One of Australia’s largest suppliers of toilet paper is the latest manufacturer to warn it will increase prices due to energy costs.
Steve Nicholson – CEO of Solaris Paper, which makes Sorbent toilet tissue – on Monday said the company’s gas bill was set to triple and it would be difficult to absorb the cost.
Speaking on Sydney radio station 2GB, Mr Nicholson would not go into specifics of how much the gas bill would cost, but did confirm it would be in the millions when the fixed contract with Solaris Paper’s current energy supplier ended this year.
As well as Sorbent, Solaris Paper produces Handee Ultra paper towels and the Deeko range of paper plates, cups and serviettes from its factories in Melbourne and Sydney.
Given the looming bill, Mr Nicholson said the cost would likely need to be passed on to consumers.
“We don’t want to pass on these costs, but we’re going to have to,” Mr Nicholson said.
“We can absorb these costs, not 300 per cent in gas – that’s only one of our costs.”
Mr Nicholson described the situation as “a real crisis looming up”.
“I mean, this is an icon toilet paper we’re talking about,” he said.
“At the moment we’re coming out of these locked-in energy plans and we’re falling into … triple the costs the next year.”
Mr Nicholson added that while renewables is the direction “we want to go”, he said there needs to be a “proper transition plan”.
Cost of chips
Solaris Paper isn’t the only company mulling a price hike to cover the cost of gas expenses.
Snack Brands Australia CEO Paul Musgrave last week warned consumers might be soon paying more for chips.
Snack Brands, which makes Cheezels, Thins, Kettle Chips and CC’s – last week revealed a similar hike in gas prices after a switch of suppliers saw its gas cost jump from about $3 million per year to about $9 million.
“It’s a lot of coin … for us as a business,” Mr Musgrave told 9News last week.
“And ultimately we have to pass that onto consumers because there is no way the business can absorb that in any way shape or form.”
Renewables
Mr Nicholson said that while Solaris Paper was committed to transitioning to renewable energy, the process would take time to implement.
He called on the regulator and federal government to do more to ensure the price Australians paid for gas and electricity was affordable in the meantime.
It is not just big companies experiencing high gas prices, with everyday Australians also suffering from mounting bills.
The former Australian Competition and Consumer Commission chair Rod Sims has previously told The New Daily Australia’s gas market was “broken”.
Experts have agreed that successive federal and state governments have overlooked the domestic market by allowing Australian gas producers to export their products.
Chief economist at the Australian Institute Richard Denniss said Australia doesn’t have a gas shortage – in fact, we’re producing triple the amount of gas than we used to.
Sensible measures ‘on the table’
Mr Albanese last week promised “sensible” measures to help provide relief for Australians and businesses.
“All sensible measures remain on the table. We’re working these things through, including talking with industry,” he said in an interview on 2GB.
“But we need to provide relief … You have extraordinary profits being made at the same time as households and businesses, particularly manufacturing, are under pressure.”
Mr Albanese reiterated Australia’s commitment to renewable energy and dismissed suggestions it wouldn’t be the cheapest path forward, saying “every economist in Australia” agreed with that sentiment.
“You have a shortfall in the market as a direct result of the failure of the former government, which is why the business community is saying very, very clearly across the board … they all welcome the new government policy on these issues, which is aimed at providing that investment certainty,” he said.
-with AAP
