Australia's $50 billion-a-year food export sector risks missing out on export opportunities from the Asian-led dining boom because of regulatory burdens and the absence of key free-trade agreements.
In its submission to the federal review of agribusiness policy, peak industry body the Australian Food and Grocery Council urges sweeping measures, including a co-ordinated marketing push under a new brand of “Trust Australia’’.
“The significant global opportunities for the Australian agrifood sector are in stark contrast to the challenges faced,’’ says the council’s submission to the agricultural competitiveness taskforce. The AFGC highlights how Australia’s share of global food exports to its key markets slipped from 11 per cent in 2006 to 6.5 per cent last year. This mirrors Australia’s overall decline in the World Economic Forum’s ranking of global competitiveness, from 16th to 21st.
“We seem to have a great capacity for self-inflicted damage,’’ the submission says. “Think live cattle export bans, carbon tax and now a doubling or tripling of gas prices on the east coast as examples of how we have managed to sabotage our competitiveness.’’
Given next week’s frugal federal budget, AFGC chief executive Gary Dawson said the council had not demanded costly measures on its wish list.
But he said the sector craved a “comprehensive and commercially meaningful” free trade agreement with China, followed by negotiations with Indonesia and India on a similar compact.
“The government needs to continue securing free-trade agreements that deliver real commercial outcomes, particularly for sectors such as dairy and extending to packaged foods.’’
The council says while the food sector has advantages in areas such as manufacturing know-how and food safety, export promotion is hampered by a fragmented approach by the states, Austrade and the Department of Foreign Affairs.
“All too often industry relays frustration from their customers about the fragmented Australian promotional activities and the confusion that causes,’’ the submission says. “Unless a more collaborative and co-ordinated approach is adopted, Australia risks continuing to lose market share to countries that have a more strategic and co-ordinated promotional approach.’’
The council urges the government to address concerns that offshore capital is not welcome in the sector. These fears heightened after the government last year vetoed the US-owned Archer Daniels Midland’s $3.4bn offer for GrainCorp, but the Foreign Investment Review Board approved Canadian dairy giant Saputo’s $500 million takeover of Warrnambool Cheese & Butter.
A further test lies with Singapore-based Wilmar’s $1.27bn takeover bid for Goodman Fielder, the owner of a string of household brands including Meadow Lea, White Wings and Helga’s.
“A lot of big global firms have got the message out of Australia that we don’t want their investment,’’ Mr Dawson said.