Rolling strikes smash Australia’s food sector as food prices rise

Industrial action is roiling Australia’s food industry, which is in the midst of an inflation crisis. The cost of staple foods has increased by over 10 percent in a single year.

Experts say that the rolling unrest is disruptive but unlikely to have an impact on the prices for the majority of consumers at the checkout.

In September, United Workers Union (UWU) members protested at ASX listed Ingham’s poultry plants in South Australia as well as Western Australia.

Ingham’s provides chicken to major brands like McDonald’s and KFC, and KFC issued a statement assuring its customers that it had implemented “contingency planning” to ensure supply.

The strike was ended by a new enterprise contract between the union and the poultry producer, which included a pay increase of 13.12 percent over three years.

Bega workers in Penrith, a western Sydney factory of the company, walked out just days later.

Bega is known for its products like Dare Iced Coffee and Bega Cheese. The strike has caused a temporary shortage of the popular cold drink.

Five days of processing plants. NCA NewsWire / Emma Brasier

Retail and Fast Food Workers Union (RFWU) members from supermarket giants Coles, Woolworths, and 10m walked out of work for two hours to protest “poverty wage.”

The RAFFWU claims that the Coles and Woolies workers are being paid poverty wages – among the lowest in Australia.

They work in an unsafe environment where harassment, abuse, and assaults are commonplace. Their jobs are also at risk.

The first national strike in Australia affected stores across the country, including NSW, Victoria, and Queensland.

Coles spokesperson said that the company does not expect any impact on customers due to the strike.

Tens of thousands of team members continued to serve customers across our stores. Coles employees across the country took part in the Saturday stop-work action.

A spokesman for NCA NewsWire said that Coles has met with the bargaining representatives regularly and is committed to negotiating a fair agreement for all.

“Coles continued providing above-award working conditions under our current Enterprise Agreement and passed on to our supermarket staff members the 5.75 percent annual wage increase that the Fair Work Commission recommended in July 2023.

“We contest misinformation being spread by the bargaining rep, which isn’t a registered union and represents only 0.34 percent of our 120,000-person workforce.”

Woolworths said that only 300 employees out of 132,000 were expected to participate in the walkout.

The industrial action is concentrated just weeks after the Australian Bureau of Statistics announced a significant rise in food prices from 2022 to 2023. This was part of an overall cost of living crisis that has been affecting Australians.

Some items have skyrocketed more than 10%.

Dairy products and bread and cereals have been up 11.6 percent since mid-2022.

John Quiggin, a professor at the University of Queensland, said that external market forces were responsible for the price spike.

He said that the prices of wheat and dairy products would reach very high levels by 2022.

“Since Australia is a global trader, this information gets passed on to Australian consumers with a delay.

Prices have fallen for most of this year. We may hear better news in the near future.

The strike by Coles and Woolworths will not impact grocery prices, he said. Even if wages increase significantly, the strike won’t affect the majority of consumers.

He said that “short strikes, such as the two-hour stoppage of supermarket workers, will not have much of an impact on supply chains.”

“Supermarkets pay wage costs, and they represent about 20 percent of the price faced by customers. So, even a big increase in wages won’t make a significant impact on prices.

Supermarkets are able to absorb a rise in prices due to their high-profit margins.

Gary Mortimer, a QUT professor of marketing and consumer behavior, said that long-term food strikes could affect prices. However, the industrial action which has been taking place in Australia since the spring will not have any impact.

He said that it would be necessary for workers to strike at all suppliers and producers for several months.

He noted that the food industry has multiple suppliers.

He said that other sectors, such as the airline industry, which has a small number of major airlines, are more vulnerable to strikes.

Coles and Woolworths have been asked to explain how they maintain food security in spite of industrial unrest. However, neither company has provided an official response.

Alison Preston, University of Western Australia economist, expects the inflation rate in this sector to slow down in the next few months despite the sharp rise in food prices and the spread of unrest.