Woolworths is the latest food producer to send its operations abroad, as the cost of doing business in Australia continued to increase as the dollar does.
The high cost of manufacturing in Australia has been blamed for several food companies, including Heinz, sending jobs offshore – mostly to New Zealand.
The supermarket giant transferred 40 contact centre jobs to Auckland this week and it will be quickly followed by Imperial Tobacco, which announced it would be relocating its cigarette manufacturing across the Tasman also.
The combination of the high Australian dollar, increases to wages and the supermarket price wars are making it very difficult for food manufacturers to stay afloat.
According to the International Labour Organisation, Australian manufacturing workers earned more than $US35 an hour in 2008, compared to less than $US20 an hour in New Zealand.
Australian manufacturing workers also earn more, on avjeerage, that those in the UK, US and Canada.
In 2010, McCain relocated its vegetable production to New Zealand, leaving Simplot Australia as the largest vegetable producer in Tasmania.
Last year, Foster’s controversially accepted a takeover bid by London-based SABMiller, making Coopers the biggest local brewer, a reputation the company has pledged to maintain.
While the wages in the manufacturing sector are better here than abroad, they still struggle to compare to the high-paying mining jobs, which are seeing countless Australians leave farming and manufacturing jobs behind and relocating to mining towns.
The average age of an Australian farmer is over 60 and a recent study found 75 per cent of Australian year six students think cotton socks are an animal product while others believe yoghurt grows on trees.
Earlier this week, dairy farming was rated the second worst job in the world, based on earning ability, hiring outlook, work environment and physical demands.
”Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you’re unable to properly plan,” Callum Elder, the executive general manager of quality and innovation at Simplot, told the Sydney Morning Herald.
”Our productivity hasn’t increased in the past three to four years, as an industry, but yet we’ve been paying 3 to 4 per cent increases [in wages], which is a large part of the cost.
“It’s very expensive to put people into Australian factories.”