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Select Committee on Australia's Food Processing Sector - 09/03/2012 - Australia's food processing sector

BUSH, Mr Peter Bernard, Executive Officer, Food Technology Association of Australia

Committee met at 09:50

CHAIR ( Senator Colbeck ): I declare open this public hearing of the Senate Select Committee on Australia's Food Processing Sector. The committee's proceedings today will follow the program as circulated. These are public proceedings, although the committee may determine or agree to a request to have evidence heard in camera. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as contempt. It also a contempt to give false or misleading evidence to a committee. If a witness objects to answering a question the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may be taken at any other time.

Welcome, Mr Bush. We have your submission, which is No. 16. I invite you to make any amendments to your submission and/or to make a short opening statement.

Mr Bush : I do not wish to make any changes to the submission but I would like to make an opening statement if I may. We thank you for the opportunity to appear before the committee to answer questions on our submission. The Food Technology Association of Australia has 75 company members nationally, primarily in Victoria New South Wales, and these members range in size from one person consultancies through to multinational companies. We have recently ascertained that of the 105 primary members of the AFGC—excluding affiliate members, that is—20 are also members of FTAA. I am happy to read them but I would rather they not be recorded if the chair so wishes. Would you like to hear them briefly?

CHAIR: Are you talking about the ones that are members of both?

Mr Bush : Yes, there is often a lot of confusion between what the AFGC does and what the FTAA does.

CHAIR: If you think it is important to put on the record, we are happy to hear that.

Mr Bush : Could I mention them but not record them? Is that is possible?

CHAIR: If you mention them they will be in Hansard. If you do not want them on the public record then do not say anything.

Mr Bush : Okay. FTAA is primarily a technical organisation which has, as its pillars of membership: networking; education; communication and information; and technical functions via its technical committee. Our submission is directed at three areas only: global competitiveness because it affects all companies in one way or another; labelling, as many members and their delegates are responsible for product specifications and labelling; and education, primarily tertiary education in food science and technology. However, having read the proof committee Hansard from the 13 December and also from the 10 February hearings, it has become clear to me that the FTAA submission on global competitiveness summarises input on the situation rather quotes facts. We will willingly answer questions and we would like to table suggestions. However, since our submission in October and particularly in the last week, there have been four examples of competitiveness issues that somewhat change our views. These include the closure of Heinz Girgarre, which essentially is a local cost structure; the closure of Unibic, which is hopefully going to be repurchased, which has direct implications in terms of house brand imports; and, thirdly and fourthly, press statements in December from Lion and Coke, both of whom have given evidence of the pressure from Coles and Woolworths slowing their business, which state figures in terms of a reduction of turnover in the billions of dollars. Thus, our comments and suggestions will be categorised into three areas: the high cost of Australian manufacture; imported food product substitution; and supermarket/company supply price point demands.

Similarly, under the labelling section, we have interpreted the requirements as laid down by the Food Standards Code, the overall guidelines by the ACCC and the trades measurement as all of our member company representatives are involved with these on a daily basis. As technical people, we believe that the current labelling is comprehensive, informative and provides the consumer with more than adequate information to make purchasing decisions. We would be pleased to make comment on nutritional labelling and the ever-developing feelgood labelling that has possibly undermined the required information—for example, traffic lights, thumbnail, organic, biodynamic, free range, no added hormones, free trade, heart tick and, of course, Australian made—as well as the part labelling can play in the fight to overcome obesity.

Finally, it is pleasing to see the wide range of witnesses from the food processing industry, all with their own interpretation of what is happening in the industry. However, it also goes to prove that no one body or organisation actually represents the food processing industry; rather, there is a range of organisations which represent certain sections of the industry—such as wine, pork, beef, soft drinks, general grocery manufacturers, farmers' groups, bakery and confectionery—all of which make up the total picture.

In addition, I would like to enter in terms of evidence as a reference point some interesting reading—a book by Keith Farrer. Food Technology and CSIRO Publishing assisted in the publication costs of this book. It is a history of Australian food science and technology. It outlines the important part Australian food science and technology plays in the development of the industry. Thank you.

