Australia’s largest manufacturing sector needs productivity gains now
1 August 2025
The peak body for food and grocery manufacturing congratulates Minister Tim Ayres for recognising our sector as a key voice in the nation’s productivity agenda as the largest manufacturing sector in Australia. Food and grocery manufacturing employs nearly 300, 000 people and drives regional economies, as well as making a significant contribution to the national economy and its food security. But the industry is gaining a bigger share of a shrinking manufacturing sector, as recent ABS data shows manufacturing’s share of the private sector is declining due to high costs in Australia and supply chain disruptions.
Therefore, this timely national conversation on productivity is key. For food and grocery manufacturers, that means action in a few priority areas: reducing regulatory burden, strengthening supply chain and transport infrastructure, and ensuring a reliable, affordable energy supply.
AFGC Chair Bernie Brookes, after attending the industry roundtable in Sydney, said:
“This is the right conversation at the right time. We welcome the government’s focus and stand ready to work together with industry and government to unlock growth.”
“Australia needs to move with urgency to invest in productivity gains for us to maintain our globally competitive and resilient manufacturing base.”
Productivity gains in this sector matter. Even modest improvements deliver flow-on benefits across the value chain, boosting competitiveness and reinforcing Australia’s food sovereignty in an increasingly uncertain global environment.
The sector has set a goal to grow to $250 billion by 2030. That ambition depends on smart collaboration, targeted investment, and a national commitment to innovation. Energy remains one of the biggest barriers to growth. Without reliable and cost-effective energy, the sector’s future is at risk.
The AFGC stands ready to work with government to build a stronger, more productive, and more secure Australian manufacturing sector.
AFGC’s submission to Treasury on productivity can be found on our website.
Media Contact | Zandi Shabalala media@afgc.org.au |0430 051 575
