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Food and beverage manufacturing improves

31-08-2010
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in 
Food and beverage manufacturing improves

Australian food and beverage manufacturing stabilised last year, after a period of decline, an industry report has found.

Industry turnover remained steady at about $111.2 billion, with companies ploughing $31 billion into capital investment.

Also, exports increased while the number of imports declined.

The sector shed 1,071 jobs last year, or 0.4 per cent of its almost 300,000-strong workforce, and 170 businesses closed their doors.

About half the national food, beverage and grocery workforce are based in rural and regional areas.

The Australian Food and Grocery Council's chief executive Gary Dawson says he's not willing to say the decline has bottomed out just yet.

"It would be nice to be able to declare that," Mr Dawson told the ABC.

"When you juxtapose that with stories about factory closures continuing, about rationalisation in the industry, then I'm still a little cautious on that front, he said.

"It is a picture where, on the one hand, you've certainly got rationalisation happening, smaller factories closing, companies consolidating and automating to improve their competitiveness.

"On the other hand, you've got the example of Warrnambool Cheese and Butter, which is the subject of a huge bidding war.

"That suggests that this is not a dying industry. This is an industry with great prospects for the future, because people are willing to put big money on the table to try and capture that asset."

The Australian Food and Grocery Council is urging the Federal Government to:

  • Securing free trade agreements as soon as possible
  • Streamlining and remove duplication of regulation
  • Introduce some form of investment incentive for the industry.

Mr Dawson told the ABC the Council is already in the process of putting together a few options for incentives to take to government.

"There are various options there. There are already R&D tax incentives, there've been suggestions in the past about accelerated depreciation for example, so there are ideas that are already floating around, he said.

"As an industry, we're willing to do the work on what the options are, cost them properly and take them to government.

"The Coalition, in their election platform, opened the door on targeted investment incentives and said they'd be quite happy to talk about that. We're keen to take them up on it."

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