CHAIR: Thank you, Mr Bush. I heard some rumblings along the table here when you were talking about food labelling, and I suspect my first question may lead to some more. You talk about the potential for other label classifications, other label types, being added to the existing labelling that is determined under the legislation and regulations. You say that they are undermining the value of those. But could it not be said that these other proposals are being brought out because people do not have a strong understanding of what the prescribed labelling requirements actually mean? I am looking specifically at the food health side of labelling. You have spoken about traffic lights and things of that nature, and I know there is a variance of views on that. Aren't they being promoted because of a lack of understanding in the broader community about what the fundamentals of the health labelling requirements actually mean?

Mr Bush : Possibly. But, in trying to fix the problem of a lack of understanding, the way to go about it is to try and educate the consumer, from the cradle through to death, in terms of what they mean. By adding what are essentially pictorial instances, the concern we have is that it will become more confusing. It is very much like saying, per the legislation, what the kilojoule figure is per 100 grams and per serving. If you do not understand that—and a lot of consumers do not understand it—then saying it in a different way which could potentially be confusing does not help whatsoever. If people do not understand the basic principles, the aim should be to try to educate them about those basic principles, which a lot of state governments are doing by declaring the average kilojoule intake is 8,700. That is fine but a lot of people generally do not understand what a kilojoule is.

CHAIR: I think that is a fair point. What about the fact that for a lot of these things you have to buy your way in, such as with the Heart Foundation tick? It is something that you purchase and therefore you are relying on the efficacy of that process. I am not questioning the efficacy of that process; I am just saying that that is the way that works. Which in particular of these pictorials might you take notice of? What you are saying is that that actually undermines the process of understanding properly what the raw data in the health panel says, with people relying on a quick visual indicator rather than something that actually tells them what the reality of the content is.

Mr Bush : Yes, and it is about the interpretation of that visual data. My understanding of the Heart Foundation tick, which is a typical example, is that there was one fast food chain which actually got the tick for a meal. I will not say who it was, but they got the tick for a meal. In essence, the criteria used for the tick was potentially the level of salt and saturated fat. You can have a meal of salt and saturated fat but what the consumer does not understand is the fact that our obesity problem is not about saturated fat or transfats; it is about kilojoules. At the end of the day, we are in a situation where we are suffering from overnutrition generally rather than undernutrition. The emphasis has been on all of these little areas that the consumer does not understand and that in some cases is geared towards a small section of the population—that is, the intake of salt. We should be concentrating, if obesity is a problem, on kilojoules as phase 1.

I must also say that a certain chain, who I will not name but who are in many areas and who are probably our second biggest chain and have a big yellow sign outside their doors, have taken an amazing step on the situation of kilojoules. If you go into that store today, right in front of you on every single menu item is its kilojoule contents. So if you want a milkshake there is a kilojoule content listed on that. If you want a big burger and chips and a Coke, there is a kilojoule content listed. This is an amazing move towards telling the public exactly what the kilojoule content is of a portion, in my opinion.

CHAIR: I just want to move off that, although there may be some who want to come back to it. I want to go back to the skills and training that you mentioned. I appreciate that you have tabled the book that has been published. I am really curious to know how you see the integration of the overall education system towards food and food production and where there might be some improvements that could be made to that.

Mr Bush : We did circulate the survey undertaken by Allens Consulting and out of that came the fact that, firstly, the industry was short of graduates of food science and technology and, secondly, they did not have the basic skills to address that issue. This has happened for a variety of reasons. I think one senator said in Hansard that they did believe that the food industry was sexy. It is not. Generally, we have moved away from it. If you go round the average factory, be it a milk factory, a canning factory or an abattoir, you will see it is not sexy. We have seen the trends move away from the sciences in secondary education. We have allowed it to fade over many years and to reverse that is very difficult.

