What impact will the Carbon Tax have on QSR's?
As Australia inches closer to rolling out the carbon tax in July, we asked QSR executives how the legislation will impact their businesses and what coping measures they plan to take given the price increases that are sure to follow.
Even with only months to go, some are still in the review and planning stages. Still others are preparing their franchisees and financials for the worst case scenario of sudden spikes in rentals and supplier costs.
“We expect that landlords will pass on at least a portion of the amounts they’ll have to pay as carbon tax, which certainly may affect Jamaica Blue franchisees in the form of increased outgoing contributions and increased rent,” said Foodco Group Managing Director, Serge Infanti, speaking for Foodco brands, Jamaica Blue and Muffin Break.
“Similarly, we do expect increases in our various suppliers’ costs as an on-flow of the carbon tax on power, freight and associated manufacturing fees,” he said. “Like many Australian businesses, Foodco cannot be sure of exactly how – or more specifically, by how much – the carbon tax will affect our operations but we have started to make allowances in our budgets.”
Pizza Inn acknowledges the rising input costs borne from the nearing carbon tax, but franchise manager Ron Browne said that “this is a challenge we have not yet looked at but will review.”
In a similar position is Pacific Retail Management (Go Sushi, Wasabi Warriors) which is still weighing its options. “We have no strategy in place at the moment for Carbon Tax, and at this stage are still researching what the impact will be on our business,” said Nicola Mills, MD, Pacific Retail Management.
Given the expected price bumps in rentals and inputs, Sunshine Kebabs is looking to cut operational costs to at least blunt the pass-on increases to customers.
“We are doing our best to reduce our costs and that means that we have to look internationally,” said Murat Coskun, CEO, Sunshine Kebabs. “We haven’t had a price increase for a while, if we can save a percent or two on our costs combined with modest price increase we should be covered.”
