Michael Rapattoni (left) and Richard Pace. Photo: Grant Currall.

Gas crisis bites food manufacturers

The state's food and beverage manufacturing sector believes the fallout from the gas crisis could be felt for years, not months, as it faces the challenge of rebuilding customer relationships and workforces once normal gas supply resumes.

While some food and beverage manufacturers currently face reduced production, increased costs and staff losses, the longer-term impacts of reduced supply are starting to emerge.

Harvey Industries Group chief executive Michael Rapattoni said the economic lag from the gas crisis would be felt for years.

"We're viewing that the gas impact is not a three- or four-month thing, it's going to be two years," Mr Rapattoni told WA Business News.

"The real risk is you lose your customers and you've got to rebuild those relationships.

"Staff is the other one. If you start losing staff, to rebuild that workforce is not an overnight thing."

Mr Rapattoni said the company's production was down about 30 per cent, and while it was still on daily allocations, gas supply seemed to have stabilised.

"Stability is one of our key issues. We've got trucks coming down from the north with cattle for two days and you can't just bring northern cattle down to the South West at this time of year and expect them to survive," he said.

Last week, Apache Energy Ltd said partial gas production would resume on August 15, before ramping up to full capacity in December.

Some food and beverage manufacturers that were Alinta customers have switched to Synergy, which has largely been unaffected.

One of these is Vesco Foods, which last week signed up with Synergy after being forced to close for a week.

Beverage manufacturer Harvey Fresh has also reportedly switched from Alinta to Synergy.

Canon Foods chief executive Richard Pace said the biggest impact for his company was on carbon dioxide supply for its convenience food manufacturing facility in Canning Vale.

Mr Pace estimated he was paying up to four times more for CO2 sourced from the eastern states, and said some smaller food and beverage business wouldn't have the resources to survive without gas supply.

'There are some businesses that won't exist at the end of this, because in our industry if they can't get it from you they'll get it from somewhere else," he said.

"There are people without resources at the smaller end if they don't get gas, they can't survive two to three weeks without gas."

WA Food Industry Association chief executive Andrea Berteit said her members were concerned the crisis could have an irrecoverable long-term impact on the state's $5.5 billion food and beverage industry.

She believes the increased operating costs to businesses, either from having to use alternative fuel sources or buying CO2 from the eastern states at inflated prices, may eventually be borne by consumers.


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