Australian food and grocery industry at a crossroads
The “2020: Industry at a Crossroads” report, launched today at Australian Food and Grocery Council’s Industry Leaders’ Forum in Canberra forecasts severe job losses and continuing loss of competition in the food and grocery manufacturing sector by 2020.
“Industry turn-over is forecast to decline by 0.2 per cent per annum over the coming decade from $108 billion to between $105 billion and $106 billion in 2020. Over that same period, retail demand is due to grow at 3.7 per cent per annum with the growth gap being increasingly filled by imports and retailers’ private label products,” said the report, conveying a strongly pessimistic tenor.
AFGC Chief Executive Kate Carnell said “Australians and our political leaders overwhelmingly want a local, value-adding food and grocery manufacturing sector – it’s Australia’s largest manufacturing industry that we can’t live without”.
Ms Carnell urged political leaders to consider the report and reconsider the current “business-as-usual” approach towards the sector.
Other key findings and trends outlined in the industry-first report, released at AFGC’s Industry Leaders’ Forum in Canberra, include:
- 55 per cent of surveyed food and grocery manufacturers were negative about the future of industry
- If there are no policy reforms, industry’s employment numbers could fall from 312,000 to around 180,000 by 2020 – a loss of up to 130,000 jobs
- Up to a further 6,000 jobs are forecast to be lost in associated industries including agriculture
- Towns in regional NSW, Victoria and QLD are expected to be hardest hit by employment losses
- The retail environment is expected to remain as challenging, if not more challenging, for food and grocery manufacturers over the coming decade
- The retail market is expected to remain highly concentrated, with Coles and Woolworths forecast to have a combined supermarket share of over 80 per cent in many categories
- Private label products are forecast to grow strongly and could account for 40-50 per cent of total supermarket sales by 2020, consistent with developments in international markets.
The 2020 report outlines several options for industry and Government to support a viable, competitive and robust food and grocery manufacturing sector.
Ms Carnell said: “A ‘do-nothing’ approach in this area is no longer acceptable – the time for a new policy menu to encourage investment, innovation and growth is now as the jobs and livelihoods of 312,000 Australians, and the future of our food supply, depends on it.”