Food and grocery sector threatened by Carbon Reductions Scheme: AFGC

Posted by James Ferre on 15th September 2008

The Australian Food and Grocery Council has urged the federal government to implement a Carbon Pollution Reductions Scheme (CPRS) which ensures that Australia’s food and grocery manufacturing sector’s international competitiveness is maintained.

“It is industry’s view that any emissions trading scheme which does not include international emitters represents a real threat to the packaged food and grocery industry,” Kate Carnell, Chief Executive of the AFGC, said in a statement.

Ms Carnell believes that if no global agreement is finalised, the sector, which has annual sales and service income in excess of $70 billion and employs more than 200 000 people, would need an import levy to ensure survival. “In absence of a global agreement the AFGC supports the development of a mechanism, in the form of a carbon import levy, which would allow Australian industry to compete with imports from countries that do not have a carbon trading scheme or tax,” she said. “Alternatively, it is the view of industry that a $5 to $10 a tonne price on carbon would allow the sector to maintain its competitiveness while reducing its carbon emissions.”

“Obligations imposed up and downstream of the farm gate mean that carbon costs will be passed through the food supply chain to consumers,” Ms Carnell advised. “This will undoubtedly result in significantly higher food, beverage and grocery prices for Australian produced products.”

“The affordability of structured change to the food and grocery manufacturing industry largely depends upon at what pace, and at what cost domestic and international change takes place,” Ms Carnell added. “However, for Australian industry to continue to provide a high quality, value added product derived from Australian agricultural ingredients, requires the sector to have faith in an emissions trading framework which gives companies incentives to reduce their carbon emissions whilst maintaining their international competitiveness.”