While Australia’s food and grocery industry has weathered the impacts of the pandemic, the war in Ukraine and supply chain pressures could be too much for some businesses to bear, says the AFGC.

The Australian Food and Grocery Council (AFGC) State of the Industry report shows that food manufacturing’s value has risen, despite the impacts of the pandemic and production cost pressures.

Australia’s food and grocery manufacturing industry increased its value to $133.6 billion in 2020/21. The 0.9 percent increase in turnover came despite a 17.1 percent fall in the value of exports, as global supply chain disruptions affected sales into key export markets in Asia and the US.

While the industry has weathered the impacts of COVID-19, AFGC CEO, Tanya Barden, said the war in Ukraine and supply chain disruptions have affected the growth outlook and stoked inflation.

“These figures predate the unprecedented impacts of this year’s heavy flooding in eastern and central Australia, as well as the war in Ukraine. The pressures manufacturers were facing a year ago have intensified to the point where the viability of some businesses could be at risk,” she said.

Key findings from the State of the Industry 2022 report:

  • Panic buying and stocking up created a spike in domestic spending, up nine percent to $99.4 billion. This countered a 17.1 percent fall in exports.
  • Imports fell 6.6 percent to $37.2 billion
  • China remains the largest export destination for food, beverage and grocery exports, worth $7.3 billion
  • The largest increase in exports was to Vietnam, up 13.8 percent to $796 billion

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