Australia continues to lose control of many of its best-known brands,
as foreign investors increase their holdings in our food, clothing and other
industries, according to figures for the last six months of 1997.
The figures in the latest AusBuy bulletin showed Australians paying out more
than $15 billion to foreign investors and lenders in the second half of 1997,
including dividends to the growing number of foreign-owned companies making
everything Australian from Vegemite to Tim Tams. Since 1990-91, overseas
interests with a stake in Ausralian businesses have earned $180.6 billion
in interest and dividends.
Mr Harry Wallace, the president of the Australian Owned Companies Association,
which produces Ausbuy guides and bulletins, warned that it was not enough
to simply try to buy Australian-made if the profits were going offshore and
fuelling Australia's current account deficit - totalling $133.8 billion in
the seven-and-half years to 1991.
He said foreign ownership levels in Australia were high compared with other
industrialised countries. He cited a 1995 Reserve Bank study, which found
that the level of foreign ownership in 1992-93 was equivalent to 16.3 per
cent of GDP, against 4.2 per cent in Canada.
The vexed question of foreign investment in brand-name Australian products
took another twist on Monday when the Japanese brewer Kirin bought 45 per
cent of New Zealand's Lion Nathan brewing group and a stake in the Castlemaine
XXXX, Tooheys and Swan breweries taken over by Lion Nathan almost 10 years
ago.
But while Australian icons as diverse and distinctively antipodean as Arnotts
biscuits, Driza-bones and Four'n'Twenty pies have fallen into multinational
hands, the Australian Consumers Association says it is more important to
consider whether the content and manufacture have remained local.
An association spokeswoman, Ms Gail Kennedy, said Australian-owned did not
necessarily mean Australian-made or sourced.
She said local companies may make and import goods from overseas, whereas
foreign-owned companies often relied on Australian labor and products to
be perceived as good corporate citizens.
The real question was whether patriotic consumers wanting to support Australian
jobs were able to make an informed choice standing in a supermarket aisle,
she said.
The Federal Government this month introduced legislation spelling out the
requirements for goods to be labelled Australian-made or Product of Australia
in an effort to clear up confusion, but Ms Kennedy said the distinctions
did not go far enough.
While an item must be almost 100 per cent local to be labelled Product of
Australia, goods can be labelled Made in Australia if at least 50 per cent
of production costs were incurred here and the product was substantially
created here. Simply stuffing teddy bear skins made elsewhere, for instance,
would not be enough.
But Ms Kennedy said that given its marketing value, the Made in Australia
label should include the words "from Australian and imported ingredients"
if the bulk were locally sourced, or "from imported and Australian ingredients",
with the requirement that at least one main ingredient be local.
Mr Allan Klepfisz, the chief executive officer of Advantage Australia, which
promotes an incentives program with redeemable points for buying Australian,
agreed the central issue was local jobs not foreign ownership.
Emotionally, people would like to think companies were Australian owned as
well as their products sourced and made here, Mr Klepfisz said. However,
the dividends paid to parent companies overseas by subsidiaries providing
jobs here was minimal compared with the level of foreign debt being serviced
by Australian companies.
Mr Wallace said any Australian who wanted to look after the future economic
wellbeing of the country should buy equivalent products made in Australia
by Australian-owned companies from Australian components.
"There may be a slightly different taste but if you are not prepared to put
up with a slightly different taste in order to do something for Australia,
then you are not a very good Australian," he said.