So, as a combination of scenarios, we have less and less local secondary education, fewer young adults wanting to take on science roles. Because food science and technology is almost at the bottom level, with engineering and things like that at the top, it is very difficult to attract students of food science and technology, which has now changed to food science and nutrition. The courses have changed. Even young people feel that food science and technology is not sexy but food science and nutrition is. So the courses have been changed in their content. Firstly, they have gone from four years to three years. Secondly, they have reduced the amount of food and food related topics and increased human nutrition and nutrition topics in general.

Some universities have been very successful in riding on the back of the food industry and attracting students. So, as you can see, there are still a lot of students being produced, but they have no real skill base to enter food processing, product development, quality control or legislative areas, which have been the traditional areas. So to answer your question, Mr Chairman, the study has progressed to a food science and technology working group, which has representation from industry, the Australian Industry Group, CSIRO, AgriFood Skills Australia and those in Dairy Australia. Dairy Australia has been particularly proactive in its school programs. That group met about three months after the study and it developed two subgroups, one to look at secondary education and one to look at tertiary education. We are just at the process of remeeting, because we have both done studies, and we believe that the answer will be to start as Dairy Australia has done, as PICSE has done, to look at developing food topics within the curricula. Both New South Wales and Victoria have either food studies or food technology but, unfortunately, in general it is still at the domestic science level, which does not do the industry any good. In fact, it goes against the whole concept of it being a science and it is a science.

We believe that we need direct schools. We have had discussions with PICSE at great length and almost got over the line of Ballarat University but, because of funding, that actually fell through. So we do not currently have that as one option. Secondly, on the university side, there are 11 universities doing food science and nutrition within Australia, which is a large number. Unfortunately, universities do not like giving out information, but we are very, very lucky that each of those 11 universities confided in us with a little bit of cajoling—because I am a food technologist and relatively well known in the industry and to the universities—and we have from them their actual intake last year and their expected intake this year, and also the syllabus. That we have obviously shared confidentially and I have given them the undertaking that that will not be circulated. We have then compared that with a standard curriculum which has been issued by the Institute of Food Science and Technology in the USA. So they have it pinpointed. We have been rated each of those 11 syllabi with the IFT guidelines and we came out with five of them being relatively close and two of them very close. We are now in the situation at the next meeting where we are looking at talking to those two universities—and both have said that they will cooperate with industry—in terms of developing programs with them to increase or maintain the science and to increase quality local graduates in them. That is the stage that we are at and none of that is, in fact, published as yet.

CHAIR: With respect to Primary Industries Education Foundation, have you engaged them as part of curricula tool development process?

Mr Bush : No.

CHAIR: That is an organisation that I am aware of and have spoken to on a couple of occasions. One of the roles that they are taking is identifying curriculum materials for use right through from K to 12. I think that they have identified about a thousand pieces and listed about 150 or 200 on their website at the moment. Again, resources is an issue for them. They are another group that is doing very similar work, working closely with PICSE.

Mr Bush : We will certainly take that into account. We are fortunate that a lot of the material that is available coming out of the US has been made available to us, in fact, in formats here directly related to secondary schools.

CHAIR: In your engagement with PICSE, have you actually run any programs in conjunction with industry that are providing that practical opportunity for experience through a PICSE type program?

Mr Bush : No.

CHAIR: You haven't yet?

Mr Bush : Not yet.

Senator EDWARDS: Continuing with the theme of education, since the Commonwealth introduced supported studies, has that made any difference in the tertiary sector with the lessening of the burden with HECS and so on? Have you seen an influx? Ian Chubb is out there saying that 14 per cent of children are doing science in high school now, which is a tremendous drop from 20 years ago. The Commonwealth government is introducing various initiatives. You are saying that the industry is not sexy enough and not profitable enough. If you are a kid from Shepparton or the Goulburn Valley and you want to go into food science, you pick up the paper this week and you see all the closures and everything like that. What are we going to do? How are we going to stem the flow? How are we going to stem the tide? Effectively, this is your charter, isn't it?

Mr Bush : It is now and it does have a lot of history behind it. To answer your original question, I do not think that I am in a position to say whether it has made any difference, because of two factors. The first factor is that, as with many of our universities, the percentage of international students, which can be said to be anywhere between 40 and 60 per cent within food science and technology, has increased over the years in those courses. Also, it is probably true—this is the comment but it is probably true—that, if international food science and technology students were taken away, potentially 90 per cent of those courses would not be offered. So there is a reliance on international students.

