Topics: Impact of coronavirus on supply chains and industry
Speakers: Minister Andrews, Russel Zimmerman – Executive Director of Australian Retailers Association and Elizabeth de Somer – CEO of Medicines Australia
Karen Andrews: Well good morning. We have just had a very positive and constructive meeting with many of our peak bodies about supply chains and any impacts that they are currently experiencing here in Australia. And the very positive news coming out of that, is that to the people of Australia, I give this message – that there is no need for them to go out and to panic buy. So to Australians, remain calm. There’s no need to panic buy. Australia has good – more than adequate supplies of food, of medicines, and we are in an exceptionally good position at this point in time. So there is no need to go out and panic buy.
There are some issues with restocking our shelves at the supermarkets, but understand that we do have good supplies in our distribution centres and we are now working to make sure that we can stock those shelves, so that when Australians walk into a supermarket, they will be able to see the products that they need to buy. But rest assured, those products are available and we are working to get them on to the shelves. Similarly, many of the medicines are available and we will be working very closely with manufacturers and suppliers to make sure that we are stocking the shelves as soon as we possibly can.
Now I’ll invite Russell for you to say a few words about what you are hearing from your members in relation to supplies.
Russell Zimmerman: Thank you, Minister. As the minister has pointed out, there are lots of supplies in the DCs – the distribution centres – and in the factories. The biggest problem the retailers have at the moment is there are curfews within each individual town and area, and this is not a Federal Government problem. What we need is the curfews to be lifted so that the supplies can be got into the retailers so that there is plenty of stock for everybody. And I have got an assurance today from the Minister that she will work actively to try and resolve that issue. Thank you, Minister.
Karen Andrews: Thank you. Liz?
Elizabeth de Somer: Just to concur with that message, there is plenty of medicines in the supply chain. Medicines manufacturers keep at least three to six months of medicine supplies available in country, and they’re already ramping up production of other medicines. There is no need to stockpile and stock up your ordinary usual daily medicines. Just buy your usual monthly supply of scripts. Plenty of medicines in supply chain.
Karen Andrews: Thank you. Happy to take questions.
Question: Will you be looking to defer business activity statement lodgements, and payments for businesses affected by issues in the supply chain?
Karen Andrews: Look, that’s a matter for the Prime Minister and for the Treasurer to deal with. The focus of today’s discussion has been on supply chains. Looking at our manufacturers, making sure that we have adequate supply of the raw materials that they need to be able to keep producing the products that Australians are looking for. And I am absolutely assured that there are sufficient supplies here in Australia at this point in time, and that there is no need for there to be any panic buying, that there will be stocked on the supermarket shelves and we are working to get it there as quickly as we can, and that we have good supplies of the medicines that are needed. So today was all about supply chains, and of course, reassuring the Australian people that there is no need for them to panic buy at all.
Question: And can you give us a sense of how many Australian businesses roughly are affected by supply chain issues at the moment? Like is there are a rough percentage there?
Karen Andrews: Look, we don’t have a breakdown nationally of businesses that have been affected. We do know that small businesses in some cases are getting the fourth hit, that they have been affected by drought, by floods, by bushfires, and now are seeing some impact from coronavirus. That goes especially to our tourism industry and our education sector. So we know that the impact is broad at the moment, but we are in a good position because many of our manufacturers and our suppliers here in Australia have got good inventory levels to make sure the stock demand needs are going to be met. So that is a very good reassurance to Australians.
Question: Russel, you mentioned there was plenty of stock in distribution centres. Are there any measures you’d like to see that might help that reach shelves?
Russell Zimmerman: Well look, as I stated earlier, there are lots of stock in the distribution centres. To the Minister’s point, firstly, can I reassure you and every Australian that there is absolutely no need to panic buy. However, the more important issue that we’re facing at the moment is there are curfews. And this is not a Federal Government issue, but I know the Federal Government is going to try and assist and work on it. But the issue is that there are curfews when deliveries can be made to stores.
