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Hope for food manufacturing revival as exports jump

The Australian Food and Grocery Council’s (AFGC) annual ‘state of the industry report’ says a nearly 30 per cent increase in food exports was largely driven by high demand for Australian beef.

AFGC chief executive, Gary Dawson said a more favourable exchange rate has been an enormous help for exporters, but the opening up of new markets through free trade agreements has encouraged overseas buyers to invest.

“We have seen a spectacular surge in food and beverage exports, up 28 per cent last year from $20 billion to $26 billion, and a near doubling of the trade surplus for food and beverages,” he said.

“So there is double digit growth across a whole range of categories including some you would not expect, like beverages, biscuits and confectionary, sauces and condiments and a whole range of processed foods.”

The report reveals exports of fresh produce, like summer fruits, has increased by almost a quarter over the same time frame.

Bundaberg Ginger Beer chief executive officer, John McLean exports all over the world and believes trade has never been stronger, with his exports rising by 60 per cent in the last 12 months.

“The USA will be our biggest international market next year and the total international business will surpass Australia in four years’ time,” he said.

“When I walk into a small bar in the United States and the number one pour in a Moscow Mule is my brand of ginger beer, the first thing I feel is just absolute pride.”

It is one success story in what Mr Dawson claims is a growing trend, but not all businesses are benefiting from higher exports.

Vegetable processor Simplot is recovering from a difficult period, which many thought could spell the death of food manufacturing in Australia.

Two years ago, the company threatened to close its frozen vegetable factories in Devonport and Bathurst because it couldn’t compete with cheap imports.

But managing director, Terry O’Brien said Simplot’s fortunes had changed.

“We have got long-term contracts from Coles and Woolworths,” he said.

“We had improvement from our suppliers in their pricing and state governments came to the party and most importantly we had our employee base walk away from the traditional 4 and 5 per cent pay increases.

“It’s going much better than it was before; our estimation at the time was that the bad times were here to stay and it is now paying its way.”