The negative part of that is that we say, 'Okay, international students are going to come, be educated in Australia and then head home,' but that has not been the case in the last decade. The government has made it quite easy with working students, even 457 visas et cetera, and we find ourselves today with the situation where many of the students who came want to stay and many of them still want to work here in Australia. We may well have made that easy for them. Secondly, in terms of our immigration policy of going for qualified persons, we find within the industry now the developing lower strata or entry level is heavily made up of immigrant—if that is the word—food science technologists, very well qualified, particularly from New Zealand, the Subcontinent, South Africa, Ireland and, as is developing now, Thailand and China.

Senator EDWARDS: The Chief Scientist is saying 14 per cent of our kids are doing science in high schools. You are saying—I am just getting a theme here—it will be okay because the overseas students are going to provide our intellect bank for our food processing sector for the future because that is what is actually evolving: we are educating people from overseas, not our children, in our universities and they have been and are filling and will fill those roles.

Mr Bush : That is a possibility, yes. I will add one more thing that we did do. We applied to the Victorian government two years ago for an education grant which would allow us to do in-plant visits from the five main universities that are based in Victoria. If you talk to any academic, in all universities, you find they have all got a huge disconnect with the industry. Why, I do not know. There has been a change in personnel, and professors of food science and technology do not have good contacts with industry in general.

We had a grant for five factory visits. The first one was exceptionally successful and was published. It was with RMIT. We came up here and went to Simplot and Riverland Oilseeds. We had the whole situation set up for the two-day visit. From memory, there were 28 students and 25 of them were international students. I did a survey in the bus coming out of Melbourne, asking them: 'Would you consider working in rural Victoria? If not, why not?' I did the same survey when we were driving back into Melbourne, using the same piece of paper and telling them not to look at the first side. There was a 90 per cent change: of those students, even international ones, who had said no, they were not going to work in rural Victoria, 90 per cent said on the way back that, yes, they would. They had never been to rural Victoria, they had never seen Shepparton, they had never seen a plant et cetera. It was great.

Unfortunately, for the other four visits we had to refund the money because they failed. They did not want to do it during their own time and they did not want to pay for their accommodation. Secondly—and Ballarat was a typical example—although we tried twice they just could not get the support to do it.

Senator EDWARDS: So your contention is that part of the disconnect belongs with the industry—to involve people at an earlier stage to get them in there?

Mr Bush : Correct.

Senator EDWARDS: Yours is a very blunt example of the industry not communicating the career prospects.

Mr Bush : Correct. Again, the Victorian government produced excellent paperwork about five years ago—I do not have it with me—on developing the food industry right across the spectrum, not only in terms of food processing but also in terms of distribution, finance, economics et cetera. But, again, it was very difficult. I think one needs to understand, as well that the pressures that the industry has been under, particularly over the last decade—in terms of headcount, costs and competitiveness et cetera—have meant that there are very few companies that now have graduate programs.

Senator EDWARDS: I am just conscious of the time. Does your organisation deal with AgriFood Skills Australia?

Mr Bush : Yes.

Senator EDWARDS: What is your interaction with them?

Mr Bush : First of all they were a major sponsor of the Allen survey—that is No. 1. And No. 2 is: this all started off in October 2009 when we called a general meeting for anybody who was interested in food science and technology and training in the food industry, and they appeared there and that was the first time they were on our radar. Michael Claessens, who appeared before the committee, is basically on the food science and technology working group. Also, to be blunt, their focus has tended to be up to a certain level in terms of training, and I think they do a tremendous job, but the problem that we have found is that we have got this hollow above the certificate IV, certificate V and maybe diploma level in TAFE education, where we are wanting professionals who have got good science to guarantee our food security in the future.

Senator EDWARDS: One last question: if you were to go home tonight and say to yourself, 'Gee, I wish I had said that,' what would that be?

