Woolworths CEO Brad Banducci says Victorian government concessions should ease risk of grocery shortages

Concessions granted by the Victorian government after last-minute crisis talks with the big supermarkets should ease shortage risks, but meat is still a worry, says Woolies boss.

Woolworths CEO Brad Banducci. Picture: Adam Yip

Woolworths CEO Brad Banducci says Victoria and the rest of Australia are likely to have avoided food shortages and rationing caused after the Victorian government backed down from some of the harshest measures of its stage four lockdown, which would have hamstrung warehouses and distribution centres.

Mr Banducci told The Australian that although retailers were still working on fixing supply issues for red meat, due to severe regulations now placed on abattoirs, allowances made by the government following crisis talks would help ease supply constraints and pull the state back from facing empty supermarket shelves.

“It is very helpful for the government to be very pragmatic in terms of the balance, the need for all of us to absolutely practice a COVID-safe policy but also to make sure we have enough food on the shelf,’’ Mr Banducci said.

“The only the thing I need to do more work on – and our team is working on it – is red meat. Obviously that is a challenge with the demand surge we have had in red meat and the implications of the announcement for that industry, so we still have got more work to do there. But it’s really helpful for us and all other food retailers in Victoria.”

The nation’s supermarkets won some room to move over the number of workers allowed at warehouses, distribution centres and other points across the state supply chain, with hopes the last minute reprieve will lessen the chance of food shortages and reintroduction of purchasing limits.

The Victorian government will also allow supermarkets more time to get their workforce plans in place, with a midnight Friday deadline now pushed back to midnight Sunday.

The policy changes came after the Supermarkets Taskforce group, made up of Woolworths, Coles, Aldi and Metcash, expressed concerns about the heavy stage four restrictions on the grocery supply chain, arguing they would have been calamitous not only for retailers in Victoria but also nationwide.

“We [the Supermarkets Taskforce] have met many times in the last four days and twice today,” Mr Banducci said. “But I think we are all very supportive and really grateful that the government has been constructive in its dialogue. We are all agreed on their aspirations and objectives, so its about making sure it [the policy] is fit for purpose,’’ Mr Banducci said.

“We do have enough food in the supply chains in all retailers to meet the needs of the country. But if we found a situation where the warehouses were materially compromised for a long period of time, clearly there are flow on effects particularly given we have one of our national distribution centres in Melbourne.

Woolworths CEO Brad Banducci. Picture: Toby Zerna

Earlier on Thursday the Supermarkets Taskforce warned of potential of panic-buying and food shortages resulting from the lockdown regulations, the toughest yet seen in Australia.

Of particular concern was the rule that only one third of workforces being allowed to in crucial food manufacturing and supply chain workplaces.

Initial disruptions in Victoria could spread nationwide, the group believed.

The taskforce was convened by the Department of Home Affairs in March to co-ordinate and ensure the continuity of grocery supplies during the COVID-19 pandemic.

In March and April, purchasing limits were co-ordinated by the taskforce when rationing measures were first introduced, after consumers stripped shelves of items such as toilet paper, rice, pasta and meat.

Members of the group were initially worried the Victorian government was showing no signs of changing its mind over severe restrictions on the number of workers at factories, manufacturing and distribution centres.

A member of the taskforce earlier told The Australian that the supermarkets could see any other outcome than a sharp fall in the flow of supplies to supermarket shelves, which could then trigger further panic buying and ever more shortages.

The Australian reported on Thursday that a supermarket member of the taskforce had already issued a warning to Prime Minister Scott Morrison that the tougher COVID-19 lockdown across Victoria would lead to national shortages, fresh panic buying, and could force more frequent visits to the shops as consumers struggle to fill their baskets.

The supermarket, which declined to be named but which was confirmed by The Australian, made the approach to the Neville Power-chaired National COVID-19 Commission advisory board, urging that concerns over continuity of grocery supply be taken directly to Mr Morrison.

Bare shelves in a Melbourne supermarket last month. Picture: David Crosling

The move came after The Australian also revealed on Wednesday that 100 top business leaders pleaded with Mr Pallas at a Business Council of Australia-organised crisis meeting, where they called on the workplace restrictions to be eased to avoid disruption to supply chains, and to avoid the national shockwaves that would follow freezing of parts of the state’s industry.

There is growing anxiety within the $90bn grocery industry that the Victorian government’s restrictions, particularly cutting back workforces at distribution centres by one third, will lead to food shortages that will not be able to be replenished in the six weeks of stage 4 restrictions.