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posted on:
July
03
2017

Increased Energy Costs Put Pressure on Aus Food Industry

 

Source: The Age


Australia's $126 billion food and grocery sector, under pressure from rising energy costs and keen to reduce its reliance on supermarket giants Woolworths and Coles, is exporting more to the US and China.


And with Woolies and Coles spending billions of dollars in recent years cutting grocery prices, food producers are keen for foreign retailers to invest heavily in Australia. The world's biggest online marketplace, Amazon, and German discount department store Kaufland are the most likely candidates.


Tanya Barden is the new boss of the Australian Food and Grocery Council, which represents packaged food, drink and grocery manufacturers.


She said the domestic market for food producers was "very competitive", with years of price falls at the checkout and skyrocketing energy costs creating skinny profit margins.


"We've had downward pressure on prices for six or seven years and continued upward pressure on costs," she said.


"The doubling, tripling of energy costs are having a massive impact on the industry. That's really going to make a difference between some businesses staying and going offshore."


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