Fast action from Government “critical” for food manufacturing survival

Posted by AFN Staff Writers on 23rd August 2011

The Australian Food and Grocery Council (AFGC) is urging the Federal Government to act quickly to keep Australia’s food manufacturing industry alive.

The AFGC has called on the Australian government to “remove unnecessary regulation and duplication, such as food labelling changes, and reduce costs of doing business”.

The AFGC also says it is “critical” that Australian government fast-tracks its National Food Plan.

The AFGC’s CEO Kate Carnell says several food and grocery manufacturing operations have already moved offshore because of the challenges facing the industry in Australia.

“We need Government to support a business environment where companies can innovate and value-add to remain competitive. At the moment, many leading food and grocery companies are seriously weighing up their future options for manufacturing in Australia,” Ms Carnell said.

“It’s vital that the Government creates a broad-base policy that supports a viable, competitive and robust food and grocery manufacturing sector that will continue to deliver high quality products for Australia and the export market.”

Over the past two months, around 300 job cuts have been announced across the A$102 billion food manufacturing sector. Recent Australian food industry cutbacks have included:

– 150 jobs lost at SPC Ardmona following the announced closure of its Mooroopna factory by the middle of next year, and

– 146 jobs lost at Heinz following the closure of its Girgarre factory in north-east Victoria.

The AFGC’s State of the Industry 2010 report showed a total loss of 3,400 jobs since 2006-07 within the food manufacturing sector.

“Industry is facing a growing list of pressures across Australia’s long supply chain, such as high labour prices, less flexibility on wages, higher energy power prices, high transport costs, growth in private label brands and near record global commodity prices for raw materials such as sugar, dairy, cocoa and wheat,” Ms Carnell added.

“Industry’s competitiveness is being heavily impacted by cheaper imports due to the high Australian dollar. The weak retail sector is causing more discounting and adversely affecting margins. It’s also bad timing for the Federal Government’s carbon tax, which is another new cost to industry.”