Abstract
Recent volatility in food and energy prices reinforces the need to understand the relationship between increasing consolidation of food distribution centres, increasing food miles and food prices. Australian food supply chains have stretched in recent years in response to consolidation policies of the dominant supermarkets. Seeking to maximise economic efficiencies, supermarkets have reduced the number of distribution centres and streamlined the food supply chain. While the experience of the Queensland floods and cyclones has highlighted the fragility of Australia's food supply chain to transport and other key service disruptions, the everyday impact of the lengthening of the food supply chain on Australian households has not yet been quantified. Although there are several studies that have undertaken food price surveys and determined whether there was an association between food prices and categories of remoteness, there are discrepancies in their results. To date there has not been an analysis undertaken that identifies what factors are responsible for food pricing variability encountered in food pricing surveys. In this research we use spatial econometric techniques to investigate and quantify the relationship between food prices, food miles and other factors influencing food prices in Queensland. Results show several distance related variables tied to distribution centre locations and food transport modes (road, rail, sea, air) as well as store type are significant determinants of food pricing in the study area. These results reveal the nature of inconsistencies in previous studies as we find accessibility is a less robust determinant of food bundle pricing than the spatial and non-spatial determinants of pricing employed here.