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Australians have been warned to brace for another hit to the cost of living as the floods devastating parts of Victoria and NSW drive up food prices, and require billions of dollars to be spent on assistance to those affected, Treasurer Jim Chalmers has warned.

Speaking ahead of his first budget, to be handed down next Tuesday, Dr Chalmers also opened the door to a longer-term root and branch look at the National Disability Insurance Scheme, which is spiralling in cost and is now one of the top five demands on the budget.

The NDIS, which was originally forecast to cost no more than $25 billion a year and grow at 4 per cent, now costs $29 billion a year, is growing at more than 12 per cent, and is forecast to hit $60 billion a year by 2030.

“We believe in the NDIS, and we want to make sure it’s delivering for people with a disability in this country,” Dr Chalmers said.

“Part of that means making sure that the money that’s spent on that, really quite extraordinary sums of money ... is doing the job that it’s supposed to do.

“We don’t have a lot of room in this budget to spray money around unnecessarily. Where we can make programs more efficient, we should.”

However, so-called “tough measures” to tackle the huge structural costs imposed by the NDIS, health, aged care, interest payments on debt and defence will be the focus of subsequent budgets.

Next week’s offering, Dr Chalmers confirmed, will basically be a bread and butter exercise, and will do little more than reconciling Labor’s big election promises on cheaper childcare and prescription drugs, and updating the economic forecasts.

Due to the floods that have hit some of the east coast’s major food production regions, and caused extensive property damage, the forecast deficit for this year is likely to be worse and inflation possibly higher, Dr Chalmers suggested.

“We need to brace ourselves for the impact of these natural disasters on the cost of living,” he said.

“We’re talking here about some of the best growing and producing country in Australia, and it has been seriously impacted – whether it’s the destruction of crops, or the inability to access some of these farmlands, whether it’s livestock and other consequences.

“Australians do need to brace for a cost-of-living impact from these floods. These are likely to push up the cost of living when Australians are already under the pump. It will also have obvious consequences for the budget.”

The treasurer’s office said it was too early to estimate the inflationary and budgetary impact of the floods.

Meanwhile, Prime Minister Anthony Albanese defended the decision to axe billions of dollars in Coalition discretionary grants, saying they lacked probity.

“If you want to know where my government will approach community infrastructure grants, it’ll be by delivering through local government,” he said.

“That is the way that you ensure probity, and the way that you ensure value for money is by asking local communities through their elected local representatives what their priorities are.

“I’m not a big fan of funding one private for-profit corporation, which is in competition with their neighbour next door.

“Whether that be a farm, or whether it be other produce as well, I think that gets you into real difficulty, and probity issues is the polite term to use.”

Vinomofo has admitted to a data breach where the personal information of customers has been stolen.

The online wine retailer sent customers an email about the breach on Monday evening. It revealed that some of the details that may have been stolen include customers’ names, gender, dates of birth, addresses, email addresses and phone numbers.

However, Vinomofo said no financial information was taken in the breach. Vinomofo account passwords are also apparently safe, so in theory no one can look at your order history.

“Vinomofo does not hold identity or financial data such as passports, drivers’ licences or credit cards/bank details,” the company said.

According to the retailer, the customer information was accessed from a testing platform. While it is not connected to the live Vinomofo website, it did contain real information.

“Our investigation established that customers’ and members’ information on our database on this testing platform was unlawfully accessed by a third party,” Vinomofo said in a statement.

“However, our cyber security and forensic specialists have assessed that the risk to our customers and members by this information being accessed is low.”

It’s currently unclear when the incident occurred or how many customers were impacted.  SmartCompany has contacted Vinomofo for comment and clarity.

Vinomofo said it has reported the incident to the Australian Cyber Security Centre (ACSC) and the Office of the Australian Information Commissioner (OAIC). It also said it is now working with cyber security experts, such as IDCARE, to investigate the breach as well as strengthen its security systems.

The customer email goes on to provide customers with information on how to avoid potential scams off the back of the breach, such as fake emails and texts. They also recommend that customers change their Vinomofo account passwords as an extra precaution despite them not being part of the breach.

Major data breaches seem to be on the rise

This is just the latest in a string of data breaches across the country in recent weeks. Optus kicked things off with one of the biggest data breaches in Australian history, which affected customers’ personal and identifying information, including passports and driver’s licences.

