Essential Ingredients Barry Young said the ban would have had a major impact on regional producers and shops.

"It's good news, certainly it takes the pressure off a lot and is good for smaller regional communities who rely on post to get perishables into smaller communities," he said.

Australia Post had originally announced it would no longer deliver perishable products from June 30.

Mr Young said it was important now for the federal and state governments to work to unify the food-handling regulations across the country.

"From Australia Post's point of view, [the ban] was a reaction to states having different requirements for food handling, but if state and federal governments look at uniformed regulations for food handling it will overcome a lot of issues."

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After flagging the ban earlier this week, Australia Post confirmed on Thursday it would continue to ship perishable good across the country and would work with Australian Small Business and Family Enterprise Ombudsman Bruce Billson to support businesses.

An industry working forum to address cross-state regulatory issues had been formed.

Acting group chief executive and managing director of Australia Post Rodney Boys said it was a 'complex landscape'.

"We recognise the original date for ceasing perishable transport through our network would cause significant disruption to small businesses, many who have experienced significant growth in eCommerce sales during COVID-19," Mr Boys said.

Wahgunyah's Lousia Morris, of Louisa Morris Cakes, previously told The Border Mail her online trade of baked goods and jams has grown to 70 per cent of her business since COVID-19 hit.

She welcomed Australia Post's reversal of the decision.

"It's amazing, oh I'm very relieved, and it will help keep the local post lady in business," she said.

"Just the uncertainty of it all... [was very hard]. I'm super happy it's back."

Junee Licorice and Chocolate Factory general manager Rhiannon Druce said it was good news.

"I got a phone call [Wednesday] morning from Australia Post that confirmed that confectionery would not be on the list," she said.

"We're thrilled that none of our customers will be going without chocolate...

"Our staff are very comforted to know that nobody will have to reshuffle [out of packing deliveries] or potentially lose their job."

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