Energy costs threaten Australia’s biggest manufacturing industry

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Rising energy costs and lack of reliable supply are threatening to push Australia’s red meat processing offshore.

The Australian Meat Industry Council (AMIC) is currently conducting a survey of its members to determine the scale of the problem and help create an energy policy for the industry.

According to AMIC’s Robert Barker, affordable and reliable energy supply is crucial for Australia’s meat processing sector. Gas in particular is important as a source of reliable energy to maintain the baseload, and for direct input in plant operation.

Early results of AMIC’s survey have showed that energy costs were up an average of 30 per cent in 2016 when compared with 2010.

Some of the larger meat processors reported additional energy costs of $20 million in the past 12 to 24 months.

“The red meat processing industry in Australia is the largest manufacturer in Australia, supporting over 130,000 jobs, most based in regional areas,” said Northern Cooperative Meat Company chief executive Simon Stahl.

“If Australia wants to stop this industry moving offshore, urgent attention to the cost of manufacturing is required at all levels of government,” he told Fairfax Media.

“Energy is at that critical stage, not only in terms of cost but also continuity of supply. Urgent action is required and serious consideration should be given to taking export exposed meat processing plants off the grid.”