Mr Bush : I do not know; I have not gone home yet!

Senator EDWARDS: Say you get home and you want to give a message to this committee—

Mr Bush : I cannot say that now because I have not finished, but I give you the undertaking that if I do think of something tonight I will forward it to you in writing.

CHAIR: It is a good question on notice!

Senator URQUHART: Mr Bush, you may have covered this in your opening remarks—and my apologies; I had a plane in this morning and I did not quite hear what your opening statement was; it was very difficult on the phone—but I am just interested in the Allen survey. You talk about the industry not being 'sexy'. Obviously being sexy encourages people to come into it. Is that covered in the Allen survey or is that your perception of the industry? Is that anecdotal evidence or is there evidence of that somewhere else?

Mr Bush : No, the survey actually covered the demand for food science and technology and the skill base of those required in the industry. So the comments that it is not sexy basically come from our anecdotal evidence, and my own, having been a food science technologist for a few years.

Senator URQUHART: On that, then: obviously you are looking at universities and things like that. How are you going to make it sexy? What is your organisation doing to 'sex up' this industry, if you like?

Mr Bush : We are hoping that science, as opposed to domestic science, will be the focus. Can I also go back—the Victorian government, when they issued the program, in terms of developing it, also did another survey with an independent company. One of the things that surprised me was this. One of the questions that was asked—and maybe I am naive—was in terms of young people going into industries: what was the biggest factor in them deciding which direction they went in?

I was expecting it to be the internet. I was expecting it to be other areas, such as school, teacher advisory groups et cetera. It came out that the biggest factor was parents. So they then started to talk to parents. Parents of whatever age—they are probably going to be between 40 and 60—do not find the industry sexy. They know that it is hot and it is steamy. They know it is wet et cetera. Even though we know that it is sanitary, it is still a difficult industry to commit yourself to. It is hot, steamy and wet.

Senator URQUHART: What role have the employers and the different companies around played in trying to attract food technologists? I know that the industry used to carry a lot of R&D people, but they have cut back on a lot of them. Is it the same for food technologists? Are they reducing in number? Would that be one of the reasons why people do not find it sexy to go into that, because they see do not see it as a long-term opportunity?

Mr Bush : I do not think they get to that stage. If we are talking about a very intelligent, science based student today, I am presuming that they would want to go into either medicine or engineering. But we have also found the same situation with going into pure chemistry, pure maths and pure sciences. It does not have that appeal. It is one thing that I cannot give you exact figures on, but when you look at science courses, particularly science courses that require laboratories or facilities, I believe that the annual fees are substantially more than just doing a bachelor's degree in psychology, which is sexy. It is substantially more. I am talking twofold or threefold. Therefore, we just do not know the effect of that financial aspect as well.

Senator McKENZIE: Thank you very much, Mr Bush, for your submission. As a fellow graduate of science, I personally find science very, very sexy. That officially makes me a nerd, I think! But looking beyond undergraduates, who is going to be doing the research work in this area in our universities and within industry itself at a postgraduate and beyond level that is going to drive the innovation we need in food processing?

Mr Bush : If I had to commit myself, I would say it is going to be made up of international students, who are flocking to our universities to do a Ph.D. or an MSc. The University of Queensland is a typical example. It has really good programs to do a Ph.D. or an MSc, but they are all made up of international students. You see the same thing in VU down in Werribee. Again, they have an excellent program but, again, a very high percentage—and this was three years ago when I was doing some lecturing there—of students doing an MSc were international. My personal scenario is that I am in recruitment and in the CVs that come across my desk there is a very high level of people with an MSc in food and food related topics. But they are all secondary degrees, with the primary degree invariably done outside of Australia.

Senator McKENZIE: I just wanted you to expand on the comment in your submission about the unknown impact of a carbon tax on manufacturing food processes. You comment that the concept of 'food miles' seems to have been bypassed. Could you expand on that, please.

