Shoppers face price hikes, shortages in wake of flood

GOT MILK? Woolworths shelves at Ashgrove. Picture: David Kapernick

CONSUMERS will be hit with a wave of price hikes and some food shortages as the business sector put the cost of Queensland's floods at about $6 billion, making it the costliest disaster in Australia's history.

The State Government has also been receiving isolated complaints of profiteering and price gouging by retailers, although the number of incidents is small.

The sugar industry has put the bill for its losses at about $500 million, a figure that could grow substantially if there are any more significant rain events before the May harvest. Price increases are already flowing into the market for sugar.

The agricultural sector has put its losses at $1 billion, and the commercial sector said 10,000 businesses had been directly impacted by the disaster, which had cost $460 million a day at its peak.

The coal and tourism industries have also been heavily affected.

In comparison with the estimated $6 billion from risk assessors AIR Worldwide, insurers paid $2 billion after a Sydney hailstorm in 1999 and $1 billion after a Newcastle earthquake in 1989.

Although the Lockyer Valley food bowl was devastated by the floods, most of the crops had been harvested, according to Agforce president Brent Finlay.

Shortages can still be expected in milk, bread and meat, but this could be caused by panic buying, seasonal issues and farmers' inability to get their product to market because of infrastructure damage.

The major chains are expected to have all stores reopened in the next few days after more than a dozen were closed by either flood damage or power cuts.

Premier Anna Bligh said she had heard rumours of profiteering, and Fair Trading had received several complaints relating to bread, meat and milk price gouging.

Ms Bligh said shopkeepers had told her they could not turn against their customers now.

"So I certainly haven't seen any verified reports but I do think people are worried about it and, in an event like this, there's been a lot of wild rumours.''

The National Retailers Association said supply and demand would cause prices to spike, and Queensland provided 28 per cent of the national fruit and vegetable market so price increases were likely.

NRA chief executive Gary Black said: "There will be some impact over time because of shortages.''

Agforce said there could be shortages for basics, such as like barley, wheat and chickpeas, until September.

Lamb prices are already at record highs.

Beef supply should be plentiful, but farmers will be dramatically impacted by damage to their equipment as well as roads.

source: news.com.au