Minister for Trade and Tourism, Don Farrell: Thank you for joining us today on this beautiful autumn day in Adelaide here at Banquet Foods with my very good friend Don Totino.
Don Totino, Banquet Foods: Another Don.
Don Farrell: Two Dons. Actually three Dons around the place these days. But we're here to talk about a new program that the Federal Government has established to assist Australian importers and exporters, like this wonderful business here on Port Road, navigate the changes in the world situation right at the moment. We're launching the Trade Resilience Service. This will be a service provided by Austrade to Australian importers and exporters to try and work out the best ways of dealing with the challenges that we are now faced with because of the issues in the Middle East. Don was just telling me a couple of moments ago that in order to get some of these wonderful products in from Italy, it used to take two or three weeks in a ship, now it can take longer than two months. So our service will try and connect businesses like Don's with the most efficient way of getting your product, whether it be from Europe or the Middle East here to Australia. We've managed to succeed in getting new free trade agreements, particularly with the United Arab Emirates in the Middle East, India, UK and all of those products, one way or another, come through the Middle East. We've now got to find new ways of getting those products into Australia until such time as hostilities end in the Middle East. So we want to make sure that Australians continue to be able to export their wonderful food and wine products. That's particularly important for South Australia, but also for companies like Don Totino, that they can get their imports into Australia and Australia can have access to the wonderful food and wine from Europe. Two weeks ago, I signed a free trade agreement with the Europeans. That's going to be a fantastic boost to the Australian economy in particular but also for South Australia, $10 billion in the first year of new sales. Of course, that's all predicated on your ability to transport those products from Europe to Australia and from Australia to Europe. So, this new trade resilience services run by Austrade will be one way in which the Federal Government will be assisting Australian importers and exporters through this difficult time. Now, I might throw to Don to say a few words.
Don Totino: First of all I'd like to thank you for trying to help. Definitely try to thank you for trying to help. What is interesting is that you not only help the people that import goods also the people that export goods, which is very good. For us I mean, we export and we import. We import much more, unfortunately, that you can see around much more than what we export. But what this government does not only did for exporting, also for importing, which is very, very important. Like Don said, we used to pay four years ago, five years ago, for a container, used to be around €2,000 and now it's up to €4,000. We got a note from the shipping company that will go up again. Who knows how much will go up. And this program they just launched is going to help all of us, which is very, very important.
Journalist: How does the current issues in the Middle East change your business, is it delaying it by a few weeks?
Don Totino: Definitely. Definitely. We don't know. Is unknown because you know yet the ship that they're leaving. We don't know how long it will take so is unknown at this stage, but definitely interrupt our business. And of course goods will go up. Things will go up. There will be while it was easier before to bring products in now is difficult. And of course it will go up because of shortages.
Journalist: Will that mean bigger prices for consumers at the end of the day?
Don Totino: Definitely that. That's what unfortunately is. If you pay more, you know, it's only so much and so much you can absorb. So definitely will go up. We got to pass it on.
Journalist: That issue with the containers, did that happen purely with the issues on the straight up in the Middle East? Or did that happened before that?
Don Totino: That happened. What happened is it went up through COVID and of course then the shipping company, they're supposed to bring it down. They did bring down a little bit, but on the March. And now we got a note sat it will go up again.
Journalist: So, it went from two before COVID to four after COVID and now…
Don Totino: Yeah. Up to five, then it went back to about four, now we'll go up again.
Journalist: How difficult is that for you and your regular customers?
Don Totino: Well, like I said, that's why people complain that things go up. You got to pass it on. You can't. When you. When you talk about €2,000, the exchange rate these days, it is almost $4,000 extra container. So, you know, if you got. If you got 1,000 cases, you got to, you got to allocate so much per case. That's a cost. Yes.
Journalist: And what about the other way? How's it going getting your wine…
Don Totino: It's exactly the same because the shipping company, they're like the bank. So, like make a lot of. That's a very good, very good, very good publicity for the bank. So, they charge. They used to be very. Because it wasn't that much cargo go back. Now it's fair bit of cargo go back. So, it's exactly the same.
Journalist: Are you having to change the way, you know, the amounts that you're making? Are you using the grapes in other ways or.
Don Totino: No, no, you don't change. I mean, you do exactly the same. Talking about grapes, we've got a huge surplus of grapes in this country. So, therefore we need to export. We need. We've got to help you to export. You've got to cut your margins. Some wines, we give it away at cost just, just to make sure you get rid of it.
Journalist: With the delays and the cost of everything going up, if you don't mind me asking, are you recording any losses at all?
