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Grocery price rises inevitable as manufacturers run out of options

(Source: Bigstock.)

Food and grocery manufacturers can no longer continue to absorb increased costs and price rises for consumers are inevitable, says AFGC CEO Tanya Barden. 

In a stark warning aimed at consumers, issued on Monday, Barden said that during the past couple of years the price of inputs for making and distributing goods has risen. 

“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,” she said.

These pressures are already starting to flow through to supermarket shelves and now, with the peak of Covid likely passed, new pressures are coming to bear. Russia’s invasion of Ukraine is putting pressure on global commodity prices and at home employers are facing rising labour costs.

“Over the past decade manufacturers have already been dealing with a situation where wholesale prices – the prices they receive for their goods – have risen by less than the cost of their inputs,” said Barden. 

“There has been a lot of absorbing of costs by manufacturers before the impact of the pandemic.”

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