Following the introduction of the carbon tax, 90 per cent of Australian food manufacturers have reported rises in input costs, according to the Australian Industry (Ai) Group.
The food manufacturing industry was found to have been particularly badly affected by the new carbon tax legislation in the Ai Group's multi-stage research project that covered the manufacturing, services and construction sectors.
Innes Willox, chief executive of the Ai Group, said the report showed that the net cost burden of the carbon tax has fallen very unevenly across industry.
"Food manufacturers have been particularly squeezed and are the most likely to have reported immediate rises in their input costs (90 per cent) and the least likely to be able to pass on their higher costs through the supply chain (11 per cent),” Willox said.
“Food manufacturers do not qualify for the trade exposed industry assistance program and are currently facing substantial resistance to price rises from the major retailers.”
The project found that the impact of the carbon tax on production costs and profitability for niche groups such as food producers has probably been greater than anticipated.
“Crucially for these businesses, this has come at a time when business competitiveness is under pressure on a number of fronts, including from the ongoing strength of the Australian dollar and relatively strong growth in unit labour costs,” said Willox.
“While competitive grants are available to businesses such as food processors under the Clean Technology Program for capital investments to help reduce their exposure to carbon pricing, they are not covered by the more comprehensive assistance program available to the most emissions-intensive industries. The evolving impact on these sectors will be closely watched.”
The project involved surveys, undertaken in June, July and November 2012, of 485 businesses across the the manufacturing, services and construction sectors.
Manufacturing businesses estimated an average rise in input costs of 14.5 per cent; service providers estimated an increase of 13.6 per cent; and construction companies estimated an increase of 14.8 per cent.
