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Don’t Worry We Will Soon Have Plenty of Rice, Pasta and Toilet Paper

At the moment there is chaos in supermarkets. Suburban Coles and Woolies stores have empty shelves and there have been raids on country supermarkets by city based people wanting to stock up. This panic seems to have been fueled by fake news that Australia is headed for a total lock down. Added to this is the fact that the supply of animals to abattoirs has contracted so that Coles and Woolies are running out of meat. The price of food is rising rapidly according to the Australian Bureau of Statistics.

But good news is just around the corner. Part of the problem is that the supermarkets operate ‘just in time’ supply chains. They don’t store supplies in stores but in central depots: deliveries are made at intervals to ensure that the shelves are always full. The model is based on predictions of demand which are normally very accurate. However panic buying obviously needs more deliveries to meet demand but these are limited by council by laws that curb out of hours truck movements.

The supermarket chains now say they have plenty of supplies because, with the exception of meat, manufacturers and distributors have ramped up supplies. It is a fine balance because no one in the supply chain wants to be caught holding surplus stocks. The new projections of demand are based around no shortages. As a consequence, hoarders who are speculating on making a killing on the black market are likely to be caught holding unsaleable goods.

If you want to know what goods will hit the shelves first – local goods are likely to dominate in the short term. This means that toilet rolls will be among the first things to appear and the supplies are likely to be abundant. Analysis of toilet paper supply chains shows they are likely to be providing above normal quantities in about three weeks. There will be an increase in supply of about 20%. Since the physical need for toilet paper is not likely to be greater than normal there should be plenty to go around.

Hand sanitisers are more problematic because demand for them is likely to be temporary. Manufacturers are unlikely to make big investments in new plant to make more of them. The best alternative is to wash your hands with soap more often.

It is obvious that some of the increased demand for food has been driven by the fact that many more people are deciding to work from home and are stocking up. However, the stories of people travelling from urban areas to raid regional stores and buy up the available stocks, so that there are no goods available for pensioners when pension days roll around, are disturbing. We have heard rumours that busloads of people are being brought from Melbourne to regional Victoria to buy goods. We have investigated this and have not found any evidence that it is true.

This is a time for measured responses not only from politicians but from the public. There is too much fake news around.

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