CoOL changes “a step closer” to recognising industry concerns: Ai Group

The Australian Industry Group (Ai Group) has welcomed the retention of the “Made in Australia” claim, but said “cost will still be a significant factor.”

“Changes flagged by the Government to country of origin labelling on foods are a step closer to recognising consumer and industry concerns,” said Australian Industry Group (Ai Group) Confectionery Sector Head, Tim Piper.

The government approved the new labelling system last week, and there will be an initial voluntary take-up of the country of origin food labels will see changes appear on the shelves later this year.

Overall, the response to the announcement has been positive, but a few have expressed some concerns. Consumer advocacy group CHOICE says the new system looks less useful for consumers wanting information about any of the 195 countries that are not Australia.

Tim Piper says “while a good deal of detail remains to be considered, industry expects to work with the Government as the process evolves and to ensure it can comply.

“Cost will still be a significant factor, but the new rules must be easy to implement.

“Encouragingly, retention of the term ‘Made in Australia’ is a significant element of the proposal that is welcomed by the confectionery industry.

“While not all foods require the new graphic initially, those that will have to comply have some choice on the placement, size, layout and colour.

“The Ai Group Confectionery Sector will continue to work with the Government to ensure the industry’s views are recognised,” Piper said


Food bucks the trend: manufacturing drops in August

Food and beverage was one of only two manufacturing sub-sectors to expand in August, according to the latest Australian Industry Group (AiG) Performance of Manufacturing Index (PMI).

Food and beverage and smaller wood and paper products were the only two out of the eight manufacturing sub-indices to expand in August, SMH reports, with the rest of the industry contracting when compared to July.

The top-line index figure dropped 3.4 points to 47.3, and the three month moving average also dropped to 48.9, where a reading of less than 50 represents industry contraction.

All levels of manufacturing, including production, new orders, sales, employment and supplies all contracted, with the high Australian dollar refusing to relent.

"While exports lifted in August, many respondents expressed ongoing concern about the persistent strength of the Australian dollar, which is maintaining the intensity of import competition," Australian Industry Group chief executive, Innes Willox, said.

An increase in import competition and a reduction in engineering construction were also listed as key contributors to the industry’s contraction in August.

AFGC welcomes review of competition law

Peak industry group for the grocery sector, the Australian Food and Grocery Council (AFGC) has welcomed an announcement from the minister for small business, Bruce Billson, on the government’s review of competition law.

The ‘root and branch’ review panel will be chaired by Professor Ian Harper, and comprising Peter Anderson, Su McCluskey and Michael O’Bryan SC, all of which have extensive industry experience and expertise.

The AFGC’s CEO, Gary Dawson said that the competition review represented one of the most significant reviews in a generation in terms of its potential impact of the Australian food and grocery sector. 

“The food and grocery sector is an extremely competitive, dynamic and critical sector… It is also a sector where issues have arisen in relation to market power imbalance, vertical integration and excessive regulation, all of which are within the ambit of the ‘root and branch’ review," said Dawson.

“Competition policy remains a crucial element of the regulatory setting across the supply chain and greatly impacts decisions on investment and employment that shape the direction of food and grocery manufacturing sector.”

Dawson says that the Food and Grocery Industry Code of Conduct – which was developed and agreed to by the AFGC, Coles and Woolworths late last year – is consistent with the direction of the ‘root and branch’ review.

“(The code) was aimed at improving the operation of our competitive market by increasing transparency and certainty for supermarket suppliers, and explicitly prohibiting a number of anti-competitive behaviours,” said Dawson.

“The Code… will be progressed in tandem through the government’s regulatory review process this year with a view to it being tabled as a prescribed code under the Competition and Consumer Act.

“The Food and Grocery Code establishes a clear set of principles relating to key aspects of trading relationships between retailers and suppliers and will provide greater certainty and clarity about dealings in the industry without adding complexity or cost in a fast moving consumer goods sector.

“We look forward to seeing both the industry code of conduct and the outcomes of the competition law review work together to strengthen the food and grocery sector.”


Manufacturing still in negative territory: PMI

The Australian Industry Group Performance of Manufacturing Index recorded a score of 43.8 for May, an improvement on the previous month but continuing the industry’s contraction for the 23rd straight month.

The PMI is a seasonally-adjusted national composite index based on survey results from more than 200 companies. A score of 50 is the line separating contraction and expansion.

The May PMI saw no sub-sectors and no states record growth.

"The Australian PMI recovered somewhat in May from the plunge in April, but the overall landscape across manufacturing is still one of contraction,” said Ai Group CEO Innes Willox in a statement.  

“The welcome drop in the Australian dollar in recent weeks will provide breathing space for many exporters and will help lift confidence. However, the dollar remains well above its post-float average and there will need to be sustained falls if we are to see a real impact on import-competing manufacturers and exporters.”

Bright spots included an improvement on April’s score of 36.7 and increases in the new orders (by 9.9 points to 42.3) and production up 13 points to 46.1.

“Manufacturers are telling us that despite the latest cut to official interest rates, weak demand from businesses and consumers remains all too evident,” said Willox.

"This caution is to a degree being influenced by the prelude to the federal election which is generally a period when consumers and business keep their hands in the pockets.”