Food manufacturing in Australia could disappear unless it has support from retailers, consumers and the Federal Government.
Coca Cola warns on food manufacturing
That's the warning from Coca-Cola Amatil, which owns the SPC Ardmona fruit and vegetable-processing business in addition to its extensive portfolio of soft drinks and fruit juices.
CCA chief executive Terry Davis said food manufacturers were facing tough conditions because of the strong Australian dollar and high labour costs.
Australian consumers and retailers must be prepared to support local producers or they would be forced out of business, leading to job losses and downturns in local economies, he said.
"Many of these come from countries that do not have the same stringent quality standards or the same favourable labour conditions as Australia," Mr Davis told shareholders at CCA's annual general meeting in Sydney.
"The flow-on effect to local communities and regional employment is devastating.
"My personal view is that, ultimately, Australian consumers and, in turn, major Australian retailers will have to make a choice: lift their support for domestically produced brands or support imported private-label products and face the consequence of having a diminished Australian food industry."
Mr Davis said the carbon tax would not have a significant effect on CCA because none of its manufacturing facilities meet the minimum threshold to be taxed directly.
He said it could have more of an effect on its suppliers and customers.
"The input we have with our aluminium cans and transport costs adds about $5 million to $6 million to our costs next year, so in a nearly $5 billion business it's not significant," Mr Davis told reporters after the meeting.
"Where the issues will remain is what impact will it have on our customers and what other impact will it have down the supply chain?
"Practically, we won't really know that impact will be until further down the track."
Mr Davis called on the Federal Government to level the playing field for local producers and bring forward tax incentives, similarly to when the GST started, for non mining manufacturing, such as accelerated depreciation.
He also said the Government could assist local manufacturers by cutting payroll tax and removing the $1000 threshold on GST on products purchased online outside of Australia.
"My personal view, and this doesn't impact on CCA, is why have we got a $1000 GST-free for products purchased online outside Australia when Australian retailers and manufacturers have to bear a 10 per cent GST?" he said.
"Notwithstanding that, it may not make the Australian Government any money, all we look for is a level playing field."
CCA chief executive Terry Davis said food manufacturers were facing tough conditions because of the strong Australian dollar and high labour costs.
Australian consumers and retailers must be prepared to support local producers or they would be forced out of business, leading to job losses and downturns in local economies, he said.
"Many of these come from countries that do not have the same stringent quality standards or the same favourable labour conditions as Australia," Mr Davis told shareholders at CCA's annual general meeting in Sydney.
"The flow-on effect to local communities and regional employment is devastating.
"My personal view is that, ultimately, Australian consumers and, in turn, major Australian retailers will have to make a choice: lift their support for domestically produced brands or support imported private-label products and face the consequence of having a diminished Australian food industry."
Mr Davis said the carbon tax would not have a significant effect on CCA because none of its manufacturing facilities meet the minimum threshold to be taxed directly.
He said it could have more of an effect on its suppliers and customers.
"The input we have with our aluminium cans and transport costs adds about $5 million to $6 million to our costs next year, so in a nearly $5 billion business it's not significant," Mr Davis told reporters after the meeting.
"Where the issues will remain is what impact will it have on our customers and what other impact will it have down the supply chain?
"Practically, we won't really know that impact will be until further down the track."
Mr Davis called on the Federal Government to level the playing field for local producers and bring forward tax incentives, similarly to when the GST started, for non mining manufacturing, such as accelerated depreciation.
He also said the Government could assist local manufacturers by cutting payroll tax and removing the $1000 threshold on GST on products purchased online outside of Australia.
"My personal view, and this doesn't impact on CCA, is why have we got a $1000 GST-free for products purchased online outside Australia when Australian retailers and manufacturers have to bear a 10 per cent GST?" he said.
"Notwithstanding that, it may not make the Australian Government any money, all we look for is a level playing field."
Source: AAP, 16 May 2012
