National bakery chain, Brumby’s, has issues an apology, after internal documents were leaked to the media, showing the company instructed outlets to significantly raise prices of products and blame the carbon tax.
''We are doing an RRP [recommended retail price] review at present which is projected to be in line with CPI [consumer price index], but take the opportunity to make some moves in June and July,'' Brumby's managing director, Deane Priest, wrote to franchisees in the company’s internal publication, Backmix.
''Let the carbon tax take the blame, after all, your costs will be going up due to it.''
The federal government has slammed the ''reprehensible'' behaviour, while the Australian Competition and Consumer Commission (ACCC) has launched an investigation over the comments in the memorandum to staff.
Brumby’s parent company, Retail Food Group, has taken full responsibility for the comments and apologised in a statement to the Australian Stock Exchange (ASX), saying the advice should not have been issued and that it was not representative of the company's policies or practices.
''We therefore express our genuine regret over this isolated incident and unreservedly apologise for this unacceptable error of judgment,'' it said.
While the Gillard government has slammed the comments, the Opposition Leader, Tony Abbott said they was understandable.
''I can fully understand why every single business in this country is looking at its costs and thinking of how much its prices have got to go up, because that's what the carbon tax is going to do to them,'' he said.
The ACCC has pledged to catch any others doing the same, after it was given more power to issue fines to companies and individuals misleading others about the price impact of the tax.
Some food and beverage manufacturers have criticised the tax, saying the impact on their businesses will be significant, while others have been implementing changes to cope.
In April Bundaberg Sugar revealed it has invested $40 million on upgrading a mill in southern Queensland to avoid increases in financial payments when the carbon tax is officially introduced.
“Probably the biggest improvement is that the lower moisture bagasse means that the boilers burn more efficiently, which means there's les CO2 into the atmosphere and also less emissions generally from the boiler stacks," general manager David Pickering said.
"The carbon tax is coming in from the first of July, so we want to make sure that we're operating below the threshold.
“This will allow us to produce more bagasse, which is a renewable energy, rather than coal.
"That means that we, in the marketplace, can remain competitive with our product."
Australian Dairy Farmers Association president Chris Griffin told Food Magazine in February the that the dairy industry is not only losing workers, but will be further damaged by the carbon tax and Murray-Darling Basin plan.
“The carbon tax will also cause problems when it’s implemented on the 1st of July; we’ve done work to find the costs that will be incurred and they are largely electrical costs,” he said.
“The average increase for dairy operation will be between $5000- $7000, and that will be an overall direct increase in cost that will have to be passed on somewhere.”
The cost increase cause by the carbon tax will have to be absorbed by the farmers in the milk export market, Griffin told Food Magazine.
“It will have to be absorbed by the farmer because our price is governed by a royal export set price.
“Australia has come out ahead of the game in a way with implementing the carbon tax, but farmers can’t go to their overseas customers and saying ‘we need extra money because Julia has put on a carbon tax,’ the customers would just go elsewhere.”
The carbon price will be fixed at $23 a tonne for its first three years, and applies to the 294 heaviest polluters in Australia.
The tax has been heavily scrutinised since it was first suggested, with opponents predicting a rise in living costs, as the expenses trickle down the supply chain.
Prime Minister Julia Gillard has also copped immense criticism for introducing the tax, despite an earlier election promise that no such tax would be introduced under her leadership.