The chief of Australia’s largest fresh produce grower is calling on the Albanese government to help open up international export markets as it grapples with an oversupply of avocados.
Retail avocado prices have plummeted due to excess supply and has seen Costa Group’s revenue from its avocado business fall by 16.4 per cent in the first half of 2022. The company suffered a non-cash $2.2 million goodwill impairment as a result.
Costa Group’s avocado business is getting smashed as an oversupply has led to decade-low retail prices.Credit:Joe Armao
Costa chief Sean Hallahan is now calling on the federal government for assistance in gaining greater access to the Japanese market as a “matter of urgency for the greater good of the avocado industry”.
The Japanese government only accepts Hass avocados from areas officially recognised to be free of Queensland fruit fly. This means that only avocados from Western Australia, Tasmania and parts of South Australia can be sold to Japan due to the restrictions, but not avocados from Queensland or NSW.
“It is vitally important for the new Albanese government to prioritise export market access for horticultural products into key markets, most prominently Japan. A whole of government approach is needed to gain access to Japan for eastern seaboard grown avocados,” said Hallahan.
“If this can occur … it will provide Australian avocado growers an opportunity to supply the Japanese market on an almost year round basis, something that no other country can do,” Hallahan said.
“Disappointingly, this is an opportunity that through lack of urgent action continues to go begging.”
The federal government has been contacted for comment.
Costa’s avocado business was unprofitable last year, too: in 2021, revenue fell 21.7 per cent, after which Hallahan encouraged the Australian public to “get out there and tell your friends to … order the odd smashed avocado breakfast”.
Overall, Costa’s group recorded a 10.8 per cent increase in underlying net profit after tax to $49.2 million, while total revenue rose 15.7 per cent to $708.7 million compared to the first half of 2021.
Growth was primarily driven by international footprint that has grown by 768 per cent since 2015, with revenue from China up 34.3 per cent compared to the previous corresponding period.
The ASX company expects avocado industry conditions to remain challenging for the rest of 2022, although avocado prices are expected to increase somewhat.
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