Shoppers’ shrinking value
AUSTRALIA’S family favourite food brands are preparing to reduce their serving sizes or hike up their prices as the crippling drought, high labour costs and increased energy prices grip the nation’s food-manufacturing sector.
Consumers are being warned that tough economic times for the local industry could soon impact the weekly shop, as Australian companies consider price rises, shrinking packing sizes or reducing their product range offerings to avoid moving offshore.
Biscuit maker Arnott’s last year raised the ire of shoppers when it reduced the size of its multi-pack Tiny Teddy and Shapes biscuits from 10 packs to eight but kept the price the same.
Red Rock Deli chips have also been reduced from 185 grams to 165 grams, Freddo Frogs shrunk from 15 grams to 12 grams and Doritos Corn Chips contracted from 200 grams to 175 grams in the past few years.
But Australian Food and Grocery Council chief executive Tanya Barden said “something had to give” and companies could no longer absorb mounting manufacturing costs without risking the viability of some operations.
“Food and grocery suppliers, big and small, are conscious of cost-of-living pressures on consumers, and have been absorbing rising manufacturing costs for some time,” Ms Barden said.
“But the high pressure on Australia’s largest manufacturing sector is only expected to intensify with costs on everything from commodities — particularly caused by the drought — to labour to energy, continuing to increase.”
Severe drought conditions across the eastern seaboard severely hit winter crops such as wheat, barley, oats and canola — used in everyday items 1 Axe a timber
helicopter 2 Rex celebrates to outshine 3 Some of the isms suggest a belief in God If it’s hiding seizures 4 like bread, biscuits and cooking oil. Ms Barden said cost increases were now impacting the viability of Australian operations, with 4750 jobs lost in the sector in recent times and the potential for further job losses, business closures or moving operations offshore.
“A number of companies either need to increase their prices, decrease their product sizes or reduce the product ranges they produce if they are to continue production in Australia,” she said.