Grocery prices at Woolworths, Coles and other supermarkets across Australia are expected to rise by as much as six to eight per cent in the next year, a group of the country's biggest food producers have warned, as long-term supply chain issues from natural disasters and labour shortages continue to plague the industry.
The National Food Supply Chain Alliance – made up of representatives from various sectors of the food industry – say the unprecedented scale of threats to the nation's domestic supply chain are set to continue to put pressure on grocery prices for at least another 12 months.
With as many as 80 per cent of Australians concerned about rising food and grocery costs, the alliance is calling on the federal government to support the creation of a national food security plan as farmers continue to deal with ongoing extreme weather and post-pandemic labour shortages.
Risk management strategy
The group has met with the government to explain the risks of the supply chain disruptions to the economy, and to Australians in general, and urged that the national plan be developed and implemented as "a matter of urgency".
"We live in changing times and in a changing world. We need to adapt," explained Independent Food Distributors Australia CEO Richard Forbes in an interview with Yahoo News Australia.
Citing geo-political tensions, transport and logistical issues and financial challenges from rising costs of business, Mr Forbes said establishing a national food security plan would be a business-like risk management strategy that would attempt to help stabilise the prices of goods under mounting pressure. In the last nine months alone, operational costs of businesses in the industry have seen a 27 per cent increase, he added.
"We've seen 11 catastrophic events in three years. Unless we have a national food security plan, food prices will continue to increase," Mr Forbes explained further. "Without a proper strategy, we're going to be underprepared. It would be irresponsible of the government not to heed the warning."
According to the Australian Bureau of Statistics, fruit and vegetable prices rose 16.2 per cent in the 12 months to the September quarter, while dairy products saw an increase of 12.1 per cent. The strong price rises were seen across all food and non-food grocery products in the September quarter, with food and non-alcoholic beverage prices rising nine per cent during this period.
Woolworths welcomes future-proofing strategy
Australia's largest supermarket chain Woolworths has welcomed the alliance's push for a national food security plan, emphasising the need to "future-proof" supply chains in the country.
"The sustainability and security of Australia's food system is critical to the future of our customers, supplier partners and our own business," a Woolworths spokesperson told Yahoo News.
"We're continuing to invest in a more resilient supply chain to build on the infrastructure that has seen us serve communities throughout droughts, bushfires, COVID-19 outbreaks and floods," the spokesperson said and continued, "We would welcome a nationwide focus on future-proofing supply chains, especially in transport infrastructure that can withstand disruptions and aid the continuity of food supply."
The Woolworths spokesperson added that the retailer is also engaging with suppliers to sensitively manage industry-wide inflationary pressures as it tries to strike a balance between paying farmers a fair market price and delivering value to customers, adding that it has frozen the price of more than 200 essential products to help customers manage cost of living pressures.
Coles has been contacted for comment.
Feeding the hungry
Woolworths, which partners with food relief charities such as Foodbank, OzHarvest and Fairshare, provides edible surplus food that can no longer be sold in its stores to help feed Australians in need. In the last 12 months, the Woolworths Group has also donated some $6 million to support hunger relief.
Foodbank, in its 2022 Hunger report, revealed that as many as two million Australians struggle to put food on the table, impacting 1.3 million children.
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