Research Reveals $1.2 Billion Profit from Food Waste

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Australian food retailers make $1.2 billion in profit each year from selling food that households waste, according to new research from The Australia Institute.

This profit means that the major food retailers, such as supermarket duopoly Coles and Woolworths, have a strong incentive to delay reforms that would reduce food waste.

Progress has been slow on reforms such as removing ‘best before’ dates from products that do not need them, and Australia looks unlikely to meet the goal of halving food waste by 2030.

Key points:

  • The 2021 National Food Waste Strategy Feasibility Study found Australia wasted 7.6 million tonnes of food a year, equivalent to 152 Sydney Harbour Bridges
  • Households wasted food worth $19.3 billion in 2018-19, or an average cost of between $2,000 and $2,500 per household
  • Calculating the average food retail industry profit at 6%, Australia Institute analysis has found supermarkets are making $1.2 billion annually from wasted food
  • This provides food retailers with a strong incentive to delay reforms that would reduce food waste, such as changes to ‘best before’ and ‘use by’ date labelling, as recommended in the National Food Waste Strategy Feasibility Study
  • Australia Institute polling shows strong support for policies that would reduce food waste, including labelling reform (78% support), relaxed cosmetic standards (72%) and kerbside collection of food waste (75%)

“We know how to reduce food waste, but the supermarkets have $1.2 billion reasons to delay reforms that would reduce this profit,” Australia Institute Senior Economist Matt Grudnoff said.

“Labelling reforms would help reduce food waste, but companies like Woolworths insist such discussions ‘are in their infancy,’ years after being proposed.

“Whether the food is consumed or wasted is beside the point as far as supermarkets are concerned. But reforms to reduce the amount of food people purchase – and in turn waste – will inevitably lead to reduced profits.

“The government should pick a side – are they trying to help consumers or supermarket profits? If they are serious about tackling the cost of living crisis they should be helping consumers with one of their biggest hip pocket burdens – groceries.

“It’s high time for the government to act on food labelling reform and the other recommendations of the National Food Waste Strategy Feasibility Study. It proposed removing ‘best before’ dates from products that do not need them, scrapping ‘sell by’/’display until’ dates and extending allowable ‘use by’ dates for long life products.

“If that means trimming the profits that Coles and Woolies make from food waste, well that’s a price I think most Australians would be happy to pay,” Mr Grudnoff said.

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