THE grocery industry has sided with the Coalition's claim the Rudd government's emissions trading scheme will be a big tax.
Environment Minister Peter Garrett said yesterday that claims by the Australian Food and Grocery Council that food prices would be pushed up by 5 per cent overstated the reality by seven times. "The Treasury modelling found that in 2013, the average price impact of the Carbon Pollution Reduction Scheme on food bills will be around $68 a year -- less than 1 per cent of household food bills," Mr Garrett said.
However, the council chief executive Kate Carnell said this was not realistic, given the role of electricity in the processed food supply chain. "The average shopping basket is about $200 a week, so the government's modelling suggests a barely 0.5 per cent increase off the back of increases in electricity prices of 20 to 40 per cent. That is not even vaguely credible in a manufacturing industry," she said.
Her estimate of a 5 per cent rise was based on internal modelling by food companies. She said the modelling had been presented to Coles Myer and Woolworths. "They didn't suggest we were off the money," she said.
Mr Garrett said that throughout the debate on climate change, "various industries have paid for modelling designed to suit their lobbying purposes".
A spokesman noted that Woolworths had rejected the council's claim of a 5 per cent rise when it was first presented in August. The company had put out a release in response, declaring its support for theemissions trading scheme, and noting that the exclusion of agriculture would reduce what was only ever going to be a "slight price rise". Woolworths is a signatory of the Copenhagen Communique on Climate Change, a document developed by global corporations and endorsing ambitious emission reduction targets. [Woolworths is obsessively "Green" in many ways]
However, the grocery council's renewed attack on the scheme highlights the Coalition's support base among industries which believe they will be adversely affected. Ms Carnell said baking, dairy and tinned processed food, such as canned spaghetti, were the most energy intensive parts of the food industry.
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