OPINION: by Glenn CooperNews Weekly
Australia's shrinking food and manufacturing sectors
, April 28, 2012
Australia’s food and drink producers must be vigilant or we will end up selling the farm and being left with nothing when the mining boom ends, warns Glenn Cooper, chairman and marketing director of Australia’s largest locally-owned national brewer.
This year, Coopers Brewery is celebrating two key achievements.
The first is historical. It is now 150 years since my great, great grandfather, Thomas Cooper, brewed his first commercial batch of beer in Adelaide and formed what is now known as Coopers Brewery.
At the time, Coopers was just one of 10 breweries in metropolitan Adelaide, with another 33 operating in country South Australia. This situation was much the same in all Australian states at the time.
These breweries supplied jobs for thousands of Australians and were significant businesses in their day, providing downstream employment and markets for suppliers, farmers and local businesses.
Over the next 150 years, these breweries closed, merged or were purchased by larger competitors, initially Australian-based, but in recent years from overseas.
Late last year, Foster’s was taken over by giant UK-based SABMiller, leaving Coopers as the largest Australian-owned brewer.
Our survival against all the odds and our new status as the largest Australian-owned brewer is the second key achievement that Coopers celebrates this year.
In many ways, what happened in the brewing industry in the past 150 years is currently being repeated in Australia’s food and manufacturing sectors.
Companies are disappearing, often purchased by international competitors. Iconic Australian brands are now either owned by overseas producers or have been replaced by global products.
It may not yet have reached the extreme level of the brewing industry, where only one major Australian company remains; but recently published figures collated by the Rural Industries Research and Development Corporation (RIRDC) and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) show that foreign-owned companies now control the majority of Australia’s dairy, grain, sugar and even malt-processing industries.
Australia increasingly imports manufactured goods rather than making them locally. This extends from electronic goods to processed foods.
As the deputy chairman of the Australian Made, Australian Grown organisation, this deeply concerns me.
It is vital that Australia retains buoyant manufacturing and food production sectors.
Manufacturing is the key to any advanced country’s economy. It is a major driver of employment and innovation and helps underpin entire economies.
As a population, we are currently enjoying the impact of cheap imports that are being made even cheaper as a result of the high Australian dollar.
The downside to our love of cheap imports is a loss of manufacturing capacity and skills that will inevitably be required again in the future.
The mining boom will not last forever, and when the Australian dollar drops we may well regret the loss of skills and closure of smaller manufacturers as the cost of imports rises.
Other countries around the world have recognised the danger of losing their manufacturing industry and allowing food production to be owned by overseas producers. Many have arrangements in place to ensure their manufacturing and food production capability is retained.
Australia is considered one of the most open trading countries in the world, but I am not convinced that this is something of which we should be proud.
It is time we looked at our major competitors, observed what arrangements they have in place to protect their industries, and then considered adopting similar arrangements to bring back true competition.
It is also probably time to look again at anti-dumping rules to protect remaining Australian manufacturers and food producers from unscrupulous actions by overseas companies subsidised by their national governments.
The sale of productive farmland to multi-national companies is also something needing to be re-examined and discussed with governments, farmers, the Foreign Investment Review Board and others. At the moment, farm property sales to overseas interests of less than $231 million are not subject to review. In my opinion, this level is far too high.
The risk is the loss of the farm, logistics and the value-adding sectors.
Coopers continues to make its own way in the world and supports as many Australian-owned producers as possible.
It is time we all looked to do the same.