Severe job cuts are predicted for Australia’s food and manufacturing industry by 2020.  This could result in a loss of our favourite Aussie brands on the supermarket shelves.  The Milk Moustache’s Alexia Attwood reports.   

VO: Up to 130,000 jobs could be lost from the food and grocery manufacturing industry in Australia by 2020. This latest finding from the Australian Food and Grocery Council means the closing down of businesses, and a reduction in the variety of Australian brands on our supermarket shelves.

Kate Carnell, the Chief Executive of the Australian Food and Grocery Council, says there are many factors contributing to these predicted job losses.

Kate Carnell: The real problems that are hitting food and grocery manufacturing in Australia at the moment are significant increases in the cost of manufacturing in Australia; that’s wage increases, significant increases in the cost of power, and freight, as well as that the high Australian dollar is meaning that imports are cheaper than they’ve ever been before, and then you add the price war between Coles and Woolworths, reducing the margins to Australian farmers and Australian manufacturers.  When you put all those things together you can see the profitability of these companies is under extreme pressure, and the outcome of that is of course job losses.

VO: Ms Carnell says the retail market is heavily concentrated with Coles and Woolworths having significant control over the food and grocery industry in Australia. She says these supermarkets are increasing their own private labels on the shelves, importing cheaper products from overseas, only stocking market leaders, and competing with each other by lowering their prices.

Kate Carnell: Now we understand that some consumers can see that as being a good thing for consumers, but in the end it will mean we won’t be able to buy the brands that they’ve bought for a long time, that they trust. It means that the choice they have in supermarkets will be significantly reduced and, in the end, it will be mean that their capacity to actually buy Australian owned and manufactured food will be significantly decreased, and we don’t think consumers want that.

VO: But Coles spokesperson, Jim Cooper, says Australians are happy with the status quo, and that the number of Coles customers has risen by over 2 million people in the past 3 years.

Jim Cooper: In Australia, nobody is forced to shop anywhere they don’t want to, so consumers will come to retailers and indeed, supermarkets, because those supermarkets are meeting their needs. Equally nobody is forced to buy or not buy any products that they don’t want to, and retailers will typically carry the products that their customers want to buy.

VO: The Australian Food and Grocery Council is calling for the government and food industry to implement a variety of strategies to offset all these industry pressures and limit predicted job losses. Their recommendations include establishing a Code of Practice for Supermarket Trading Relationships to be overseen by a Supermarket Ombudsman, to ensure all brands are recognised on a fair and equitable basis.

This is Alexia Attwood, reporting for The Milk Moustache.  


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