Carbon tax impacts food and grocery costs, says Australian council

Carbon tax still impacts Australian food and grocery costs

The Federal Government's carbon pricing package will affect costs of food and grocery manufacturing right through the supply chain, the Australian Food and Grocery Council (AFGC) said on July 10, 2011.

AFGC chief executive Kate Carnell said there is no doubt that costs will increase right across Australia's supply chain, predominantly due to the increased costs of power.

"The Government carbon tax will increase the cost of Australian manufactured goods - but will not affect imports, which are already cheaper due to the high Australian dollar," she said.

"AFGC is perplexed by Treasury figures announced today by the prime minister, regarding the price rises of food and grocery products on supermarket shelves. The Treasury modeling appears not has been released - we urge them to release these figures."

Carnell welcomed transport fuel being excluded from the tax until 2014, which will help offset supply chain costs for heavy on-road vehicles in transporting food and groceries.

"However this is only a short-term measure and after three-years, industry can expect to pay."

The food and beverage industry also welcomed the Clean Technology Food and Foundries Investment Program - which provides A$150 million (US$160.257 million) over six years in assistance to industry to become more energy efficient.

Carnell said AFGC lobbied the Government to increase the $150 million package that was also part of the CPRS, as we believed it would not be sufficient for a $102 billion industry, which is already investing heavily in technology to reduce environmental impact.

Under this program, funding will be provided on a co-investment basis, with industry contributing three dollars for every dollar from the government.

"This could make it difficult for smaller manufacturers as the cost of becoming more energy efficient are often very high."