Exactly what does it mean to be “Australian-made”? The answer may surprise you!
Exactly what does it mean to be “Australian-made”? The answer may surprise you!
The green and gold “Australian made” logo is trusted not only in Australia, but globally. Horizon Consumer Science research found that 97% of overseas consumers have a positive first impression of products that have the logo. 85% were confident that products carrying the Australian Made logo were genuinely Australian.
But what exactly does “Australian made” mean? The answer is surprising!
If something is grown or produced in Australia, then it’s obviously Australian made.
But if it contains imported parts, things are less clear.
The ACCC states that things need to be “substantially transformed” in Australia, which means they are “fundamentally different in identity, nature or essential character from all of their imported ingredients or components”.
Changing the form or appearance of imported components is not seen as a “substantial transformation”. Eg Putting oil in a capsule is not enough.
To add to the confusion, the Australian Made logo now has a few variations…all with different definitions, eg Australian made, Australian grown, Product of Australia, Australian seafood, Australian, etc.
But rather than worry about what proportion of a product is Australian made, I believe that to keep it simple our goal should be to maximise and grow the Australian proportion of any product. More Australian Made is better than less of it and over time supporting Australian Made will grow the Australian manufacturing sector and the Australian economy.
Food industry is the “Canary in the Coal Mine” for Aussie Manufacturing
Food industry is the “Canary in the Coal Mine” for Aussie Manufacturing
Global food shortages, including in Australia, are increasing as onerous sustainability and ethics policies, combined with increased energy costs start to bite. In a country like Australia, a net exporter of raw materials including those for food production, how is that possible? The answer is that for far too long the Australian government has failed its manufacturing sector. Instead of maintaining and developing local capability the government has favoured free trade agreements and golden handshakes with foreign powers who may not care if every day Australians have the foods, goods, and services that we need to live life well. Consequently, Australia’s manufacturing footprint has shrunk to record lows and as a percentage contribution to employment it is the lowest of all OECD nations. The solution is immediate and lasting policy changes to support and grow Australia’s sovereign manufacturing capability.
The good news is that its already happening! Demand for Australian made is at record highs and the instability of international supply chains had sparked a change of attitude in the government; with the Morrison government spending 1.5bn and the Albanese spending 15bn to develop Australian manufacturing this presents a significant opportunity for local entrepreneurs and businesses.
To find out how you can join the new wave of Australian manufacturers bringing products to market click on this link to find out more: https://howtobuyaustralianmade.com.au/
Punching above our weight is a national pastime!
Punching above our weight is a national pastime!
Australia is head and shoulders above other countries in a bunch of areas:
- With only 0.33% of the total world population we are 55th in terms of population size yet we are the 13th largest economy
- Right now Australia is ranked number one at the Commonwealth Games with 71 medals (including 31 golds), ahead of it’s nearest rival and host of the games, England, which has 54 medals despite having more than double Australia’s population
- When it comes to primary production, Australia is globally recognised as best in class for meat, sugar, dairy produce, and fruit, and of course mining
- And in manufacturing, Australia is a world leader in solar technology (eg Adelaide solar panel manufacturer Tindo), cutting edge medical research (eg vaccine development at University of Melbourne and Griffith University in Brisbane), and producing innovative, eco-friendly and sustainable products.
We know we’re world-class when it comes to swimming and its great to know that Australian Manufacturers, entrepreneurs and innovators and products are world-class in these other areas too!
Here's why Australian products are world-class when it comes to quality
Here's why Australian products are world-class when it comes to quality
We often hear that Australian products are higher quality than cheaper imports. But is that actually true? And if so, what drives the higher quality? There are three main reasons Australian products are such high quality:
1. Higher quality and safety standards – Australian manufacturers are required to meet some of the highest quality and safety standards anywhere in the world. Yes this translates into slightly higher costs, but this is offset by lower returns, and more durable, longer-lasting products. In other words “you get what you pay for”.
2. Better labelling laws – Australia has strict laws about what you can and can’t say on your labels. This includes mandatory information (eg country of origin), and claims you’re able to make about the benefits of a product. Australian Consumer law (and its enforcement) minimizes false advertising, so manufacturers can’t “over-promise and under-deliver”. There are also strict laws governing warranties and refunds.
3. Highly skilled workforce in key manufacturing areas – Although manufacturing in Australia has declined as a % of GDP over the last 60 years (6% of GDP today, vs 25% in 1960), Australia excels in terms of skills. The Australian manufacturing workforce is world class in many areas.
As a result, Australian consumers can buy Australian Made products knowing they will be fit for their purpose, and safe for use. The likelihood of returns (and the associated costs) is lower, and if it is needed, the process of returning or repairing goods is simpler when dealing with local manufacturers.
Due to stricter regulations and higher standards here in Australia, when you buy Australian-made you know that you are in investing in something that is made to last. Australia has a reputation for manufacturing and producing some of the highest quality products in the world. Australian-made products are manufactured up to the standards and no
The demand is there for Australian-made…now let’s grow the supply!