This was swiftly followed by breaches across Telstra, Woolworths and Medibank, sparking fresh conversations around how customer data is stored by Australian companies, as well as people’s right over their data. It has also resulted in Attorney-General Mark Dreyfus calling for “urgent reforms” to the Privacy Act.

Under the Notifiable Data Breaches scheme, an Australian company must disclose a data breach if its likely to cause “serious harm”. This can include identity theft, impact to credit reports, fraud, physical and psychological harm or impact to reputation.

Superannuation giant Aware Super and a syndicate of elite Australian athletes have backed Mexican food chain Guzman y Gomez in a share sale which values the company at $1.5 billion.

Guzman y Gomez founder Steven Marks said the investments were a testament of the group’s recent past performance and plans for the future. “We’re well positioned to build and bring even more [Guzman y Gomez eateries] to life here in Australia and globally,” he said.

The investors have not disclosed the value of the secondary share sale, but the investment was led by Aware Super, which has $150 billion worth of Australians’ retirement savings under management.

The deal values the Guzman y Gomez at a fully diluted market capitalisation of $1.5 billion.

Athletic Ventures, the investment syndicate founded by recently retired Greater Western Sydney Giants player Matt de Boer, also made its third consecutive investment in Guzman y Gomez as part of the sale.

The group, which boasts 100 members including Test cricketer Mitchell Starc and Wallabies captain Michael Hooper, has been on the lookout for high-growth start-up businesses.

De Boer said the athlete group’s belief in the Guzman y Gomez business “grows stronger by the day”.

“Most importantly as an athlete community, we understand deeply what high-performance looks like, and continue to be blown away by the quality of the management team and their continued execution,” he said.

Beer and soft drinks giant Asahi Beverages, which owns the Carlton & United Breweries business which makes Victoria Bitter and Carlton Draught, has acquired premium low-calorie soft drinks and mixers group StrangeLove nine years after it was established.

Asahi Beverages chief executive Robert Iervasi said StrangeLove had been growing fast in a broader category which would largely be immune from an economic downturn as consumers continued to trade up to higher-end products.

“We actually think the premiumisation trend will continue. People still want to treat themselves,” Mr Iervsai said.

“Beverages have been quite resilient to recessionary environments.”

StrangeLove was founded in Byron Bay in 2013 by James Bruce and Stafford Fox. It makes about 55 per cent of its sales in hospitality venues such as restaurants and bars, 35 per cent in retail, and 10 per cent from the online channel.

It has 25 products including Tonic No. 8, Lo-Cal Yuzu, Double Ginger, “Fancy Lemonade” and a range of premium sparkling mineral waters. The company, now based in Melbourne, uses outside contract manufacturers to make its drinks.

Co-founder Mr Bruce said revenue was up 100 per cent in the past two years despite the COVID-19 restrictions in 2021 which hurt the hospitality industry.

The business has expanded its presence in the supermarket channel, and is now stocked in the aisles of about 300 Woolworths supermarkets, along with traditional liquor retailers such as Dan Murphy’s, owned by Endeavour Group, and a range of Coles Group liquor stores such as First Choice.

Mr Bruce said StrangeLove’s Tonic No.8 was the biggest selling product line, but it was relatively even across the range. The company was set up in 2013 amid Byron Bay’s burgeoning “organic food scene”.

“I was having a bit of a mid-life crisis at age 30,” he said. The unique name came about as a reference to people wanting to drink healthier products with lower calories and lower sugar content.

“Originally it was about self-love and taking care of yourself,” he said. It was not a reference to the 1960s black comedy movie Dr Strangelove directed by Stanley Kubrick.

Mr Iervasi said retailers were allocating more shelf space to non-alcoholic premium beverages, while Asahi would also expand StrangeLove’s reach through its existing hospitality venues distribution network.

He declined to comment on the purchase price. “It was an exciting business that we had identified and we had been watching,” he said.

Extra grunt

Asahi Beverages intended to run StrangeLove as a stand-alone business, but use the Asahi distribution clout to bring it to more consumers.

“That helps us maintain the DNA of what it is,” Mr Iervasi said. Asahi already has a large softdrinks business in Australia and is the owner of the Schweppes range.

The Japanese-owned conglomerate bought Carlton & United Breweries for $16 billion in 2020, giving it ownership of beer brands Victoria Bitter, Carlton Draught and Crown Lager. Asahi has also been expanding in other drinks segments, buying Australasian coffee business Allpress in 2021.

