The AFGC is an industry association which represents the manufacturers and suppliers behind Australia’s food, beverage, and grocery brands. Founded in 1995, it is the largest and most respected voice of the Australian fast moving consumer goods industry.
The AFGC promotes sound public policy, champions initiatives that increase productivity and profitable growth and helps to protect the safety and security of the consumer product supply through a commitment to scientific and supply chain excellence and industry best practices.
Australia’s $127.4 billion food and grocery processing sector is a vital contributor to the wealth and health of our nation. The industry produces safe nutritious food and other essentials of life for every Australian every day.
It’s also sustaining Australia through the provision of jobs and economic opportunities. In 2016-17, the food, beverage and grocery processing industry directly employed almost 320,302 people, with 40% of those jobs located in regional areas. One out of every three jobs in manufacturing in Australia are in the food and grocery sector, with 234,641 people employed in food and beverage processing; 29,948 employed in grocery manufacturing and 55,713 people employed in the fresh produce sector.
This diverse and sustainable industry is made up of over 30,748 businesses and accounts for over $67.9 billion of the nation’s international trade. These businesses range from some of the largest globally significant multinational companies to small and medium enterprises, often family owned and run.
In nominal terms, the total value of international trade (imports plus exports) for the industry increased to $67.9bn in 2016-17; a nominal growth of 1.8 per cent. This can be broken down into total imports valued at $35.3bn (nominal growth of 0.3 per cent) and total exports valued at $32.6bn (nominal growth of 3.6 per cent). The trade activity that occurred over 2016-17 resulted in Australia’s trade deficit in the industry decreasing to $2.7bn (compared to $3.7bn in 2015- 16). This was a nominal decrease of 27.7 per cent. In nominal terms in 2016-17: ► Exports of food and beverages increased by 1.6 per cent from $26.0bn to $26.4bn and fresh produce increased by 3.7 per cent from $1.5bn to $1.6bn. Grocery exports increased by 16.1 per cent from $4.0bn to $4.6bn. ► Food and beverage imports declined by 0.3 per cent, while grocery imports grew (a slight increase of 0.4 per cent). Fresh produce imports grew by 10.2 per cent. However, when considered in real terms, consistent with previous reports (through the application of the export price index to account for changes in prices year-on-year), the total value of international trade (imports plus exports) for the industry in 2016-17 was $67.9bn, a real decrease of 8.1 per cent. This is comprised of: ► Exports valued at $32.6bn (a real decline of 15.4 per cent); ► Imports valued at $35.3bn (a real decline of 0.02 per cent); and ► Trade deficit of $2.7bn. Australia is a net exporter of processed food and beverages, and fresh produce, and a net importer of grocery (non-food) manufactured product. When considered in export price index adjusted terms in 2016-17 Australia recorded a trade surplus in processed food and beverage products: ► Exports of processed food and beverages experienced a real decline of 17.0 per cent, from $31.8bn to $26.4bn; ► Imports of processed food and beverages experienced a real decline of 0.6 per cent to $16.8bn; and ► Trade surplus in processed food and beverages decreased by 35.6 per cent to $9.6bn. In 2016-17 the fresh produce sector recorded a real decline in exports and a decrease in trade surplus: ► Exports of fresh produce experienced a real decline of 15.3 per cent, or from $1.8bn to $1.6bn; ► Imports of fresh produce experienced a real increase of 9.9 per cent to $834.5m; and ► Trade surplus in fresh produce decreased by 33.1 per cent to $721.0m. In 2016-17 the grocery manufacturing sector recorded a real decrease in exports and a trade deficit of $13.0bn. ► Grocery exports experienced a real decline of 5.2 per cent, or from $4.9bn to $4.6bn; ► Grocery imports experienced a real increase of 0.1 per cent to $17.6bn; and ► The grocery trade deficit increased by 2.1 per cent to $13.0bn.
There is no doubt that the Australian food and grocery sector will be a vital piece of the economic jigsaw, as we look to the postmining investment period and traditional manufacturing sectors, such as car manufacturing, move off shore. This report also shows encouraging signs with capital investment reversing the last three years of decline, rising by 4.7 per cent in 2015-16 to a total of $2.9 billion. However, looking forward, there is a significant risk that increases in energy costs could stall the recent turnaround in capital investment and employment and could lead to a loss of existing jobs and production to lower cost economies. At first glance, a 15.4 percent decline in the real value of food, beverage and grocery exports is alarming. However this decline appears driven by price factors and cyclical events such as a restocking of cattle herd and the end of the drought in key markets such as the United States. In nominal terms, exports have increased by 3.6 per cent, which is still below recent strong growth trends and where Australia should be, given our trading advantages into key markets of China, Japan and Korea. This is a healthy reminder to redouble efforts to maximise the hard fought gains of free trade agreement and attack the rising costs of manufacturing. – Clive Stiff, Chairman
AFGC promotes the role the industry plays in sustaining Australia, economic, community and environmental health. It advocates on issues of concern and interest to the industry, and acts as a forum to discuss and pursue those issues. AFGC makes representations to the Government, the retailers and other relevant organisations and key stakeholders on matters that affect the industry. We liaise with government departments on food legislation, trade practices, and environmental issues, working where needed.
The AFGC office is in Canberra where close working relationships with relevant government departments are maintained.
- AFGC’s activities are overseen by a Board of Directors.
- Specific issues are addressed through standing Committees; Health Nutrition and Scientific Affairs; Sustainable Practices; Supply Chain and Corporate Affairs. All FULL member companies may nominate representatives to these Committees.
- A series of Forums have been established to focus on specific needs of members: Trading Partner; Agribusiness; Breakfast Cereals; Quick Service Restaurants; and Legal forums.
- AFGC’s activities are conveyed to members in regular newsletters, circulars and the members section of the website.
- Members have the opportunity to meet throughout the year at a range of Conferences, Seminars, Briefing Groups, Meetings and other events.
source: AFGC
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