Australia’s food and grocery manufacturing sector is facing continued cost pressures from energy, transport, packaging and ingredients, with the Australian Food and Grocery Council (AFGC) calling for measures to support local production.
In a media statement, AFGC Chief Executive Officer Colm Maguire said recent global disruptions had highlighted the importance of maintaining domestic manufacturing capability.
“Australians are feeling the pressure when they pay the mortgage, fill up the car or do the weekly shop,” Maguire said.
“There is a good lesson to learn here. Every time there is a global disruption, whether it’s COVID, conflict in the Middle East or rising energy prices, Australia is reminded why it matters that we can make things here at home.”
Maguire said food and drink inflation had eased from previous highs, but manufacturers continued to face elevated operating costs.
“When oil prices rise, it’s not just petrol that is affected. It increases the cost of transport, packaging and production right across the economy and this takes time to flow through to prices at checkout for consumers,” he said.
“Nobody wants higher prices, but there is no switch we can flick to bring costs down overnight.”
The AFGC also said higher interest rates were making investment in equipment, technology and production capacity more expensive for manufacturers.
The industry body is calling on the government to support manufacturing productivity and reduce the cost of doing business, including through tax incentives and reduced red tape.
“The more food and grocery products we can make here in Australia, the stronger and more resilient we will be when the next disruption comes,” Maguire said.
According to the AFGC, food and grocery manufacturing employs more than 301,000 Australians, supports one in three manufacturing jobs and contributes $183 billion to the Australian economy.
“Australia has the people, the capability and the businesses to do more manufacturing locally,” Maguire said. “The long-term answer is making it easier and more affordable to make food and groceries in Australia.”