Don Totino: Well, a lot of time. Well, I mean, when you're in business, it's got a deadline you going to lose. But you try not to lose but you don't make as much money they used to make before.
Journalist: In terms of your exports has that been much harder with the war?
Don Totino: Look, the war has only happened not long ago, so yes, we haven't seen the impact, but definitely it would be if this continue would be harder, yes.
Journalist: What assurances has this new resilience service given you? What will they be doing on the ground to help get the goods to and fro?
Don Farrell: I might answer that one.
Journalist: I want to hear what assurances have you been given?
Don Totino: Well put this way, this is new to me like it is to you. So, I believe that it's $50 million or $20 million?
Don Farrell: So, the government has committed a total of $50 million to try and diversify our trading relationships. We started that when Donald Trump introduced his so-called Liberation Day. With the new problems that have emerged in the, in the Middle East, we're going to divert some of that funding to ensure that Australian, great Australian companies that want to export their goods are going to be able to find a way of doing that. The trick here is if a particular route has closed because of problems in the Middle East, you've now got to find a new route to get your product to market. What this system will do is in real-time look at alternative ways of getting your products into that market or bringing the products to Australia. This is a skill that Austrade has and we're going to make that available to all importers and exporters who want to take advantage of.
Journalist: How does that differ to previously? Was Austrade not there already doing that?
Don Farrell: Look, Austrade would have done it for individual companies. We're ensuring that this project makes it available to everybody who wants to do importing and exporting, particularly at this time of trouble in the Middle East.
Journalist: And is targeted financial support for small medium exporters on the table, especially for those that are dealing with this, doubling in some cases shipping costs?
Don Farrell: Right today, we're just dealing with this resilience program. What might come into the future no doubt the Treasurer will be dealing with those issues.
Journalist: Sure. And are you concerned about Qantas yesterday? They announced they were cancelling a number of flights, particularly in South Australia. Some regional routes have been parked. Are you concerned about the impact that will have on the state and broadly, internally shipping things around the country and also getting it out of the country?
Don Farrell: Look, I think what Qantas has done is cancelled one particular route. That's the route from Adelaide to Mount Gambier. That is particularly concerning for a range of reasons, not just in the tourism space, but also the ability of people in Mount Gambier to get to Adelaide and vice versa. Our objective at the moment is to try and find access to all those fuels that we need to keep those services running. Tomorrow I'm flying to Singapore to have further discussions with the Singapore government about getting greater access to those fuels. And of course, as we know, the Prime Minister's in Brunei and Malaysia with the Foreign Minister. We're doing everything we can to ensure that we get access to all of the fuel that we need to keep this country going. We've seen already the prices go up of fuel, but it's going to be most important that we get access to this fuel. One of the bodies that I look after is Export Finance Australia. We have now dedicated $2 billion to trying to ensure that where an Australian company, can find oil, diesel, airline fuel on the international market, we can have an opportunity to purchase that. So as a government, we're trying to do everything that we can to get us through this difficult time until these hostilities end.
Journalist: The IMF is warning of a possible global recession, obviously this is a first step to help local exporters. Are you looking at other ways to help local exporters?
Don Farrell: Look, I think there'll be a range of things which the government will deal with. This is one really practical way that we can assist right now, today, Australian importers and exporters to get their products into the rest of the world.
Journalist: What other things are you going to do to protect exporters?
Don Farrell: Well, we've done this thing today. I've mentioned already the fact that we have made funds available to purchase fuel. That's going to be important for importers and exporters.
Journalist: Over to you, Don, just for context.
Journalist: Okay, I just have one more for Don Farrell. Do we have enough fuel supply to June?
Don Farrell: To?
Journalist: To June.
Don Farrell: Well, we certainly have enough fuel supply for the moment. As I say, Export Australia is working with the Australian importers of fuel to ensure that we continue to have access to that fuel. And as I mentioned, I'm going to Singapore tomorrow to continue the discussions about getting access to additional fuel.
Journalist: How many years have you been in business here for? And is this the hardest time that you've actually experienced as a business owner of apart from COVID?
Don Totino: Yes, this is hardest time. I started 6th of July, 1978, before you were born.
Journalist: And sorry, just with this new resilience service launched. So yesterday you were having issues getting your stuff in, who could you call? And now do you have like better communication lines through Austrade?
Don Totino: Yes
Journalist: How does it change from yesterday to today with this new service?
Don Totino: I'm quite sure it's much easier. So that's whatever they give, so they give you 10 per cent of the freight, 20 per cent, and of course it makes it much easier.