Carbon tax to put too much pressure on food and grocery manufacturers

The federal government’s proposed carbon tax will increase the cost of food and grocery manufacturing in Australia, which is already under intense pressure, the Australian Food and Grocery Council (AFGC) has warned.

AFGC Chief Executive Kate Carnell said a tax on carbon would be another cost to food and grocery manufacturers who are currently weathering a “perfect storm”.

“Industry is under growing pressure from rising input costs across the supply chain, such as energy, wages and water, higher transport costs, record high global commodity prices and supermarkets forcing down retail prices, which is seriously impacting margins,” Carnell said.

“The high Australian dollar is making imports cheaper and the proposed tax on carbon will further undermine the competitiveness of Australian manufactured goods on supermarket shelves.

“The compensation package to be given to Australians will not encourage people to buy Australian-made food and groceries which will be made less competitive as a result of the carbon tax.

“The compensation, announced by Climate Change Minister Greg Combet, will not benefit Australian food and grocery manufacturers in any way.”

Food and grocery is Australia’s largest manufacturing sector, worth more than $102 billion annually in turnover to the nation and accounts for 9% of Australia’s international trade valued at $449 billion in 2008-09.