Mr Bush : When we were looking at the environmental impact, one of our groups started to talk about food miles, which, in essence, was trying to suggest that food from Thailand obviously had a lot of food miles in it, therefore it had this impact on the environment and so therefore it was better to buy Australian. That is how I understood the concept of food miles. But that faded. It did not have any real impact on the industry, on the consumers or on the retailers. To answer your first question on the carbon tax, we have not found any member who actually understands how the carbon tax will affect them directly.

Senator McKENZIE: This tax comes in 1 July. Are you saying, that your 105 members—

Mr Bush : No, we are 75 members.

Senator McKENZIE: which make up most of the food processors in New South Wales and Victoria, do not have a significant understanding of how this tax will affect their business?

Mr Bush : That is correct, yes. There is no use in sitting back and saying we do not know. We are in the process of applying for a grant from the department of energy efficiency—or whatever it may well be called—to put on four workshops. The grant process has been launched and the first cut-off date is March 16. Our concern is that we do not know. In other words, we have not seen the information anywhere. People have done models, have done this and have done that. The other day the Prime Minister—I cannot quote the exact figure—said 'yes, but they are going to get this and instead of 25 it is going to be effective in the first year three,' so the Lord only knows and he is not telling anyone.

We have decided to look at two things: firstly, how is it geared? How is it going to affect a primary energy producer? How is it going to affect the farming industry, the transport industry, the food manufacturer, the retailer and the consumer? We do not know that. Secondly, is the expectation that it will be passed onto the consumer? Through the tax relief, is that then going to mean the consumer is not worse off? We do not know. We are applying for that grant—hopefully it will be the first through—to run four workshops but we will have to use experts to give us the scenario as in cents per this.

I noticed in the submission from Arnotts that they indicated 1c per packet of Tim Tams. With the millions that are involved, they have obviously done some calculations. I do not know where. They say 'using this and using that guideline' but we are not interested in those. We want to know, at the end of the day, how it is going to affect our members and in the second phase, which is even more important, what they can do about it for efficient energy within the food processing sector. They cannot do anything unless they know.

Senator McKENZIE: I am wondering what consultation the government has held with the food processing industry around the implementation of the carbon tax?

Mr Bush : To my knowledge, I do not honestly know what the government has done for any industry. I know they have obviously spoken to the energy industry but I am not in a position to say. To my understanding, there has been no consultation with the food industry.

Senator FISHER: Given the overwhelming proportion of foreign students studying food science and technology, are you saying they find it more alluring than Australian students? What is the reason do you think?

Mr Bush : 'Alluring'?

Senator FISHER: I was trying to find an alternative to 'sexy'. My colleagues cannot seem to contain themselves!

Mr Bush : 'Attraction'?

Senator FISHER: Yes, fine.

Mr Bush : Okay. Probably it is purely international education. If you take Sri Lanka, India, China, Thailand, Ireland and New Zealand, all of them are active but different economies where they still have a lot of traditional food science and technology degree courses. They are very good degree courses but they do not necessarily always have the facility to do MScs or PhDs. Australia, because of its image and its good education system, is attracting them as an international student rather than the food science and technology. It is that more than anything else, in my opinion. And the MSc students do not all have a degree in food science. From my experience, they might be biochemists or veterinary scientists. So they do not necessarily come from the discipline but they see it as an opportunity down the line.

Senator FISHER: Thank you.

CHAIR: Mr Bush, I thank you very much for your presentation. I want to refer you to a report released on 5 March by the Primary Industries Education Foundation. It is a report on surveys of students' and teachers' knowledge and understanding of primary industries. It indicates very well the disconnect that has grown between Australians and their understanding of where their food and fibre comes from and how it is generated. There are graphic examples in the report. For example, something like 75 per cent of students thought cotton socks came from animal products and 45 per cent of students could not identify that everyday lunchbox items such as bananas, bread and cheese originated from farms. Obviously, food processing is part of that supply chain and it is suffering from that disconnect. That might be something that can be of use to you as part of the process, particularly in the development of curriculum materials and generating those into the education system, which I think is an important element of almost everything we have talked about this morning. Again, thank you for your evidence.

Mr Bush : A pleasure. Thank you.

Proceedings suspended from 10:38 to 10:56