miketrees wrote on Jul 13
th, 2014 at 8:22am:
Australian food may be more expensive, but in a strange irony its too expensive to grow food here as well.
The writing is on the wall. Australian food processing industry is on the verge of becoming extinct due to high cost of production. With the industry will fall the growers because the only market left will be the fresh fruit and vegetables market which will be very seasonal. Bye bye Birdseye.
http://www.abc.net.au/radionational/programs/breakfast/food-processing/4737622"...US food processor Simplot is threatening to close two of its Australian frozen vegetable plants. The company says the cost of manufacturing in Australia is simply too high. Is our food manufacturing sector going the way of the auto industry? Madeleine Genner investigates.
While the Australian manufacturing industry has had plenty of attention of late—with Ford last month closing two car plants and axing over 1000 jobs—the next sector to suffer the twin blows of a high Australian dollar and cheap offshore labour may be food manufacturing.
Simplot, a major frozen vegetable processor, has announced it may have to close two of its Australian plants—and fire 325 workers.
The US food giant produces products for household brands like Edgell, Birdseye, and even Chiko rolls. But Simplot says its frozen vegetable plants in Bathurst in NSW, and Devonport in Tasmania, simply can't compete with cheap imports.
And Australian vegetable growers are calling on the government to do more.
Andrew Craigie is a vegetable farmer from the north-west coast of Tasmania. He grows peas, beans and potatoes. Some are for the fresh market, but a lot of his produce goes to the frozen vegetable processor Simplot.
‘It’s a horrible feeling,’ he says of the announcement that Simplot may close. ‘These sorts of announcements destroy everybody’s confidence to invest in future technologies to make themselves more efficient, to stay on world’s best practice and scale of producing.'
We can’t wait till 2025. The Australian Food Processing Industry is struggling to stay viable right now under the demands of increasing costs including labour, electricity, freight—a whole range of factors are impacting on our ability to actually process food here in Australia, and if we’re not careful we’ll be relying on imported foods. And that brings with it a whole range of concerns in itself.
ANDREW WHITE, AUSVEG
‘We’d have to re-evaluate our whole business of how we could actually survive, adjust, diversify. It would be a huge problem to anyone in our position.’
Mr Craigie says the frozen food market is vital for farms like his—Simplot Devonport processes 45,000 tonnes of vegetables for the frozen market each year, and dumping that produce on the fresh food market would create a catastrophic glut.
At this stage Simplot isn't definitely closing its doors—but the company's frozen vegetable plants in Bathurst in NSW and Devonport in Tasmania have been given two months to turn their fortunes around.
In a statement, the company said the threat of closure was due to ‘unsatisfactory financial returns arising from a very competitive food industry environment and unsustainably high costs associated with manufacturing in Australia.’
The two plants employ almost 500 permanent and casual staff and, for the moment, Simplot's Devonport manager Richard Hays is remaining upbeat.
‘I think from my perspective we want to do everything—and it’s my commitment to the people here to do everything we can—to be as cost-competitive as possible,’ he says. ‘And I think we’ll understand that over the coming months—what that looks like.’
But the company faces an uphill battle. Right now, the Tasmanian facility processes a range of frozen vegetables while the NSW plant is a major processor of sweet corn.
Both are under pressure due to cheap imports, and Australia's peak vegetable body AusVeg wants the federal government to do more..."
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