CUB in the past few years has bought up several craft beer brands to add extra grunt, as the craft beer segment grows much faster than the mainstream beer category. It acquired Pirate Life, 4Pines and Balter Brewing in quick succession from 2017 to 2019.

StrangeLove’s Mr Bruce said one of the larger competitors in the premium softdrinks and mixers category was Fever-Tree, owned by a British company. “There’s competitive tension there for sure,” he said.

Mr Iervasi said StrangeLove being a home-grown Australian brand should help its penetration in the local market.

The move by nation’s supermarkets to lock in prices on everyday grocery items may be short-lived, with Woolworths and Coles yet to commit to extending their policies beyond the next few months.

Both Coles and Woolworths have moved to reduce and lock in prices on a range of common items this year, in a bid to give shoppers greater certainty over their bills at a time of product shortages and rising cost of living pressure.

Woolworths has launched a price drop program on common grocery items, which is set to end in November, as well as a policy to freeze the price of 200 essentials until the end of the calendar year. Meanwhile, Coles this week decreased the price of 150 items and locked these until the end of January 2023.

With the Reserve Bank’s decision on Tuesday to raise interest rates by 25 basis points to nine-year highs to exert further strain on household budgets, lower income households in particular would need to tighten their belts. Both major supermarkets have acknowledged that their customers are facing a cost of living crunch, and said they are keen to offer deals for budget conscious shoppers.

However, neither would confirm on Tuesday whether these policies will be extended beyond the end of this year.

“Like any of our promotions or value offers, we will continue to work with our supplier partners on whether these offers can be extended, as well as the potential to bring in other new and exciting offers,” a Coles spokesperson said.

Woolworths would not comment on future pricing decisions, but a spokesperson for the supermarket said the business was working on a range of offers to help its customers.

“Customers can also stretch their budget without sacrificing top quality by opting for our Woolworths brand products, which are available across a range of categories at competitive prices,” they said.

Retail analysts are tipping conditions will deteriorate for businesses, which sell their produce to the big supermarkets, as they tackle rising cost pressures and tightening margins. Pressure from these suppliers, could spell an end to product promotions and force the hand of big supermarkets on pushing through price increases.

A survey of 56 consumer goods makers by investment bank Jarden, carried out last month, revealed close to three quarters of the suppliers surveyed wanted to raise prices in 2022.

“This would suggest inflation will continue to accelerate in the coming months,” analyst Ben Gilbert wrote in a note to clients.

Retail expert and QUT professor Gary Mortimer said the prevailing market conditions put the major supermarkets in a difficult spot, as they manage their bottomline while providing relief to their customers.

Delivery price consistency, according to Mortimer, was an important tool for supermarkets during inflationary times, especially as discounting becomes more difficult.

“Consumers are certainly attracted to a supermarket that can hold prices at a consistent level for a period of time, particularly if it’s those core products that people buy,” he said.

Coles’ shares closed the session 1.35 per cent stronger at $16.52, while Woolworths was 1.5 per cent higher to $33.99.

Grocery retailers say consumers can finally expect better prices as fresh produce flows back into stores, even as growers continue to contend with mounting production costs.

After months of constrained supply, due to extreme flooding along the east coast, supermarket retailers said this week that conditions have at last stabilised and could improve further.

At Coles, an increased supply of strawberries, corn, capsicums and citrus have flowed through for the start of spring, while tomatoes have also rebounded as weather conditions improved along the east cost.

“We now have strong volumes across many lines, although some are still in restricted supply,” the supermarket giant said, noting that chillies continue to be impacted by cooler weather in Queensland.

Woolworths has noted the same trend, flagging that berry suppliers have forecast strong volumes in the lead-up to Christmas.

“Pleasingly, the warmer weather has brought with it a return to lower prices, with a range of produce including lettuce, berries, tomato, broccoli and cucumber back in strong supply,” a spokeswoman said.

An Aldi spokesman said consumers will continue to see an increased range of produce over the coming months, while categories that have been under pressure have now bounced back. “The supply of lettuce, loose-leaf greens and other fresh produce has stabilised as a new yield of crops have been picked and delivered to stores, resulting in a normalisation of prices and availability.”

Third La Nina not expected to dampen availability

But while the days of the $11 a head iceberg lettuce are over for now, produce growers are divided about future pricing and availability, with many reporting they are still facing uncertainties about the weather outlook and rising cost pressures.

