Member Matters

Food for Thought: Member Matters | September 2024

9 September 2024

Food and grocery manufacturers across Australia are facing mounting pressure. As highlighted in our recent State of the Industry report, while turnover is increasing, costs are eating into profits. At the same time, consumer behaviour is shifting in response to cost-of-living pressures, with many opting for more affordable options, including private label goods, over premium products. 

We’re hearing these concerns echoed across our membership. At the Senate inquiry into the Cost-of-Living crisis this month, our CEO Tanya Barden was asked how these pressures are affecting manufacturers and what government levers could be used to relieve the strain. Tanya outlined how rising costs for commodities, labour, energy, and transport are outpacing price increases, leaving manufacturers with shrinking profit margins.  

For instance, in energy, the industry is concerned about the cost, availability and reliability of supply. In the last two years, gas prices are up nearly 90% while electricity prices are up 60%. 

This leads many manufacturers to sacrifice investment in critical areas to stay afloat. 

The sector’s challenges are compounded by the need to invest in new technologies and the transition to clean energy. To address these issues, Tanya called for targeted government support through a tax incentive that will allow manufacturers to remain competitive while contributing to the nation’s economic recovery. 

As cost-of-living pressures persist, it’s crucial for both industry and government to work together to safeguard Australia’s food and grocery manufacturing sector. The road ahead will require collaborative effort and ongoing dialogue with policymakers to ensure our industry’s sustainability. 

SAMANTHA BLAKE
DEPUTY CEO