Former Kellogg boss says Australia needs to lift its game Manufacturing Michael Smith David Mackay David Mackay, the former chief executive of global breakfast cereal giant Kellogg Co, says Australia risks missing an opportunity to revive its manufacturing base unless it starts making long-term investments in the consumer goods industry.Mr Mackay, an Australian who ran Kellogg for four years, said Australia needed to lower its cost base and attract the right kind of foreign investment to help the nation's food businesses grow. 
"We are so well positioned if you think about the population in Asia, and yet we may not be galvanising the true ability we have," Mr Mackay said. "People talk about Australia as the food bowl of Asia. That is a massive opportunity but it is very hard to get traction in something like that ... you have to invest in heavily and the returns are probably a decade away."
Mr Mackay said though there was small-scale foreign investment in Australian agriculture companies, the manufacturing base was eroding because multinationals were swallowing up many local companies and costs were too high.
'The cost infrastructure in Australia at some point needs addressing: wages, benefits, the status of occupational health and safety and workers' compensation."
He points to statistics that show Australian manufacturing wages were $42 an hour, the second highest in the world. This compares with $28 in New Zealand and about the same amount in the United States, where he has been running businesses for decades.
Fast-moving consumer goods make up about only 7-8 per cent of jobs in the Australian manufacturing sector compared with 14-15 per cent 20 years ago, he said.
Mr Mackay climbed the ranks of Kellogg, the company that makes Rice Krispies and Special K, running its Australian and British operations before moving to the US as chief operating officer of the global company, becoming chief executive from 2006 to 2011.
While he was credited with boosting the nutritional profile of cereals as the debate on sugar intensified, launching new products and growing through acquisitions, his final years in the job were difficult due to tough cereal sales and two product recalls.
"In both instances we took what we believe was the correct approach, which was to act immediately with an abundance of caution, so we could never be accused of not putting consumers first. But you suddenly become the focus of the media because you have moved first," he said of the recalls.
"If you don't act in the best interests of consumers and put them first then you don't have a legitimate right to be in business long term."
He was also chairman of spirits group Beam and oversaw the $US16 billion ($22 billion) sale of the company to Japan's Suntory last year, at huge multiples in one of the world's biggest deals that year.