Australia’s food charities are buckling under the cost-of-living crisis, forced to provide pantry staples for the same cost as, or more than, the major supermarkets.
Falling donations and unprecedented demand have pushed the cost of essential items distributed through Foodbank in New South Wales and Victoria so high that it can be cheaper to shop for generic supermarket brands.
Foodbank is at the centre of Australia’s food relief response, selling food it has bought or had donated to 2,929 frontline charities across the country, who then either on-sell to vulnerable people or donate it. In 2023, the not-for-profit sourced enough food for 92m meals.
Fiona Moore lives in Newcastle, on a disability support pension, and she has shopped at three local food pantries for years. It’s now often cheaper to do most of her shopping at Aldi, she says.
“Most of the canned products are cheaper at Aldi, your basic pasta is all cheaper, noodles are always cheaper,” Moore says.
Moore, who blogs her shops, says one local food pantry was recently charging $12 for two cans of spam, when spiced tinned ham was $3 a can at Aldi and the same item was $5.40 on special at Coles.
She says the pantries often stock well known brand names. “But you know you can get your Aldi one or your home brand cheaper,” she says.
Foodbank branches in NSW and Victoria operate under different rules: in NSW, charities who buy from Foodbank can charge their customers, while in Victoria charities must give the food away.
The money Foodbank charges charities covers its handling fees – the cost of sourcing and redistributing the food.
A Victorian-based charity worker, who did not want to be named, said that Foodbank had raised its prices to the point where the charity she works at was struggling to stay open.
Screenshots taken last month from Foodbank’s online pantry, seen by Guardian Australia, show some items were significantly more expensive compared with major supermarkets.
Charities could buy dry dog food from Foodbank for $2.08 per 100g, compared with $0.23 per 100g at Coles. Dishwashing liquid was $1.15 for 495ml at Foodbank while shoppers could buy a litre for under $1.50 at all three majors.
The charity worker says Foodbank prices have spiked in the last two years. In 2022, she says a dozen 450g cans of tinned ham cost $3.02 but last month was $64.30. In 2022, a dozen 400g Christmas puddings cost $5.40 but was now $43.80.
If prices continue to go up, she says the charity will have to close.
“We give out about two tonnes of food a week,” she says. “We get no money. We all do it for free. Every dollar that we raise buys food.
“I’m worried that this is going to have huge implications on the whole sector.”
A ‘worst-case scenario’ for Foodbank
Each chapter of Foodbank is being hamstrung by the same key issue. Demand is up, and sourcing cheap or free food is harder. In Victoria alone, food donations have dropped by 15% over the last year – as donors and producers “streamline” operations because of the cost-of-living crisis.
Gary Mortimer, a professor of marketing and consumer behaviour at Queensland University of Technology, says the drop in donations as companies cut back on excess production is becoming a serious issue for food charities.
“[Foodbank] is pretty exposed to the suppliers and wholesalers,” he says.
“And [suppliers and wholesalers] are getting really good at minimising their costs. They’re using AI and complex forecasting models to reduce the risk of overproducing food.
“And it’s the leftover stuff that Foodbank is hoping to secure low prices [on]. The worst-case scenario is that Foodbank just can’t find products … in the coming years and that has a knock-on effect for charity groups.”
In NSW, Southlake’s Incorporated provides a weekly free meal service and runs a food pantry. It’s one of the places Moore shops at.
Last week, the founder, Christine Mastello, posted a statement on Facebook asking if anyone would like to become a sponsor, as their monthly costs have hit $7,000.
Rent, increasing insurance and the cost of buying from Foodbank, “where rising costs mean we now often break even or lose money on essential food items,” resulted in a $3,000 shortfall every month now, Mastello says.
“We have raised a few of our prices to help meet all our bills,” Mastello says. “I’m proud to say though that we are still cheaper than Coles or Woolies.”
Over Christmas and the new year period, Southlake’s Incorporated fed 100 people, she says. Mastello says they will find a way to stay open.
“We are struggling as is every other charity because we do not receive state or federal funding to cover running costs,” she says.
‘We’re constantly begging’
A spokesperson for Foodbank NSW said they are spending more money to source essential products because food donations had dropped.
“Supply chain issues and shortages have made it increasingly difficult to source donated products which has resulted in the need to purchase more food to meet the growing number of people living with food insecurity,” the spokesperson says.
“Last year, we provided 12.7m kilograms of food to communities across NSW and the ACT. 9.2m kilograms of this was donated and 3.5m kilograms purchased.
“Despite our very best efforts, the food we supply is still not enough, particularly as the cost of living continues to grow.”
It is a similar story in Victoria, where the Foodbank CEO, Dave McNamara, says they are dealing with unprecedented demand.
“I get it that our charity partners are struggling to purchase food from us,” he says.
“[High inflation] on fruit and veg … means we’re seeing less and less food against the money that we’re spending. We’re certainly not making profit out of our charity partners.”
McNamara says they have to put a price on food to cover the handling and distribution costs, which have also gone up, but they always give fresh food for free.
Adding to the pressure is a rise in discount retailers, like NQR, Beyond Best Before and Cheaper Buy Miles, who sometimes compete for the same low-cost stock as Foodbank.
“The problem is we’ve got to be sustainable as an organisation because we have 500 charity partners relying on us across the state,” he says. “At the same time, we’re seeing governments reducing funding.”
The CEO of Addison Road Community Organisation, Rosanna Barbero, runs a food pantry in inner Sydney. She says last financial year they spent $500,000 on food – almost double the previous year.
The increase in costs means they are also running more fundraisers, hoping to fill the gap through donations.
“We’re constantly begging and asking: ‘please donate, please donate’,” she says. “Which we hate. We’re in a rich country, we shouldn’t be asking. It is not the responsibility of the general public. Our pantry is in the prime minister’s electorate. During Covid, the prime minister was packing boxes here, he knows the need.”
She stresses Foodbank provides a vital service, that they do good work and are underfunded. But the system is broken, she says.
“The point is, they should be well funded so they don’t have to sell food, right? And we should be well funded so we don’t have to sell food.”
The federal assistant minister for charities, Andrew Leigh, says “Labor strongly supports the value of food relief”.
“Over the past 12 months, we have announced nearly $20m in additional funding for emergency and food relief charities,” Leigh said in a statement.
“After a war on charities under the former government, Labor has backed food relief charities through direct support for the vital work they do.
“To ensure families get a better deal at the checkout, the Albanese government is cracking down on shrinkflation by strengthening the unit pricing code to make it easier for Australians to make accurate and timely price comparisons, working with the states and territories to reform planning and zoning regulations to boost competition and reduce land banking.”
