‘Priced out of existence’: Manufacturer’s blunt warning on spiralling energy costs

The soaring cost of energy is smashing both Aussie businesses and household budgets. See the alarming increase in gas costs being passed on from manufacturers to Aussie families.

Businesses that produce groceries are being smashed by soaring gas bills that are making it harder and harder to stay afloat.

From breakfast staples to bathroom supplies, the price you pay for goods to run a home are soaring upwards, hastened by energy costs.

Today this masthead can reveal more about the scale and breadth of the impact than has ever occurred before.

Homestyle Bake, which supplies Queensland supermarkets, schools, nursing homes and prisons, is paying about 200 per cent more for gas now than it was three years ago, said director Lindsay Weber.

Laila Matto working at Homestyle Bake Toowoomba. Picture: David Martinelli

Its electricity bills have leapt by about 300 per cent over the same time, Mr Weber said.

“It has become a huge impost on the business,” he said.

Homestyle Bake employs about 300 people at Toowoomba and on the Gold Coast.

“We have had to continually look for efficiency gains and take a reduction in margin.

“That means you have less money to reinvest in the business on bakery equipment, which wears out, as do delivery trucks,” Mr Weber said.

He said while he was a supporter of the “agenda for green energy”, it was vital that politicians “look at what impact that is having on businesses in Australia”.

“Manufacturing is being priced out of existence,” Mr Weber said.

“Energy costs here are extremely high compared to other countries around the world.”

Workers at Homestyle Bake Toowoomba, which has developed an energy efficient operation. Picture: David Martinelli

A spokeswoman for Mondelez – which makes biscuits, chocolates and cream cheese at six plants across South Australia, Victoria and Tasmania – said “gas prices have increased by more than 50 per cent … over the past year where our manufacturing facilities are based.”

A manufacturer of toilet rolls and paper towel, speaking on the condition of anonymity, disclosed that its gas costs had shot up by more than 200 per cent in less than two years.

“It’s crazy,” the paper business executive said.

Milk and cheese producers are also being hit hard.

Dairy manufacturers are now spending $100 million per year more on energy than they did in 2016, despite a 12 per cent decrease in milk production.

Gas costs are up 157 per cent over that time period, a spokeswoman for Dairy Australia added.

Much of the energy bill increases for all of these items – and so much more of a typical supermarket trolley – are ultimately passed on to consumers who are already being smashed by rising electricity and gas bills of their own.

Australian Bureau of Statistics data shows the price of gas for households had risen by 219 per cent nationally over the past 20 years.

Electricity costs rose by 180 per cent over the same time, before governments state and federal started offering significant taxpayer-funded rebates.

Originally published as ‘Priced out of existence’: Manufacturer’s blunt warning on spiralling energy costs