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Speech to the Australian Food and Grocery Council Industry Leaders Forum

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Senator the Hon. Joe Ludwig

Minister for Agriculture, Fisheries and Forestry

Speech to the Australian Food and Grocery Council Industry Leaders Forum

10 October 2012


Good morning and thank you for the opportunity to be here.

I’d like to start by acknowledging the traditional owners of the land on

which we meet, the Ngunnawal (NUN-A-WALL) people, and pay my

respects to their elders both past and present.

I would also like to acknowledge the Food and Grocery Council

chairman, John Doumani; chief executive, Gary Dawson; and my fellow

Members of Parliament, who will be joining you here today.

It’s great to be here with so many of you to kick start the first of many

important discussions to be had over the next two days.

Australia’s food, beverage and grocery industry is one that millions of

Australians rely on each and every day.

It employs around 300,000 Australians making it about the same size as the mining sector and four times bigger than the automotive industry.

The food, beverage and grocery industry plays a pivotal role in

Australia’s food supply chain and our economy.

Australia is fortunate to have a strong and resilient food supply chain

from paddock to plate.

- We have producers who are passionate about the food they



- Processors keen to innovate

- Wholesalers and logistics companies who ensure the link from

farm to the shelf

- And, finally, a strong retail sector.

Many of us, as consumers, take this food supply chain for granted.

We expect that when we want our litre of milk, our loaf of bread, our

steak and vegetables, that we will be able to get them.

But you and I know that producers, processors, logistics companies and

retailers work hand in hand to ensure food gets to our dinner tables.

The food, beverage and grocery industry is the largest manufacturing sector in Australia, valued at $110.7 billion. [State of the Industry Report 2012]

But, just like any other industry, the work your industry does behind the

scenes is not immune to market pressures.

Margins are tight and, for some of you, financial pressures are bringing about tough decisions.

These pressures have resulted in changes to business models.

Rapidly changing consumer preferences require you to stay ahead of the game.


You are required to innovate, to show foresight, and to operate flexibly in

what can be an unpredictable environment.

To your credit, the Australian food, beverage and grocery industry

continues to deliver high quality products to consumers.

The Government recognises the pressures and is implementing a

number of changes to support small businesses.

These include the Instant Asset Tax Write Offset - allowing new assets

valued up to $6500 to be written off in one year.

There’s the Tax Carry-Back which allows incorporated companies which

have made a profit in the past to claim back a tax deduction if they make

a loss in the following year.

These initiatives give businesses the confidence to invest and innovate.

Finally Labor wanted to cut the tax rate for businesses but this was

opposed by the Liberals and Greens so a Business Tax Working Group

is exploring ways to deliver a tax cut in a form that will pass the current


While there are challenges, there is also success to celebrate.

Forums like this are a great opportunity to share those stories, whether

they are on a national or an individual level.


During a trip to Port Lincoln earlier this year, I saw the reward that innovation brings.

A tuna processor increased its productivity by thinking outside the

square and adding new production to their business.

By producing gravy mixes and baby food, the facility now supplies new

markets, has improved its bottom line and continues to be an important

employer in their regional centre.

Diversification also boosted the productivity of Longwarry Food Park in Victoria.

The business had been under pressure, but new owners upgraded it

with the latest technology and increased its capacity.

As well as producing fresh milk for the local market, it now supplies milk

powders and dairy-based products for the export market.

These are just two examples of regional processors who have looked ahead, made investments, diversified and seized opportunities.

Food and food security issues are at the forefront of peoples’ minds.

That’s why we are committed to supporting Australia’s food industries

now and into the future.


It is also why we’re developing Australia’s first ever National Food Plan.

The final National Food Plan will be released early next year.

It will drive the future direction of Australia’s food system from paddock

to plate.

It will make the most of the opportunities available to our food industries,

like the growing consumer demand in Asia.

This plan will ensure government decision making looks across the

entire supply chain.

Hundreds of stakeholders have participated in discussions about the

plan in recent months, including the AFGC.

The AFGC submission to the Food Plan green paper raised a number of issues of concern to you, as members of this council.

I want to assure you these will also be considered as we develop the final Food Plan.

In addition to this, but also as a part of the National Food Plan, we are working to improve supply chain relationships.

Representatives of the food sector, including AFGC, came together at a forum in Sydney for this exact purpose a few weeks ago.


The focus was building stronger relationships in our supply chains -

primarily between retailers and producers and processors.

It was an opportunity for people to have a frank and open discussion.

The forum recognised the strength of the food sector but that some relationships in the supply chain had deteriorated.

It acknowledged that those along the supply chain had to act.

Industry participants - including your CEO Gary Dawson - worked

together, fleshing out the key priorities for an industry led agreement or


Participants agreed on the need to improve transparency within the

system; a need to improve business practices; a need to strengthen


They recognised the need to improve the opportunities for producers, manufacturers, processors, wholesalers and retailers to respond to consumer preferences.

Participants also made a shared commitment to a cooperative



The government is supportive of this industry-led action to develop a

voluntary agreement or code.

The supermarket forum signalled progress, but I encourage parties to

stay engaged and expand on this in coming months.

To conclude, Australia is fortunate to have a food industry that services our nation well from paddock to plate.

The Government recognises the important role your industry plays in our

food supply chain, as well as the difficulties and opportunities before


Through key initiatives like the Food Plan, we will work to support you

wherever we can.

I want to take this opportunity thank you for the important job you do.

I look forward to continuing to work with you to ensure long-term

prosperity for our food and grocery industry.

I hope you enjoy your time at the Leaders Forum today and tonight, at the Gala Dinner at the Australian War Memorial.

Thank you.