The essential sector

Knowing that you are able to walk into your local supermarket and buy what you want to feed yourself or your family and stock your pantry is something that we take for granted. Australia is fortunate that we make enough food to feed 75 million people, three times our population and that we have a strong and resilient food, beverage and grocery manufacturing sector in our country.
COVID-19 has taught us all many things about our sense of community, our vulnerability and not to take this $127.1 billion food, beverage and grocery sector for granted. We realise now more than ever how essential it is.
When there was panic buying in early 2020, when shelves were stripped, this was equivalent to three Christmas buying periods all at once, on the same day, with no notice. Retailers and suppliers were caught unprepared, and shelves were emptied.
However, the 274,835 people who work every day to make the food, drinks and grocery items to ensure our shelves are stocked stepped up – they are our essential heroes. This sector went into overdrive straight away to help meet the runaway consumer demand, working 24 hours-a-day, seven-days-a-week to make the products that Australians were wanting. The shelves have not been empty since.
The supply chain was sorely tested. Speciality ingredients not made or found in Australia had to be acquired in other ways, or substitute supplies found, as borders closed.
Movement of goods across such an expansive country is always a challenge but the logistics sector met the challenge to move more products, more often. Workers in the factories, who are the most important asset to our sector, split shifts, implemented COVID-safe plans right away and socially distanced to help ensure transmission of COVID-19 was kept at bay from our essential sector. Everyone met the challenge to keep the supermarket shelves stocked.
Australia’s food, beverage and grocery manufacturing sector works hard, and it has had to. Rising input costs and market challenges have long been an issue for the sector.
Companies in Australia want to invest in capital and invest in more jobs. They want to buy the exceptional, high-quality raw commodities from Australian farmers, transform them into products, and then send them around the country for Australians to enjoy. And they also want to export them around the world, capitalising on the international appreciation for the high quality and safe food products made here.
This is how traditional supply chains work but there needs to be certainty for business to invest. Certainty, through a stable economy, a skilled workforce and access to markets.
There also needs to be a responsive domestic market too, which will help foster innovation and business growth. As the world modernises and becomes highly automated, this sector strives to do so as well. This will help ensure the sector remains competitive on the world stage, innovation will flourish and jobs will grow.
To do this, the Australian Food and Grocery Council has called for the Federal Government to implement a Food, Beverage and Grocery Site Modernisation Program that provides short-term incentives for the food, beverage and grocery manufacturing industry. It does so by bringing forward investment in manufacturing plant infrastructure and equipment through an instant asset write off, or grants program for smaller investments, and targeted and efficient investment allowance for larger investments.
Without investing to improve efficiency and innovate, there is a real risk that businesses will either need to reduce the scale of their operations or move offshore.
Taking the jobs offshore would result in job losses at a time when we need to ensure job growth. While nearly 60 per cent of the sector’s jobs are in metropolitan areas, around 40 per cent, or 108,000 jobs, depend directly on this sector in regional Australia.
This sector is the backbone to regional Australia and the bond in so many communities – it is the heart of the community. The jobs and support services in so many country towns and regional centres rely on the economic contribution the sector brings through the wages it pays and the flow on to other businesses servicing the sector or the people who work in it.
In turn, the sector also supports the community through social, environmental and other outreach programs and direct contributions. This might include supporting the construction of local assets being built like a swimming pool, donating to local soup kitchens or getting involved in environmental programs like tree planting. This is happening right across the country with the support of this sector.
At the same time as strengthening our local economies and communities, the sector has seen a growth in exports. In 2020, food and beverage exports have increased 5.8 per cent, led by 7 per cent year-on-year increase in food product manufacturing.
Supply chain dependencies and priorities within countries changed with COVID-19 but recent Australian Bureau of Statistics data proved that COVID-19 hasn’t destroyed
our global trade. So, the trajectory of a growing and strong export market should weather the pandemic, even though it has definitely complicated things due to geopolitical developments.
A strong international trade system is crucial to maintaining global food security while Australia can benefit through local economic stimuli. Trade helps to stabilise food prices and supply volumes, which in turn improves social stability across the globe. During the 2007-08 food price crisis, restrictions by countries on exports of certain commodities led to significant increases in world food prices and intensified the impact on food insecurity and poverty. To date, we have not seen a repeat of this food price crisis and trade flows have continued, albeit with some delays at the start of the COVID-19 pandemic.
While we like to know that we can walk into our supermarket and buy what we want on nearly every occasion, we also need to stop and realise what goes into ensuring we can do just that. Australians should be proud of the food, grocery and manufacturing sector here on our shores, for what it makes, supplies us with and the value it brings to our local economy and communities.