With Australia’s food and grocery sector now worth $163 billion, up 11.6 per cent in 2022/23, the Australian Food and Grocery Council (AFGC) is calling on the federal government to include the country’s largest manufacturing sector in its Future Made in Australia policy.
![Australian Food & Grocery Council, State of Industry report 2022/23. (Source: AFGC)](http://yaffa-cdn.s3.amazonaws.com/yaffadsp/images/dmImage/SourceImage/state-of-industry-22-23-graphic1.jpg)
State of Industry report 2022/23.
(Source: AFGC)
AFGC CEO, Tanya Barden, said the council’s latest State of Industry (SoI) report found a rise in many wholesale prices for the first time in a decade.
“Our industry is a cornerstone of the Australian economy, providing essential goods and employment for more than 280,000 Australians. Recent and ongoing global supply chain disruptions have made our industry even more critical from a national resilience perspective.
“The Future Made in Australia policy is a critical lever at government’s disposal to keep jobs and production in Australia’s largest manufacturing sector at home. We urge the government to back this key industry by implementing tax incentives for food and grocery manufacturing to be globally competitive, contributing to Australia’s economic prosperity, as well as net zero transition.
“Australia’s largest manufacturing sector should be a significant part of the Future Made in Australia policy, which has been described as the biggest pro-manufacturing package in Australian history,” Barden said.
While there was higher top line growth, operating profit fell by seven per cent to $7.2 billion due to persistent cost pressures from commodities, energy, and shipping rising faster than wholesale prices.
Employment was up by 4.1 per cent to just over 280,000 people and 37 per cent of those jobs in regional areas.
The SoI found the federal government’s temporary full expensing tax measure was a successful incentive to boost capital investment. In 2022/23, it rose 24.5 per cent to $4.2 billion, with most directed at plant and equipment upgrades. Automation was a major contributor as businesses tried to counter labour shortages and improve efficiency.
Key sectors making significant investments were meat processing, grain processing, dairy, and fruit and vegetable sectors.
But more needs to be done for the industry to recover from Covid, recent economic issues, and more than a decade before that of little investment in the sector.
Barden said there needed to be a significant lift in investment if the industry was going to adapt to clean energy and circular economy transitions and adopt the digital technologies needed to maintain global competitiveness.
“Suppliers are hampered by a decline in profitability and given cost of living pressures, it is becoming more difficult for the industry to recover costs such as large increases in energy, labour, transport and warehousing, and insurance,” she said.
The State of the Industry results highlight that without strategic intervention, there is a risk of Australian made products being produced elsewhere in markets that are increasingly offering significant investment attraction incentives. The AFGC calls for continued collaboration with government to unlock the potential of the food and grocery manufacturing industry, which is poised to be a winner if we implement the right settings.
![In this episode, Food & Drink Business editor Kim Berry is joined by Australian Food & Grocery Council (AFGC) CEO, Tanya Barden, to discuss the current state of play for Australia’s food and grocery sector.](http://yaffa-cdn.s3.amazonaws.com/yaffadsp/images/dmImage/StandardImage/15919-fdb-podcast-edm-02.jpg)
Listen to the Food & Drink Business Podcast episode with AFGC CEO Tanya Barden, recorded in June 2024.