It’s crunch time for the maker of Cheezels, CCs, Kettle and Thins chips as greedy multinational gas companies spoil the party and put the bite on yet another Aussie business.
AWU members at Snack Brands in Western Sydney are feeling the pressure, with the company gas bill tripling – from $3 million to $9 million a year – leading them to plead for the Federal Government to hurry up and help.
The soaring bill equates to an extra $170,000 a week for Snack Brands, which employs 600 workers at its Blacktown and Smithfield sites.
It came about almost overnight when the company’s existing contract was torn up after the out-of-control gas market sent its original supplier broke, with the chip maker now buying gas at massive global market rates.
Snack Brands says the price rise is too big to absorb and will be passed on to consumers, in what is a growing list of businesses hit hard by gas price gouging.
Just this week, Solaris Paper, which makes Sorbent toilet paper and employs more than 300 workers in Sydney and Melbourne, said it faced a 290 per cent rise in its gas bill.
And Qenos, which makes household plastics such as bottles and cling wrap at its Sydney plant, was hit with a $70 million gas bill, and warned it will be closer to $150 million next year.
AWU ³Ô¹ÏÍøÕ¾ Secretary Dan Walton said Snack Brands was .
“We pay some of the world’s highest prices for our own resources,” he said. “It’s a crazy situation.”
“We are the only gas producing nation in the world that does not have a mechanism in place to protect Australian businesses and residents from high prices.”
Mr Walton making sure there is enough gas at the right price for Australian businesses.
“Gas companies are laughing all the way to the bank as manufacturers across Australia struggle.
“We need urgent action to save tens of thousands of jobs, before it’s too late.”
The AWU has put forward five simple steps that can be taken without legislation that would provide immediate relief to manufacturers and households.
The steps include a gas price cap enforced by the Australian Competition & Consumer Commission, in the same way it sets a maximum price for retail electricity, and putting the gas industry code of conduct “in the hands of the ACCC, taking it from a toothless paper tiger to an enforceable set of rules to rein in cartel conduct by the gas industry”.
The AWU also recommends inserting a trigger into the Australian Domestic Gas Security Mechanism (the “gas trigger”) so that exporters must divert more product to the domestic market when a price point is reached. At the moment it must only guarantee adequate supply.
And it suggests cracking down on gas exporters, “who game loopholes in the heads of agreement by only making short-term offers for uncontracted gas, and instead of ensuring that offers are long enough to give confidence to manufacturers”.
The urgency of the issue was also highlighted by AWU delegates representing workers from a range of energy-dependant industries who went to Canberra recently to tell the Government how the energy crisis is affecting their employers and putting their jobs at risk.
All their employers are at risk of closing if they are can’t to get affordable long-term energy contracts.
Mr Walton said the delegation was well-received, and the message was getting through to those in power, but the AWU was now pushing for an outcome by the end of this year.
