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Food manufacturers starting to pass on rising costs: AFGC

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The nation’s main food and grocery industry group has warned that its members are having to pass on their rising costs, which will lead to increased prices for supermarket customers.

In comments likely to add to worries about inflationary pressures, the Australian Food and Grocery Council said in a statement that wholesale prices they received had been rising slower than input costs for the last decade. Manufacturers had absorbed a lot of costs prior to the Covid-19 pandemic over the last two years.

“The cost of shipping ingredients and finished goods to Australia has risen by 500 to 700 per cent. There have also been significant costs to business as a result of COVID safety measures, domestic freight cost increases caused by weather disruptions, shortages of pallets and rises in the cost of packaging,” said AFGC CEO Tanya Barden in a statement on Monday.

“Adding to this unprecedented COVID disruption, manufacturers are facing increases in global commodity prices as a result of the situation in Ukraine and they are now seeing increases in labour costs.

“There is no longer the ability for manufacturers to continue to absorb those increased costs”.

Official inflation data for the year’s first quarter will be released on April 27.

Recent economic surveys have pointed towards strong inflation since 2022 began, as well as the likelihood the Reserve Bank will raise interest rates, which has not happened since 2010.

An ANZ report released on Friday predicted the first quarter inflation increase of 1.8 per cent, and that year-on-year inflation will be 3.4 per cent, higher than the RBA’s target band of 2 to 3 per cent.

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