The free trade agreements with Japan and Korea will make Australian food and beverage businesses more attractive to foreign investors, but businesses must understand the new markets, said Tony Pititto, Food & Beverage Industry growth adviser, Grant Thornton Australia.
Pititto said mid-sized businesses in the sector will become attractive to foreign investors who can provide the industry with much needed capital to facilitate further growth.
Pititto said the industry must be aware of key considerations and risks to ensure local food and beverage businesses are best positioned to maximise growth opportunities before they invest in expansion.
“Product innovation and investment in infrastructure and new technology will be key to facilitating the growth opportunities for our local food and beverage businesses provided by the new free trade agreements with Japan and Korea,” Pititto said. “Our local businesses need to understand their customers in these new markets and invest in product innovation to meet their needs. If they fail to innovate, they won’t be well positioned to successfully grow in these new markets.”
Pititto said that the federal government can help the growth in product sales from exports by providing Australian companies with the “right tax incentives to increase the level of product development and innovation” in the upcoming federal budget.
The Japan FTA will help grocery and beef industries, but has received criticism from the Dairy Industry Council, which stated the agreement has fallen well below industry expectation.
ADIC deputy chairman, Robert Poole said that the agreement provided ‘no meaningful benefit’ to the Australian dairy industry.
“We are extremely disappointed with the deal announced this evening by the Prime Minister,” said Poole. “We were hopeful government had heeded the industry’s message in regards to freeing up market access in Japan, however it now appears our words fell upon deaf ears."