Price wars damaging Aussie food production: expert

An expert on food production has told a national conference Australian food processors will not be able to compete with major food retailers.

Speaking at the Crawford Fund Annual Conference at Parliament House in Canberra, Dr David McKinna said the margins of Australian food processors is not enough to support reinvestment required to be able to compete on a global stage.

McKinna, a market trend analyst, said the current dire situation in Australian will continue.

“The tension between major supermarkets is driving massive restructuring of the agrifood supply chain,” he said.

“The turning point in the power shift has been the dramatic weakening of producer brand power.

“Food processors have been wounded by competition from private labels, the inability to reinvest in innovation and branding and being forced to de-engineer products to meet price points.

“Without doubt, global food companies must all be considering closing Australian processing facilities.”

His comments come as Australian factories close their operations at a rapid pace, including the Heinz relocation to New Zealand and the closure of SPC Amatil’s tomato and fruit processing factory in Victoria.

Image: The ABC

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