AFGC defends food inflation figures

Posted by Daniel Palmer on 9th November 2009

While the latest OECD figures show food inflation has risen about 40 per cent in Australia over the past decade, Australian Food and Grocery Council (AFGC) Chief Executive Kate Carnell highlighted that food has actually become more affordable for most Australian families due to average wage rises.

The latest ABS figures (May 2009) show average weekly earnings for men and women in Australia have risen by more than 50 per cent over the past 10 years with figures showing total weekly earnings rose from $611.00 in May 1999 to $922.50 in May 2009. Such a rise has helped override the impact of the 41.3% increase in food prices over the same period, Ms Carnell suggested.

Australia’s leading supermarkets were criticised upon the release of the food price data, with many blaming a lack of competition for the price hikes in the past decade. However, the supermarket chains refute the claims, and they have found support from the AFGC – Australia’s leading representative body for food and beverage manufacturers.

“Australia’s food and grocery manufacturing sector is under price pressure from a range of fronts including weather extremes like drought and floods and the cost of inputs including packaging, water, transport and energy which have all risen significantly,” Ms Carnell noted. “The rapid urbanisation of the world’s growing population has meant that land use for agriculture has declined, putting further pressure on food production and prices.”