Situation “desperate” as food supply chain down 172,000 workers

Australia’s peak food industry bodies, including the Australian Association of Convenience Stores (AACS), have estimated that the food supply chain is short around 172,000 workers from paddock to plate.

It’s expected that this labour shortage will lead to prolonged higher food prices for consumers and reduced food availability throughout 2022 and beyond without support from the federal government.

According to the peak bodies, which have recently collaborated to form the Food Supply Chain Alliance, this is one of the few ‘cost of living’ pressures the Government can influence.

The Alliance, which represents more than 160,000 businesses with a revenue of over $200 billion, believes the food sector must be a priority at the upcoming Jobs and Skills Summit, which must deliver viable solutions to be considered a success.

The Food Supply Chain Alliance includes the National Farmers Federation, the Australian Meat Industry Council, Seafood Industry Australia, Independent Food Distributors Australia, AUSVEG, Master Grocers Australia, Restaurant and Catering Industry Association and AACS.

According to the Alliance, the food supply chain urgently requires a suite of tools, including suitable visa pathways to welcome overseas workers, as well as measures to facilitate people in the country to take up the work (such as lifting restrictions on work rights for temporary migrants and seniors, and support to enable relocation to do the work).

It believes the government must, as a matter of urgency, develop a National Food Supply Chain Strategy to reduce the impact of both natural disasters and future global challenges.

Theo Foukkare, CEO, AACS, says that the petrol and convenience channel has never experienced such dire workforce shortages, currently seeking more than 15,000 staff nationally.

“The industry relies heavily on overseas migration from international students and working holiday travellers however they just have not come back in the numbers that the government expected them to.

“Our member businesses are stretched to the absolute maximum trying to just operate their retail stores with limited labour while also having to increase staff wages simply to retain their staff – the impact on the bottom line is endless. These pressures combined with the exploding cost of doing business is already seeing a rise in shelf prices of food and grocery, in some categories up to 15 per cent higher.”

Jos de Bruin, CEO, Master Grocers Australia (MGA), said that the staff shortages of the past 12 months have been unprecedented in the independent grocery channel.

“The situation is diabolical as members struggle with increased costs of doing business coupled with insufficient staff to help run their stores. Our industry sector has traditionally relied upon local workers in the first instance and then new migrant workers, temporary visa holders and backpackers to work in their stores. MGA strongly encourages the government to allow older workers currently not wishing to risk their pension payments, to work in our members’ stores as well as simplifying Temporary Visa conditions to allow temporary visa holders to work longer hours, extend their visa and apply for permanent residency.”

Richard Forbes, CEO, Independent Food Distributors Australia, said that recruiting and maintaining staff is almost impossible.

“The ability to transport food is becoming harder by the day due the significant shortages of truck drivers across the country. Coupled with that is an ongoing lack of skilled and unskilled workers in food warehouses to help pack and store food products and drive forklifts to unload trucks from suppliers and load them for food retail outlets.”

The pain is being felt right across the supply chain, with Tony Mahar, CEO, the National Farmers Federation, saying that farmers are making the difficult choice not to plant some crops, because they can’t guarantee they would have the workers for harvest.

“If crops don’t get planted, less food gets grown, and people pay more. It’s a simple equation. We need appropriate visa solutions to attract workers and ensure they’re treated fairly,” he said.

Meanwhile, Michael Coote, CEO, AUSVEG, said that Australia’s $15 billion horticulture industry is currently experiencing a labour shortage of approximately 10,000 individual workers.

“Without immediate action, the compounding effect of this labour shortage, coupled with adverse weather conditions and rising farm input costs, will likely result in periods with higher prices for consumers and a higher likelihood of gaps in availability of some crops over the next 12 months,” he said.

Veronica Papacosta, CEO, Seafood Industry Australia, said that the labour shortage is impacting 48 per cent of businesses across the sector.

“[This means that] boats are tied up at docks because we cannot achieve minimum crewing levels, seafood processors and retailers cannot find staff to operate their businesses, and the impacts in our aquaculture facilities will be felt for years to come. Like all proteins and produce, a reduced supply of seafood into stores puts pressure on the cost of the family meal. This is something we never want to see.”

Patrick Hutchinson, CEO, the Australian Meat Industry Council, said the meat supply chain is under-resourced to process the 15 to 35 per cent increase in livestock that is predicted for 2023-2025.

“This will obviously be catastrophic for Australian farmers if the volume of livestock is far greater than the meat processing industry can process, and the wider supply chain has the ability to manage.”

And in the $57 billion hospitality industry, Belinda Clark, CEO, the Restaurant and Catering Industry Association, says restaurants, cafes and caterers are currently looking at a shortfall of 100,000 jobs across the country.

“The heartbreak of having to shut their doors due to COVID-19, losing their staff or even having to close the business for good has taken its toll on everyone. And we’re still not out of the woods. Input costs have risen considerably in all areas, this perfect storm will mean that prices will have to rise just for businesses to make ends meet and customers will start to see their favourite items on the menu start to disappear. Times have never been tougher and the public and industry need to come together to get through this. We desperately need a solution.”

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