Mars Australia told a supermarket price inquiry that its profits helped ensure a $112 million expansion at its Wodonga pet food factory.
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The US-based multinational referenced the project in its submission to a Senate committee, which released its final report on Tuesday, May 7.
Mars, which also makes confectionery and sauces in Australia and employs 1800 overall, stated that "profits are important for successful, sustainable businesses".
"Profits generated by Mars Australia allow us to maintain and pay higher wages including a 4 to 5 per cent increase over the past 18 months for our manufacturing workforce," the submission read.
"It has also helped secure global investment for Mars Australia, including the current $100 million-plus wet-pouch facility being built in Wodonga, which will deliver 60 local jobs and additional benefits for the local economy."
The company stated in 2023 its overall profit margin was under 2020 rates, "indicating that we are not profiteering through price rises".
Along with cost pressures through freight, the exchange rate and energy prices, commodity outlays have also spiked.
"Purchased poultry meal and fats for Mars pet foods have increased 30 per cent, driven largely by strong and growing biodiesel demand," Mars reported.
"High input costs in the Australian poultry industry on raw materials, labour and supply chain constraints have also increased price."
Nestle Australia, which produces Uncle Toby's breakfast cereals and snacks at its Wahgunyah plant, also made a submission.
Its director corporate affairs and sustainability Margaret Stuart said prolonged inflation had struck raw materials, packaging, transport, labour and energy.
"We are continuing to work hard to reduce the impact, taking many steps to find opportunities within our business to find savings and absorb cost increases," she advised.
"We have not passed on the cost increases in full."
Greater Shepparton Council mayor Shane Sali, whose area is described as the food bowl of Australia, gave a stark illustration of the discrepancy between production and retail pricing for vegetable grower Ross Marsolino.
"Ross reaches a break even point of $2 per kilogram for his zucchinis, yet major supermarkets purchase the produce from him at $2.20 per kilogram, subsequently retailing it at $6.50 per kilogram," Cr Sali told the committee.
The Senate inquiry found major supermarkets should be forcibly broken up if they are party to anti-competitive behaviour and called for price gouging to be illegal, enhanced powers for the Australian Competition and Consumer Commission to investigate unfair trading, and the creation of a prices and competition commission.
Indi MP Helen Haines said on Thursday, May 9, that it was apparent prices were not fair for producers and consumers and the Senate inquiry had led to some "alarming findings".
Asked if she would like the major supermarket chains to be broken up, Dr Haines said she wanted to see the final outcome of a review into the grocery code of conduct by former MP Craig Emerson before reaching a conclusion on that matter.