So for example, it may cut off at 10 o’clock at night time and you can’t deliver before, say 7:00 in the morning. If we could get those trucks into those retail stores at other times beyond the curfew times, there is a huge opportunity to get the stocks into the shelves so that people would then realise that the stock is there. Nothing breeds a problem more than what we’re seeing on the shelves at the moment, but the sad part is the stock is there, so there’s no need to panic buy. I cannot emphasise that enough. There is lots of stocks in the DCs and in the factories, and many factories in Australia are ramping up to ensure there is even more supply.
Question: Is the curfew the biggest issue that you guys discussed today? Or was there some other key concerns that you have?
Russell Zimmerman: I’ll refer that to the Minister, thank you.
Karen Andrews: Certainly one of the issues that was raised today was the impact of curfews, because yes, it is potentially very concerning if you walk into the supermarket and there are some items that are not there. But it is important to note that at any time of the year, you could walk into a supermarket and there could be a supply issue with a couple of products that you are needing to purchase. What we are reassured about is that we do have good stocks of those, but we have an issue with getting that stock from the distribution centres into the supermarkets and onto the shelves. We are going to do everything that we possibly can to expedite that so that when people walk into the supermarkets, they are actually seeing the shelves stocked. So that was a key part of our discussions today. We also very broadly spoke about general supply chain issues, and we have been reassured across a number of industry sectors that yes, there may have been some minor supply chain issues that have been experienced, but manufacturers have been able to source product from different regions outside of China. So they’re looking at where else they can get their supplies from. That is very positive news, and we actually came out of there with a very strong view that the message that we need to get across to Australians is that there is no need to panic buy. We have good stocks.
Now what we have also committed to is that we will meet again next week and we will again discuss what the current situation is, but we will actually start to look at what the next steps are going to be. Because we know that we are going to come through this. So we need to prepare for when we’ve come through this particular issue. Where are the areas that we can look to ramp up manufacturing in Australia to meet some of the critical needs that we’ve experienced in this current set of circumstances? What are the opportunities? Now we know that already some of our manufacturers are looking at how they can scale up their operations, there may well be new players that come into the market. But our next meeting will certainly be dealing with issues that we need to in terms of immediate concerns with supply chain, what further issues may emerge with supply chains, and how do we recover from this and what are the opportunities. So it was a very constructive and positive meeting.
Question: So you’re saying that there is quite a lot of stock and our supply chain aren’t anything to worry about, but are there any items that people should be concerned about that we just cannot get at the moment?
Karen Andrews: Look, what we heard at the roundtable this morning is that we do have adequate supplies, particularly of things that are important to people. So our food goods such as rice, pasta, cornflakes, plenty of supply of all of that. We understand that there are some issues with people being able to access hands sanitiser, there’s wipes, there’s good old soap. So let’s just start washing our hands properly with soap. So we are a very innovative nation, and people will always look for alternatives. So if you can’t buy the hand sanitiser that you’re used to buying, your option is to use good old soap.
Question: Outside of China, are there any particular countries or regions the businesses are struggling to, I guess, get supplies from in Australia?
Karen Andrews: Well there are potentially some demand issues. What we did hear about is that there are some delays in getting manufactured white goods into Australia. That will be coped with. We’re obviously looking at what the other options may be for getting those finished goods into Australia. And so there might be some delays. We did hear news that parts of manufacturing were ramping up overseas. That is great news for us here because that will deal with potentially some emerging issues, but we’re also looking at what other countries manufacture white goods and how we can access that as and when required.
Question: I might just quickly, are there any differences between obviously metropolitan areas in accessing things and regional areas?
Russell Zimmerman: Well I’m pleased you asked that question because in actual fact, I saw a photograph and I’m going to say it was in Coonabarabran, but I’m not absolutely certain of the place, and there where bucket loads of stock everywhere in that store. So yes, obviously regional areas in many cases haven’t been affected as much. But to answer your question fully, yes there are pockets that are worse than others, and it depends upon individual states and suburban areas.
Elizabeth de Somer: Can I answer that? From the perspective of medicines, there is the community service obligation government supported that requires medicines to be restocked within 24 hours for all PBS medicines. So there are no shortages of medicines.
Karen Andrews: Great, thank you very much.