Food producers 'at risk' as prices bite

Australian businessman Dick Smith has taken a swipe at foreign-owned food companies that advertise their products as Australian.

Mr Smith, the owner of Dick Smith Foods, told the Senate Select Committee on Australia's Food Processing Sector that he supports the market dominance of supermarket chains Coles and Woolworths because they are Australian-owned.

And he believes action must be taken to stop the takeover of Australian food companies by foreign owners.

"[They] take over the Australian company, they then sack the workers, close down the plant and then get it made completely overseas but with a famous Australian brand on it," Mr Smith said.

To combat this trend, he believes supermarkets should be forced to stock a certain percentage of products made in Australia.

Mr Smith says he doubts that much that can be done to protect the domestic agricultural sector because consumers want to buy food at the lowest possible price.

But he believes major supermarket chains should be forced to stock much more Australian-made food than they currently do.

"I think we still have rules about Australian content on television ... Why couldn't we have a rule that says there has to be a certain Australian content in retail shops," he said.

"And what would be wrong with that? Because that means we're going to keep our food security and I think most Aussies would accept it."

The select committee is looking at challenges facing Australia's food security including climate pressures, international competition, infrastructure, access to skilled labour and regulation including anti-dumping laws and free trade measures.

Mr Smith says he doubts his company will survive in the medium term.

"It's an interesting experiment - can you have a small Australian company actually viable in the food industry," he said.

"I have a feeling the answer could be no, that you have to be huge or get out, or you can be a little corner shop, but in-between it won't exist."

The committee will report to the Senate by June 30.

Source: ABC News, 11 May 2012