Last week the Bureau of Meteorology declared a third consecutive La Niña in Australia, and while conditions aren’t looking as tough as previous years, the threat of more bad weather is hovering over producers.

Spokesman for industry group AusVeg, Shaun Lindhe, said it was hard to predict whether another season of heavy rains would once again impact vegetable growers, but hoped that in cases where one region was impacted, other states could pick up the slack.

“We have a national supply chain and it’s quite resilient,” he said.

While crop output has improved producers were still feeling the weight of increased supply chain costs, ranging from fuel to energy use and fertiliser, Lindhe added.

Other independent fresh produce growers and farmers are optimistic that the upcoming La Niña will be less severe than the previous two periods and won’t result in the same crippling food shortages.

The well-documented lettuce shortages were because Queensland and NSW, which produces 80 per cent of the leafy green vegetables for the entire country during winter, was decimated by flooding during June and July.

“The reverse now occurs in summer, where 80 per cent of produce [like] green leafy veggies, the ones that have been impacted during winter, are actually produced out of Victoria,” said Freshmark chief executive Meegan George. Freshmark represents the entire supply chain of growers, wholesalers, retailers across Flemington’s Sydney Markets and more.

“If we are having a weather prediction of a mild La Niña, it means that produce will not really be in lower supply … there will still be an abundance of availability.”

The milder winter also offers another opportunity for NSW and Queensland growers to plant another crop, she added, which is being sold in stores right now. Meanwhile, Victoria is preparing to harvest their crop in about two weeks.

“So we are going to see this lovely crossover of the three states all producing top-quality in the coming two weeks and for weeks afterwards,” George said.

“What that means for consumers is that they will have a huge abundance of quality, supply, variety and prices will come down as well.”

The only two types of produce that are yet to fully come online are beetroot and cabbage, but supply is expected to increase in the coming weeks.

While farmers have developed resilience to rapidly changing weather conditions, George said it was impossible to put a timeframe on how long good availability of fresh produce would last. “Farmers are incredibly used to the weather being a very capricious sister of theirs.”

Meanwhile, some industry voices are warning consumers to get used to food shortages and ensuing price rises occurring more frequently amid increasingly unpredictable weather patterns.

Catherine Velisha, the managing director of Velisha Farms which supplies vegetables to Aldi stores across Victoria and NSW, is calling for consumers to re-evaluate the value of fresh produce and consider input costs like labour, packaging, fuel and fertiliser that have all increased.“The need is for us to be aware that [shortages are] going to happen, and [to] prepare our mindsets for not having all produce available so readily all the time … We’ve had it very good for a very long time,” she said.

Sean Hallahan, the CEO and MD of listed Australian vegetable grower and marketer Costa Group, has stepped down after five years with the company.

Harry Debney has been appointed interim CEO and Hallahan will stay with the company to support the transition. The company is recruiting a permanent replacement.

Hallahan was the company’s COO until March last year, when we stepped into the role of CEO and MD.

Neil Chatfield, chairman of Costa Group, says Hallahan has played a pivotal role in the company’s development and growth. 

“We understand that the last two years, particularly in Victoria, have taken a large toll on the business and personal lives of individuals,” said Chatfield.

“Despite a challenging period with the Covid-19 pandemic and extreme weather conditions, the company persevered and maintained its strong financial position thanks to Hallahan’s leadership,” he continued.

Hallahan said he is proud to leave the company in a strong position financially and operationally despite the challenges of “an intense couple of years in agriculture” and the overlay of the pandemic.

“It has been a privilege to lead Costa and to have been part of an outstanding team of people for five years,” he added. “I wish Costa and its employees all the best for the future”. 

Interim CEO Debney has been a non-executive director for the company since July last year, prior to which he was CEO from 2010 to 2021 and led the company through its IPO in 2015. 

“Harry has an intimate knowledge of the company and is regarded as one of Australia’s leaders in horticulture,” Chatfield remarked. “He is the right person to assist the company as it transitions to a new CEO”. 

Aldi has opened its first Corner Store concept, in Melbourne’s CBD, complete with a cafe serving barista coffee.

The company says the store is designed for inner-city customers stocking ready-to-eat meals, fresh produce, bakery items such as cinnamon buns, croissants and baguettes, and its discounted Special Buys products. The Corner Store concept was first tested on Sydney’s North Shore, a hybrid model of part convenience store, part supermarket.

