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Concentrated Supply Chains Driving Up Prices - NFF

Concentrated Supply Chains Driving Up Prices - NFF

(23 June 2022 – Australia) The President of the National Farmers’ Federation (NFF) has declared that Australia’s highly concentrated supply chains are the main driver of elevated produce prices.

Flooding and unseasonably cold weather across the eastern seaboard of Australia has severely exacerbated supply chain snarls still firmly locked in place from COVID lockdowns which are only compounding “very, very concentrated supply chains” according to NFF President Fiona Simson.

Farmers are feeling the pressure from rising power bills which are being passed on directly in the form of higher retail supermarket prices “at the till”. According to the NFF almost three quarters of all Australia’s groceries are sourced through two major supply chains (70 percent) and 90 percent can be traced back to four major chains.

“Big is not bad, we definitely need the size of these chains to deliver produce to many of the people in our cities and all around Australia. But it’s also not very agile when there are impacts on particular parts of the chain, like a shortage in a particular area” Simson commented.

“Australia is, you know, a little bit unusual. When we compare ourselves to somebody like the UK, for example, with nine major supermarket chains, with over 500 stores each without getting down into the independents. Following COVID, the supply chains have been completely disrupted. Again, we are dependent on a lot of overseas markets for some of those things.”

How long do Australian corporates expect disruptions to last? What response are they expecting from their Banks and what measures are they taking to alleviate crippling constraints? East & Partners Global Insight Report Digitising & Greening Global Supply Chains is available now, contact us for research access.

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