‘Price cliff’: SPC calls for government plan to tackle rising energy costs

The boss of one of Australia’s top food processors says they’re facing an “energy price cliff” and government intervention may be needed.

One of Australia’s top food processors says they’re facing an “energy price cliff” and says government intervention may be needed in coming months.

Earlier this month, the Australian Energy Market Operator took control of the east coast energy market for the first time after days of volatility put several states at risk of blackouts.

Federal Energy Minister Chris Bowen supported the intervention, which ended last week, although prices are set to climb further in the coming months.

SPC chief executive Robert Giles said high energy prices would force the famed Shepparton cannery to raise prices if government support isn’t forthcoming.

“As an industry, Australian manufacturing must find a collective solution to the energy crisis for the benefit of Australian consumers and the broader community,” Mr Giles said.

“We encourage the Government to accelerate its push to oversee a rebuild of Australia’s manufacturing base to bolster local food security and build a more resilient local supply chain. “It’s about investment and it’s about technology.”

Mr Giles said Australian households would be hit with further inflationary pressures in the new financial year unless food manufacturers were thrown a financial lifeline.

“We risk coming to a cliff on energy prices if we don’t do something,” Mr Giles said.

“We ask the Government to work with us to find a solution in order to avoid further price increases of food products, acknowledging there is a breaking point when consumers can no longer afford it.”

The Federal Energy Minister is yet to respond to SPC’s call.

Nicholls MP Sam Birrell, the newly-elected federal representative for the Shepparton region, said government needed to offer assistance “where necessary.”

“SPC is, like many other food manufacturing businesses in our region, a significant employer and economic driver,” Mr Birrell said.

“The energy crisis is putting extreme pressure on these businesses, and that will be exacerbated as organisations come out of locked-in contracts in the coming months and years. “It is important that the Federal Government understand the importance of these businesses to the region’s population and to Australia’s ability to supply domestic and export markets with food, and offer assistance where necessary.”

In 2014, then prime minister Tony Abbott rejected a plea from SPC Ardmona for a $25m grant, despite calls from Coalition MP Sharman Stone and the Napthine Government.