05/03/2008 - 22:00

Report focus on food's future

05/03/2008 - 22:00

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The state government is looking to aid the recovery of the state’s food industry following years of significant declines.

Report focus on food's future

The state government is looking to aid the recovery of the state’s food industry following years of significant declines.

The government’s food strategy discussion paper,  released this week, addresses the need for government incentives, including grants, as well as changes to planning schemes and the possible establishment of a Western Australian food processing innovation precinct to provide a catalyst for industry growth.

After achieving double-digit annual growth rates in the 1970s and early 1980s, the food industry’s recent growth rates have slowed, with average growth of less than 5 per cent for each of the past five years, the paper says.

Commodity producers have also been forced away from the industry, with the number of establishments involved in agriculture dropping 12 per cent over the past 10 years, to 129,934 in 2005.

Currently, the food manufacturing sector generates about $5.5 billion for the state’s economy and employs 9 per cent of the workforce.

Food Industry Association of WA chief executive officer Andrea Berteit said there was an urgent need for the food industry to develop a coordinated strategy, which should be driven through the FIA with support from the state government.

Ms Berteit said globalisation was concentrating the decision-making power into the hands of fewer and fewer people, and there was a need for the industry to have both proactive and reactive strategies and plans to deal with this shift.

Key areas identified by the FIA of WA as critical to the future of the state’s food industry include incentives for business in the packaging, distribution and marketing sectors to expand their operations.

The association also wants an innovation fund established to foster research and development, and incentives provided to facilitate and attract investment from within and outside the food industry.

The FIA of WA was established late last year and represents the interests of WA’s 950-plus food and beverage manufacturers.

Founding members include representatives from Golden Egg Farms, Challenge Australian Dairy, Pacco Group, Canon Foods and Competitive Foods (CF) Group.

The report says the increase in retailer brands, supply chain and supplier rationalisation, and retailers’ discount marketing strategies have all influenced the changing domestic market.

The WA food industry currently makes up about 30 per cent of the value of food sales in WA super-markets, with the remaining 70 per cent consisting of imported Australian and international products.

Food and beverage processing in WA accounts for about 13.3 per cent of the total value of WA’s manufacturing sector.

The combined value of processed and unprocessed food exports reached $4.7 billion last year, with most of these exports going to key export markets of China, Hong Kong, Japan and Indonesia.

Among the report’s recommendations was the establishment of food industry clusters and production, which could link to complementary tourism related industries, and a focus on direct assistance to the ‘premium’ food category, which offers greater opportunities to raise margins and add value to declining categories.

The premium market is considered one of the fastest growing areas in food and beverages.

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