FSANZ price hikes are “unacceptable” says AFGC

Posted by AFN Staff Writers on 13th February 2013

The Australian Food and Grocery Council (AFGC) has declared that Australian government fee increases by Food Standards Australia New Zealand (FSANZ) are “unacceptable.”

FSANZ made silent increases to the fees it charges food manufacturers and importers to have a food product or ingredient approved from December 19, 2012, with some fees increasing as much as sixty per cent.

FSANZ approval for a new product or ingredient already costs between $10,000 and $100,000 because food standard laws need to be altered for the approved product.

An AFGC spokesperson told Australian Food News today that while industry expects to make a contribution to pay for resources, the move by FSANZ was “price gouging” or “cost shifting to compensate for public sector inefficiencies” and upsetting many food businesses.

“The increase in charges is highly prohibitive for an SME to have a new food product, additive or ingredient approved by FSANZ, because it requires an amendment of food standard laws,” the AFGC spokesperson said.

“The government has to realize that any additional regulatory costs run the risk of driving jobs offshore, particularly when it imposes a 50 to 60 per cent increase in one hit on a sector that facing difficult trading conditions,” the AFGC spokesperson added.

In June 2012, FSANZ received 12 submissions regarding the fee increases, with most submissions expressing concern over the amount of the proposed increase of 50 – 60 per cent.

FSANZ responded to the submissions saying that “previous analyses of cost recovery have underestimated the costs associated with application work.”

“FSANZ acknowledges the possibility of the hourly charge increase affecting industry innovation but believes the increase is not significant across industry as a whole and therefore will have minimal impact in terms of industry innovation,” a FSANZ spokesperson said.

The AFGC spokesperson told Australian Food News that “red tape” and “regulatory costs” already add burden to Australian food manufacturers which “threatens their global competitiveness and reduces companies’ ability to attract investment and reinvestment.”