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Car handouts ’hindering FTA with China’

The Australian, Canberra

Car handouts ’hindering FTA with China’

By Damon Kitney

26 August 2013

The executive chairman of the company behind Australia’s top-selling cheese brand has warned that the Australian government’s support for the car industry is holding up a free-trade agreement with China.

Bega Cheese executive chairman Barry Irvin echoed the comments earlier this year of Visy Industries boss Anthony Pratt, when the billionaire questioned why the federal government was prepared to support a globally uncompetitive industry in cars instead of agriculture.

"Whilst it may not want to be talked about, in terms of how it impacts us getting a free-trade agreement, activity in that zone (car subsidies) is part of the reason why we struggle when we sit down and say, ’We want a free-trade agreement’. And they say, ’What about the subsidies and impediments you put on something like cars’," Mr Irvin told The Australian on the sidelines of the PPB Advisory agriculture conference.
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"We sit there in agriculture and say we are globally competitive. All we really want is a fair and free trade environment and governments willing to invest in globally competitive industries. And we see dollar after dollar going into an industry that is not globally competitive."

Bega is Australia’s No 1 cheese brand and the listed Bega Cheese now manufactures and distributes dairy products to Australian and international markets, including cheese, infant formula, cream cheese and general dairy ingredients, milk powder and protein.

It employs about 1600 people in its various operations and last week reported a 25 per cent increase in net profit to $25.4 million, sending its shares up almost 6 per cent.

Thirty per cent of its sales are now offshore, with 24 per cent in Asia.

Mr Irvin said a free-trade deal with China was "really important" for the sector. "We start in some cases with one hand tied behind our back," he said.

"We have felt genuinely frustrated that that has not been successfully executed."

Trade Minister Richard Marles warned earlier this month that Australia would not land a free-trade deal with China unless it overcame a xenophobic attitude to foreign investment and revealed it still faced significant hurdles in getting access to sugar and wheat markets. Mr Marles, who replaced Craig Emerson as trade minister last month, said talks over the free-trade deal with China had become bogged down and a "more pragmatic and flexible approach to issues" was needed to achieve a breakthrough.

Mr Irvin also backed industry calls for the incoming government to appoint a "national champion" to help solve problems and push the cause of developing Australia’s food and fibre industries.

"We have heard significant rhetoric around food but we haven’t seen it given the priority in government that, say, the mining industry might have got years ago when they saw it as the big opportunity," he said.

"Market advantage speeds up and if you miss the opportunity to get in, someone else will.

"We want a priority around innovation, regional development, infrastructure.

"The more that you can link trade, infrastructure, agricultural issues into a direct line (in a ministerial portfolio), the more it obviously helps."