Huw Longman, director of Aldi Corner Stores, said the new shop will meet the needs of customers in the surrounding high-density, urban area.

“Shopping habits continue to evolve, and we are seeing a large audience of people who prefer shopping more frequently with a hyper-focus on convenience.”

He said the store meets these needs, taking convenience and creativity and combining it with quality and savings.

To commemorate the store opening, a unique limited-time Lazzio coffee cart pop-up will offer customers coffee for 37 cents. The coffee beans are hand-roasted in Victoria by Black Bag Roasters. Proceeds from the coffee sales will be donated to Aldi’s national charity partner, Camp Quality.

The new store is located at 501 Swanston St.

A2 Milk has outlined a renewed focus on building back its pandemic-battered Chinese daigou community while announcing a share buyback of up to $NZ150 million ($133.6 million).

The milk and infant formula maker swung back to profit in the 2022 financial year, with revenue up 19.8 per cent to nearly $NZ1.5 billion and net profit after tax rose 42.3 per cent to $NZ114.7 million.

A2 Milk’s share price jumped nearly 10 per cent higher on the back of the latest numbers to close on $5.40.

While revenue from its overall Asia segment rose 24.5 per cent, its daigou channel revenue slid by 17 per cent in the 2022 financial year, following a 42 per cent slide in 2021. Daigous are shoppers who buy and export premium goods to customers in China for a profit.

But the New Zealand-headquartered company is now refocusing on regrowing the daigou channel, which chairman David Hearn previously said was “never going to be quite the channel it once was”, and has ramped up its marketing content and sales events in efforts to regain market share.

A2 Milk CEO David Bortolussi said the slowed rate of decline in the daigou channel was proof it was “turning a corner”, and he “absolutely” wanted the lucrative but pandemic-disrupted channel to bounce back to its heyday.

“The daigou channel, through one-to-one word of mouth recommendation, is a really powerful form of new user recruitment and communicating our brand messaging through the market more generally. So it’s a really important and effective channel we want to support,” Bortolussi said on Monday.

A2 Milk has strengthened relationships with Chinese daigou resellers by setting up its own WeChat channel to communicate directly about products, creating sales and brand launches and product innovations. The company’s Platinum infant formula has new packaging and a “slightly new” formulation.

The dual-listed company’s share buyback is slated to start at the end of September and run for 12 months across the ASX and NSX, the New Zealand bourse.

Bortolussi said the buyback came as a result of assessing its net cash balance of $NZ817 million and determining that it had more than enough of a buffer for investment and market volatility and was left with “excess capital”.

“[We have] about $NZ150 million in surplus to our needs at the moment and going forward, we reviewed alternative ways to return that capital to shareholders, and we decided that the most appropriate means at this point in time – and it could be different in the future – is to execute an on-market buyback ... which is a real sign of confidence in our outlook,” he said.

Revenue from its Australia and New Zealand markets slid by 4.8 per cent to $533 million as a “direct consequence” of a restructured sales strategy while US market revenue rose 30 per cent to $83 million.

A2 Milk, which has been pipped by smaller player Bubs Australia in supplying infant formula to the US and had its own application “deferred” by the US Food and Drug Administration (FDA), is still open to the market opportunity, but Bortolussi played down its significance. He said it would have been unlikely to have made a material difference to the company’s outlook.

“It’s a very big market and profitable, but it’s very concentrated and highly competitive ... when you look at others that have entered the category over there, they’ve really struggled to gain any significant share and develop a profitable sustainable business,” Bortolussi said.

The $NZ3.62 billion company stands by ready to support “mostly from a humanitarian basis” to ensure mothers and babies have access to infant formula.

“If we ever get that opportunity in the future, and there’s a commercial opportunity in the longer term, then we’d explore that. It’s not a big deal,” Bortolussi said.

“Even if we had have received FDA approval, I doubt whether that would have changed our outlook. It would be significant to our US business, but not to the a2 Milk company overall.”

The company will be forced to raise prices on its products amid significant increases in global dairy commodity prices, as well as cost pressure across the supply chain, including logistics, freight warehousing and employee costs.

Citi analysts, which have a neutral rating on A2 Milk, said the company’s net profits overshot expectations by 7 per cent, driven by “better-than-expected” performance in China.