Question

You are a Freelance Economics Consultant who has been commissioned by the Commonwealth

Government to analyse the state of affairs in the Fast Food and Takeaway Food Services in Australia

and report your findings to the Government.

q1.Analyse the impact the level of government intervention is having on the industry. Consider both the firm and the consumer perspectives.

Answer 1

Australia's Food and Beverage industry is a major contributor to its GDP; it's the largest manufacturing sector with an annual turnover of $50 billion. Australians are fast-food lovers and enjoy eating out about thrice a week. However, the growth of the Fast-food industry in Australia has often been blamed for the rising levels of obesity among its population, particularly children.

Food advertising is regarded as a major driver for promoting the consumption of fast-food among children. Over the years, the government has come up with various regulations for controlling the impact of such advertisements.

*The Children's Television Standards, 2009 is one such legislation that deals with food advertising. It prohibits advertisements that are misleading or promote false information relating to the nutritional value of food and beverages.

* Active After School Communities is another initiative taken by the Australian government for promoting an active lifestyle among kids. Though this initiative doesn't stop kids from eating junk food, it is helping them maintain a healthy lifestyle and educating them about the importance of excercise.

* Legislations on labelling and nuritional content in food have also been passed.

The Australian government's efforts in curbing the consumption of unhealthy fast-food has had a positive impact on consumers. Australian consumers have become more health conscious and are demanding a wider range of options among food items. This change in consumer habits has prompted the industry to innovate and come up with newer ways for promoting their products. McDonald's, for instance, has introduced touchscreen kiosks at its outlets that allow consumers to create their own burgers. As the Australian market is relatively disconnected from other markets, problably because of its geographical location, companies often use it as a base for testing new food items. Fast-food companies have been introducing new food items in Australia before marketing them elsewhere. This factor makes Australia an attractive destination for innovative fast-food companies.

As consumers continue to choose healthier eating habits, it has become increasingly important for Fast-food companies to continuously innovate for maintaining market share. Also, as Australia tackles high obesity rates among its population, both existing and new companies in the Food and Beverage sector must realise their responsibility in helping Australia adopt a healthier lifestyle.