The demand is there for Australian-made…now let’s grow the supply!
A survey by Power Retail this month of 1,000 online shoppers shows that 96% buy Australian made goods when they are available.
But what was most interesting were the things that DETER people from buying local.
Forty percent of people surveyed said they would buy imports if they were cheaper.
But a combined 42% said the only thing stopping them buying local was that they couldn’t get the products they want locally.
Now given that there are over 90,000 Australian manufacturers, across the full range of manufacturing capabilities, this is surprising.
Perhaps rather than a SUPPLY problem it’s an AWARENESS problem.
Retailers of locally made goods need to (a) be more visible with their marketing and (b) make sure they promote the fact that they are Australian-made. Because it’s certainly a huge part of the buying decision for consumers.
It's not all doom and gloom for Australian manufacturers!
It's not all doom and gloom for Australian manufacturers!
Labour shortages, supply issues, increasing costs of electricity and raw materials, growing inflation…it looks like a tough time for Australian manufacturers. But amid the gloom and doom, the new Federal government has introduced two measures likely to help:
1. Labour has committed $15 billion for the National Reconstruction Fund. This supports the key areas of Advanced manufacturing, clean energy, artificial intelligence, agriculture and food. This is ten times what the Coalition pledged under the Modern Manufacturing Initiative
And second:
2. Labour has just doubled the procurement that federal government departments must source from Australian SMEs – up from 10% under the Coalition, to 20%. This amounts to $14 billion a year and is part of Labour’s Buy Australian Plan.
It’s now up to local manufacturers to rise to the challenge, and find clever, creative ways to overcome the hurdles and take advantage of these new opportunities.
Will rising electricity prices affect Australia’s competitiveness in manufacturing?
The wholesale price of electricity is up 141% in Q1 2022 compared to Q1 2021.
That directly increases the cost of electricity for manufacturers.
So will this increase make Australian-made goods less competitive on the world stage?
In short – no. That’s because increasing electricity prices are not just an Australian problem. All countries are experiencing similar increases. The World Bank is forecasting a further 50% increase in electricity costs worldwide in 2022.
Australia’s electricity prices are ranked 28th out of 38 OECD nations, meaning our electricity is lower than many competitors. And electricity prices in South East Asia are only slightly lower, and rising more rapidly than Australia’s.
The main causes of the increased electricity prices in Australia are a reduction in global supply of coal and gas due to the war in Ukraine, and Australia’s coal generators (responsible for 75% of Australia’s energy generation) aging, with about 30% of them offline.
The advantage that Australia does have, is that we produce more than enough coal and gas right here. But Australia is a net exporter of coal and gas – meaning we send most of it overseas, and then have to buy it back at international prices. While not a quick fix (we can’t just cancel export contracts), Australia at least has the foundation for becoming independent of global forces when it comes to electricity prices – and making our manufacturing sector even more competitive.
To find out more about making Australian made products or sourcing inventory from Australian manufacturers join us at our next free workshop! You can find out more here: https://howtobuyaustralianmade.com.au
6 reasons why Amazon Sellers are in for a SHOCK and what YOU can do about it
COVID has caused many raw material suppliers in Asia and globally to run short in labor. All the workers were sent home (reduced supply) and have found other ways to make money.
Rehiring labor is more expensive than ever before. Production costs are climbing. Many factories are refusing orders as they try to re-hire staff at increased rates.
Because of this and freight delays 66% of Amazon sellers are experiencing inventory shortages and delays.
Meanwhile in the west…
COVID has caused a record increase in online sales as customers change their spending habits and this increased ordering has exceeded the available freight
(increased demand)
Amazon is limiting inventory into warehouses as they are onboarding hundreds of thousands of US, Indian and Chinese accounts, increasing competition on the platform and limiting capacity in warehousing.
99% of global cargo is contracted, sea freight is undersupplied, and air freight is choked as flights are still grounded.
Freight prices have climbed consistently for the last 18 months killing the profitability of many Amazon businesses. In the last 2 years the cost of freight has increased over 400%.
Industry experts and economists explain there is no easy fix and expect this to continue for at least 2 more years as people have changed working habits, travel habits and spending habits. Until this returns to normal the expectation that the problem will remain.
So how is it that my businesses continue to post record profits and are completely unaffected by Amazons changing rules, freight delays, increased costs and inventory shortages? Let's find out...
Is it really possible to find Australian Made goods at Asia competitive prices?
There are many reasons why Australian Made goods are experiencing a return to globally competitive pricing.. today we take a quick look what has happened to the freight industry over the last 18 months and how the increased costs and long delays in delivery actually present a significant opportunity to buy and sell locally made goods! You can learn more for free at one of our 1 day workshops. Follow the link to find out more:
https://howtobuyaustralianmade.com.au/
Importing for Profit Magazine
