McCains Foods and Simplot have blamed the ever powerful Aussie dollar and the threat of cheap imports for their drop in profits leading to a reduction in renewed supplier contracts and the possible closure of two processing plants respectively.
But is the problem really the fact that we have sold the majority of our major food companies to the foreign entities who make production decisions in boardrooms around the globe?
AUSBUY poses a good argument… Below is a statement they released this morning:
Stop whinging – we have done this to ourselves!!! Simplot (USA) has been a relatively benign foreign investor since it bought many of the brands and factories formerly owned by the Australia Public Company in the mid 1990s (Edgells).
Likewise we thought McCains (Canada) was here to stay. Will they follow the Heinz example to set up in New Zealand and sell back to us? Decisions are now made overseas about the closure of factories.
We have been complicit in the decline of our food manufacturing in Australia. Over the past three decades we have allowed majority control beyond the farm gate of every major food commodity except rice.
The Australian Consumer and Competition Commission has overseen the loss of control to overseas interests and retailers in the name of competitiveness, while our farmers and our local manufacturers are expected to play to a different set of rules to their competitors.
While we claim food manufacturing is the largest manufacturing sector we have remaining, Australia has no major food companies. Decisions about our manufacturing are made in overseas board rooms, not here.
Other countries look after their own. New Zealand has the largest dairy company in the world, Fonterra. New Zealand obtained an amendment under the WTO rules to stop imports which impact their strategic industries. New Zealand stopped the sale of eight dairy farms to the Chinese last year because it did not meet the national interest test.
Its government cannot divest assets which are their for the long term interest of its citizens. Australians have no rights. Countries such as the USA strictly control manufactured goods through labelling law compliance. They decide what products will be sold in the USA.
Despite the warning signs, Australian decision makers turned a blind eye. Foreign investment at any cost has been the call cry! And our people are bearing the consequences! In recent years we have condoned the importation of packaged foods and fresh produce which does not meet our standards.
Dumping is rife! Our labelling laws are inadequate. We have under resourced our gate keepers AQIS, Bio Security Australia and Australian Standards. In recent years, aided by our high A$, our open door policy to imports, and our largess and benevolence to help developing countries, we have imported foods in direct competition with own farmers and their skills. Our borders are not secure. Imports are coming from countries with labels which do not meet our standards, are replacing local producers on the shelf.
The growth of private label among the retailers has also put addition burden on our manufacturers to compete on price with overseas manufacturers if they want to keep their factories operational.
In addition, in recent years we have been net importers of food. While retailers might espouse their support for fresh produce on the shelves, imported foods are being substituted for local produce in many manufactured goods. Made in Australia does not mean it is owned here or sourced here with the current rules of 51% substantial transformation.
The problem in Australia is further exacerbated by the closures in our regional areas where produce is “value added”, creating skilled manufacturing jobs while our farming skills are retained.
The Australian owned businesses who are competing in this environment deserve our support. AUSBUY was prescient in warning of the consequences of loss of control of our wealth creating assets when it formed during the recession we had to have in 1991.
Australia’s challenge in the coming years is to rebuild our nation, get our people working productively for Australia again, and reinvesting in our future. If we cannot find answers to the questions we are asking then ask other questions. The seeds of the future are in those Australian owned companies and our farmers, many of whom have the answers. Are we listening?