Australian Food Manufacturing Sector Co-Signs Carbon Letter To Prime Minister

by Mary Swire, Tax-News.com, Hong Kong

27 April 2011

Nineteen leading food and grocery manufacturers, including Yakult and Nestle, and the Australian Food and Grocery Council (AFGC) have co-signed a joint industry letter to the Australian Prime Minister raising concerns about the proposed carbon pricing scheme.

The letter – signed by manufacturing organizations and industry groups from export and import-competitive sectors – calls on Julia Gillard to confirm that the Government will ensure Australia’s trade-exposed sector will not be unfairly disadvantaged by a carbon tax.

AFGC Chief Executive Kate Carnell said: “As an industry we don’t oppose a price on carbon – but the industry is opposed to a tax that will increase the cost of food and grocery manufacturing in Australia, which is already under intense pressure. Imported products will not be affected by the carbon tax.

“These products are already relatively cheaper as a result of the high Australian dollar – so the proposed carbon tax will just make Australian products less competitive and that will cost jobs.

“Whatever decision is made, the Government must ensure that Australian-manufactured food and groceries will not be made less competitive as a result of the carbon tax.

She said that the food manufacturing industry is already under 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, and this is seriously impacting margins.

“If a carbon tax puts Australian manufacturing at a disadvantage, it will ultimately result in exporting Australian manufacturing jobs and exporting emissions.”

Ms Karnell said that the compensation package announced earlier by Climate Change Minister Greg Combet would not encourage people to buy Australian-made food and groceries which will be made less competitive as a result of the carbon tax.

Food and grocery is Australia’s largest manufacturing sector, worth more than AUD102bn annually and accounts for 9% of Australia’s international trade valued at AUD449bn in 2008-09.

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