In his keynote address at The Australian's Global Food Forum in Sydney this week, executive chairman of packaging giant Visy, Anthony Pratt, said an FTA with the UK is a key step in growing Australian food exports.
And Anthony Pratt is putting his money where his mouth is, announcing that the Pratt Foundation has made a $500k donation as founding patron of the Australian/UK leadership dialogue, which will work to promote a free trade agreement with the focus on Australian food exports.
Visy and The Pratt Foundation have been supporters of The Australian's Global Food Forum since its inception in 2013, with the aim of starting a national conversation about how to double Australia’s food exports.
Pratt said that since 2013, food exports have increased from $31 billion to $42 billion in 2017, a 35 per cent increase, and in that same time, iron ore exports have declined from $69 billion to $63 billion... thus the now familiar phrase 'moving from a mining boom to a dining boom'.
“We set out to double export value by exporting more high value food into Asia’s three billion people coming into the middle class.”
He shared a graph that showed that since the conversation started in 2013, Australia's exports of high value horticulture, like fruit and vegetables, and further processed food, like packaged meat, have grown from $17 billion to $28 billion, while its exports of bulk commodities, like wheat, grain and live cattle, have stayed at around $8 billion.
VALUE-ADD FOR GROWTH
The growth lies in exporting value-added products, Pratt emphasised
“We value add in two ways: by selling more added value horticulture, like mangoes, and, secondly, by taking our farm products and processing them into further processed added value food like infant formula and beef cuts, processed and packaged right here in Australia which creates manufacturing jobs right here rather than exporting the jobs to other countries. And that’s why our slogan is, 'Export food, not jobs',” Pratt said.
“For when you sell wheat as wheat, you get $200 a tonne for it; if you turn it into flour, you get $500 a tonne for it; and if you turn it into bread, you get $5000 a tonne. And this applies to things like snap freezing vegetables or table-ready meals.”
He went on to note that one of Australia's biggest selling points is the safety of our food.
“There are very few countries with a food safety record of Australia, especially if you compare it to incidents like the melamine in milk scandal that killed Chinese children.
“Our safe brand ensures that the high value exports like Australian infant formula will boom in China no matter how many cows we ship there.
“Australia has a great opportunity to feed a hungry world. We have a small population in Australia and huge resources so export is key. As Steve Jobo said recently, 'More than half of last year’s GDP growth in Australia came from exports'.”
"So free trade agreements are valuable and our FTAs from Japan and Korea doubled exports of sugar and confectionery, fruit and nuts and vegetables here."
He showed another chart to illustrate that when Australia signed the China FTA, food exports to China went up by 42 per cent; fruit and nuts tripled, fish and beverages doubled.
“So it’s fantastic, for example, to see Fonterra invest $100 million in an export cheese factory in Melbourne. Half of all the pizzas in China have Fonterra mozzarella on top of [them].
“Manbulloo Mangoes is expanding in north Australia because since the Korean FTA, mango exports are up 10 times. Bega Cheese exports $300 million worth of Australian cheese when it used to be zero. And Ferrero’s factory in Sydney ships 11,000 tonnes of Nutella to Asia.
“For Asia, our countercyclical climate makes food even more valuable. Summer fruit is available in their winter so in the last two years of the FTA with Japan, Australia’s seasonal exports of fresh grapes increased 50 times," he said.
“Which brings me into my second point. We should have a free trade agreement with Great Britain, especially 30 now that it’s coming out of the EU."
Pratt argued that Australia and Britain had a great trading relationship for about 100 years, but this waned in 1972 when Britain joined the European Union and that was almost the end of our food exports to Britain.
"I’m so convinced of this that The Pratt Foundation is donating half a million dollars as founding patron of the Australian/UK leadership dialogue, which will work to promote a free trade agreement with the focus on Australian food exports."
This donation complements the $500,000 given to to the Indonesia study centre that Pratt Foundation established, also to support a favourable FTA with Indonesia.
Pratt said that when it comes to growing exports, there is no room for complacency as other low cost producers are eying the same global growth markets.
"The facts of modern business mean that our farmers and food processors will need to fully grasp and exploit the latest innovations to remain competitive and to overcome traditional barriers to food growth."
