The taxpayer-funded service on Monday announced it would no longer deliver perishable foods including meats, seafood, dairy and fruit because of food safety and regulatory requirements across different states and territories.

The decision caused confusion and frustration among South Australia boutique food producers who were concerned with how the move would impact online orders and supply chains.

Australian Small Business and Family Enterprise Ombudsman Bruce Billson urged Australia Post to extend its self-imposed deadline and allow small businesses more time to consider alternative delivery options.

On Thursday, Australia Post conceded the June 30 date would cause “significant disruption” to small food producers and said it would work with Billson to “find solutions to support small business food producers”.

It said Billson would lead an industry working forum – to include representatives from industry bodies, the small business sector and artesian producers – to resolve cross-state regulatory issues.

“Through this new forum, we will better understand what our customer capabilities and needs are and work hand-in-hand with regulators to determine, where changes may be required,” Acting Australia Post Group CEO Rodney Boys said.

“I am so pleased Bruce Billson has agreed to co-chair this forum with Australia Post to develop a long-term, sustainable solution to support this growing eCommerce industry.”

Billson welcomed Australia Posts’ about-face.

“I am encouraged by the willingness of Australia Post and industry stakeholders to work together to help resolve any issues Australia Post is experiencing across its delivery network,” he said.

“So let’s roll up our sleeves so that we can achieve a better outcome for e-commerce powered small businesses who rely on these essential postage services.”

Australia Post will meet with Billson on Tuesday, with the broader industry group to begin meeting in May ahead of regular sessions.