometimes the only) option for Broadacre growers in particular.
Landmark’s market domination does not extend as far in the Horticulture arena however, with AgLink, (who are owned and governed by 22 shareholding members) having treated 31% of Australia’s arable Horticultural area with products from their stores, compared with a lesser 21% from Landmark. AgLink’s commitment to linking professionals in agribusiness, and providing reliable technical advice rather than a wide range of convenient local services and generic products may explain their larger marketshare in the more technical Horticultural farming arena, and their lesser market position of 13% in total when combined with the treated area of broadacre crops.
Another of the four major players, Elders, offers a similarly wide-ranging service to Landmark, covering 14% of Australia’s arable area with their purchased products. Committed to maximising the performance of their customer’s farming enterprises, Elders held 14% of the Broadacre and also the Horticultural arable areas treated within Australia in 2014. Finally, CRT, founded recently by a small group of growers determined to achieve better deals for independent retailers and their farming customers, offer a more traditional rural merchandise option for growers.
They as well, covered 14% of the total area surveyed with their products, whilst managing 15% and 13% of the Broadacre and Horticultural distribution respectively. The remaining 27% of arable Broadacre and Horticultural area in Australia in 2014 was treated by an assortment of independent and local retailers along with association groups. With the remaining treated area being such a small percentage, it reveals the genuine market domination of the four largest rural distributors of crop protection products in Australia, as well as the chronic lack of options and competitive choice for growers within the chemical marketplace.
Kleffmann Group Australia