The Australian Food and Grocery Council (AFGC) has announced it will expand its representative reach to include small-to-medium enterprises (SME).
Australia’s peak representative body for the food and grocery manufacturers has voiced its criticism of the supermarket dominance in Australia for over a year, and has led the charge for a Supermarket Ombudsman to be instated to protect smaller companies and oversee the predatory behavior of Coles and Woolworths.
The $108 billion food and grocery sector is Australia’s biggest, and according to a report commissioned by the AFGC last year found that if the current environment continues, 130 000 jobs in the sector will be lost by 2020.
But Australian Manufacturing Workers Union Food and Confectionery Division National Secretary Jennifer Dowell had a much more dire outlook when she spoke to Food Magazine earlier this week, Manufacturers’ Monthly’s sister publication.
"It isn’t going to be 2020 before this happens, I have been here for 20 years and I am always in and out of factories and I can tell you with absolute certainty that it will be before 2020," she said.
The latest announcement from the AFGC will allow them to ensure the "emerging issues" and needs of smaller food and grocery manufacturers are addressed, and ensure the industry is dealt with as a whole, so that big businesses cannot dominate the market.
The AFGC said in a statement today it has been perceived as representing the "big end of town," but the new focus will provide a united voice across companies of all sizes.
"Expanding SME membership has allowed AFGC to improve its capacity to provide a strong, united voice and specialist services for the entire food and grocery industry," AFGC chief executive Kate Carnell said.
"AFGC has also updated its membership fees to reflect the capacity of smaller manufacturers and is encouraging more SME CEOs to serve on AFGC’s Board."
Bundaberg Brewed Drinks chief executive John McLean was recently appointed to the Board and according to Carnell, offering a wider range of services is important while they’re under such intense pressure.
"Industry is currently weathering a ‘perfect storm’ from an extraordinary number of pressures including rising costs of wages, water and energy, a carbon tax, global commodity prices: sugar, dairy, cocoa, oilseeds and wheat and the near record Australian dollar making imported products significantly cheaper."
"Intense supermarket discounting in and private label growth is also forcing down retail prices and seriously impacting manufacturers’ margins."
Dowell also believes the industry is facing more pressure everyday due to supply chain and pricing issues.
"The food processing industry in Australia is captive to the duopoly, they don’t have control of their destiny whatsoever, the decision Coles and Woolworths make they just have to go with.
"There is increasing pressure to cut costs and to produce for private label so they’re being pushed to the wall.
"Small companies are going out of business, small and medium ones are going offshore, many already have facilities in Asia Pacific regions and at the moment there is just huge pressure for food manufacturers to keep their heads above water."
The Australian Competition and Consumer Commission (ACCC) has also called on individuals and companies to dob in anti-competitive and bullying behaviour by the major supermarkets, which it conceded may end in criminal charges before any lessons are learnt.
The inaugural SME Forum will be held by the AFGC on 15 March in Sydney.