AFGC economic snapshot shows food manufacturing decline

The Australian Food and Grocery Council’s annual State of The Industry report has shown a decrease in the food manufacturing industry's output.

The fourth AFGC/KPMG report showed that overall output was down 4.5 per cent for 2010-11, as well as a decrease in employment of 2.2 per cent for the sector in the financial year 2011-12.

Factors putting pressure on food manufacturing such as the squeeze on margins by the supermarket duopoly of Coles and Woolworths, the high dollar, and high input costs were in the news last month, with Terry Davis, the CEO of SPC Ardmona, speaking of the need for changes to payroll tax and taxation depreciation allowances.

Gary Dawson, the council's CEO, said the report highlighted a difficult environment. According to the research, based on ABS data, there were 335 fewer businesses operating in the industry in 2011-12 compared to the previous year.

“The sector’s growth, competitiveness and ability to create jobs are under threat,” Dawson said.

“The findings of State of the Industry 2012 serve as a warning to policy makers at all levels of government that the Australian food and grocery manufacturing sector – Australia’s largest manufacturing sector – is facing an environment where input costs are rising on everything from commodities to labour to energy, and retail price deflation continues to cut margins, placing the sector under increasing pressure.”

The AFGC has used the report’s release to call for reform in areas such as the mandatory reporting system, streamlining energy efficiency and water use reporting requirements and “clarification that standards and labelling relating to food composition and safety are administered by Food Standards Australia New Zealand and all other consumer related labelling requirements should be in consumer law.”

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