With almost 100 stores across Australia, Safeway is the world’s biggest grocery retailer, but it’s not the only one.
It has also been one of the biggest losers in the global food price wars.
Key points: It was hit by the US’s latest round of retaliatory tariffs The Australian government is threatening to take action against the supermarket chain for its losses Source: ABC News | Duration: 00:52sec Background: Safeway’s loss from the US round of retaliation tariffs was $13.6 million, according to its latest annual report to the Australian Securities and Investments Commission (ASIC).
In November, the US slapped tariffs of 25 per cent on imports from Australia of $5.9 billion.
Australia retaliated with a 30 per cent tariff on its goods to $10.7 billion.
The government’s actions hit a wide range of sectors, including Australia’s meat industry, which is a major supplier of raw materials to the US, and the dairy industry, where Safeway makes its vast quantities of milk and cheese.
The tariffs hit both companies hard, with losses of about $4.5 billion.
In the US it’s estimated that about 60 per cent of the food is imported from Asia.
The company said it would have lost about $2.6 billion had it been a US company.
“The loss to us will be substantial, especially in relation to our dairy products and meat,” said CEO Tony Gilchrist.
“But we have a long history of paying a fair price for our food and our products are used in our own country.”
“This is the first time in a very long time that a major international food and food processing company has lost a significant amount of revenue in one year,” he said.
But that doesn’t mean the company is happy about the impact of the tariffs. “
Our position in the market is that we are the only major company in the world that uses the same quality of meat and dairy from our own cows and sheep, our own feed, our suppliers and our own facilities, and we also use it in our products.”
But that doesn’t mean the company is happy about the impact of the tariffs.
“We are disappointed that the US has been targeting us in the international marketplace,” said Mr Gilchrist, adding that it was “inconsistent with the international agreements that we signed with our partners”.
“Our goal is to maintain our business in the US and that’s why we continue to invest in our global supply chain and expand into the Asia-Pacific region.”
“In fact, our most recent order of $2 billion of beef was already on sale in the United States,” he added.
“That’s our commitment.
We are going to do everything possible to ensure that we continue our business here.”
Safeway also said the company would continue to work with the US government on an alternative way to deal with the tariffs, and it has also reached a new agreement with the USDA.
“With this new agreement we can move our beef production back to our existing supply chain to ensure the long-term health of our beef cattle,” Mr Gilcock said.
Mr Gilchews deal with US retaliatory tariff The company has been hit by retaliatory duties imposed by the Trump administration, which hit imports of US beef to Australia at $1.8 billion.
A similar tariff on Australian beef imports was levied in the same period, as well as retaliatory actions by the United Kingdom and Mexico.
The Australian Government has vowed to take more action against those countries.
“There’s no doubt that the actions of the US administration are hurting Australian businesses and they are hurting our farmers and the livelihoods of Australian farmers,” said Minister for Agriculture and Food and Fisheries Greg Hunt.
“What we need to do is to take a much closer look at the impact on our agricultural industry, our export industries and the health of the Australian dairy industry.”
A report released by the Australian Council of Trade Unions (ACATU) on Tuesday revealed that about 90 per cent the costs of complying with the retaliatory sanctions were passed on to farmers.
“In the case of the retaliating tariffs, we found that many farmers in Australia were forced to reduce their production, reducing their sales, their profitability, and in some cases their profitability and the number of employees they were able to hire, and they were also impacted on their margins,” ACATU chairperson Steve Liew said.
The ACCTU said that the new deal would help farmers in the region, but also “restore confidence in Australian agriculture”.
“In this way, the ACATUP and ACCTUP will support the continued growth and prosperity of Australian agriculture and help to ensure Australia remains the number one place for Australian-made products,” Mr Liew added.
The ACATUNS report said the “unilateral action” by the new US administration was “uncons