Australian Bananas has teamed up once again with NRL player Billy Slater in its latest advertising campaign.
The campaign – which marks a 10 year partnership between Slater and Australian Bananas – is designed to promote active and healthy lifestyles and is inclusive of two exercise videos and a national competition titled ‘Get Fit With Billy’ where consumers have the chance to win a two hour boot camp session with the NRL star.
Slater who grew up in the banana-growing region of Innisfail, says that he hopes that the new campaign encourages Australian’s to incorporate bananas into their exercise routine.
“Australian bananas are perfect to eat before trying my fitness videos, because they give you longer lasting energy. Being a dad of two young kids, I also try to make sure that they eat bananas too, as an ideal alternative to unhealthy, highly-processed food and drinks,” said Slater.
Glenn Cardwell, Australian Bananas’ Accredited Practising Dietician echoed Slater’s comments, stating that bananas are an ideal snack to top up energy levels.
“Foods that are high in carbohydrate and low in fat are perfect and crucial for topping up the natural energy used by muscles. That’s why bananas are great for active Aussies. Not only do they taste great, they’re also nutritious and packed full of vitamin B6, vitamin C, folate, potassium, fibre and antioxidants,” he said.
Apples and peaches in New Zealand have been recalled and consumers are being warned to check their fruit following news that a Hawke's Bay packhouse worker has been diagnosed with Hepatitis A.
According to stuff.co.nz, the concerns surround some Royal Gala and New Zealand Beauty apples, as well as Golden Queen peaches sold in New Zealand over the past fortnight.
Some of the affected fruit, on sale between 27 February and 13 March, has been traced and recalled, but about 14,000 cartons have been sold and possibly consumed.
The Ministry for Primary Industries deputy director general, Scott Gallacher, said consumers need to do more than just wash their fruit if they believe they might have bought affected fruit. "If you have any concerns that the fruit you have was on sale between February 27 and March 13 then the best thing is you either cook it or if you have any doubt, put it out," he said.
Vietnam’s CT Group hopes to become the world’s biggest exporter of dragon fruit, and has plans to grow up to 10,000 hectares of the fruit in the Northern Territory.
According to the ABC, if the plan gets the go-ahead, the farm will be the biggest of its kind in Australia.
The CT Group has met with members of the Northern Territory government detailing its plans, and the NT Primary Industry minister, Willem Westra van Holthe, said the company currently has a lot of small farms growing dragon fruit in Vietnam, which makes logistics difficult.
"So what they're looking for is a big-scale farm, and the Northern Territory is a place they're seriously looking at, and they're looking at something like 10,000 hectares of dragon fruit in the NT,” he said, before adding that he thinks CT Group’s plans in Australia are a “terrific idea”.
"It would provide jobs for Territorians, I have no doubt about that. They'll need to buy irrigation equipment, set the farm up, they're talking about a processing facility as well, so there will need to be some building and there'll definitely be some significant benefits flowing just from that,” he said.
A new $70 million partnership between SPC Ardmona and Woolworths has been announced and will see an extra 24,000 tonnes of navy beans, tomatoes and other fruit sourced locally.
The additional volume generated by the partnership will require the equivalent of 86,000 fruit trees in the Goulburn Valley, where the livelihood of growers has been in doubt recently, following SPC’s struggles to compete against cheap imports and the high Australian dollar.
The agreement will also triple the tonnage over the next five years of Australian grown tomatoes that SPC supplies to Woolworths, with a new range of Woolworths Select and SPC Canned Tomatoes available in stores this October.
From 2015, SPC will begin supplying all fruit for Woolworths Select fruit snacks and jelly snacks, and for the next five years, will continue to supply 100 per cent of fruit for the Woolworths Select Multi-serve fruit range.
SPC managing director Peter Kelly said the new partnership shows that Woolworths acknowledges Australian consumers’ growing interest in where their food comes from, and will give certainty to growers trying to rebuild their capacity.
The agreement with Woolworths will help to repair the major decline in SPC’s profitability caused by illegal dumping, unfair tariffs and the strong Australian dollar, Kelly said.
"The share of Australian tomatoes has declined 67 percent in the last 10 years. SPC’s new partnership with Woolworths means the tonnage of Australian grown tomatoes will triple over the next five years which will help resurrect our tomato industry so it’s a particularly great day for tomato growers.”
SPC has seen a massive surge in sales recently with more Australians supporting local companies and buying Australian made and grown products, Kelly said. This was partly driven by the #SPCSunday twitter campaign started by a Newcastle consumer, Linda Drummond.
"In Woolworths alone, we’ve seen a 60 percent increase in sales of SPC fruit in the first two months of this year so we’re hoping this will continue and move to our other great brands like Taylor’s Soups and sauces, IXL Jam and Goulburn Valley," he said.
Last month, Coca-Cola Amatil (SPC Ardmona's owner) and the Victorian government announced a $100 million investment plan, following the federal government's rejection of SPC's calls for assistance.
What the company says The solution to enjoying soup instantly is here! Wattie’s Squeeze & Stir soup delivers the goodness and flavour of real soup with a rich soup paste in a convenient single-serve sachet.
Wattie’s Squeeze & Stir soup is the perfect snacking solution for your mid-morning or late-afternoon slump and is now available in eight delicious flavours. This unique soup paste contains no preservatives and is full of flavour – simply squeeze the soup paste into a mug, add boiling water, stir and enjoy.
Now in two delicious new flavours, just in time for winter, Creamy Chicken and Sweetcorn & Chicken. The perfectly sized 70g single-serve will easily become a winter essential for your desk drawer, bag or briefcase.
Wattie’s Squeeze & Stir eight delicious flavours are available in the instant soup aisle of leading supermarkets nationwide. Retail price around $1.49 each.
Peak body for the dried fruits industry, Dried Fruits Australia has urged Sunbeam Foods to review its prices, sighting that they have either remained stagnant or have become worse than last year.
Chairman of the group, Mark King says that the only proposed increase in price was that of the two highest grades of sultanas which rose by 2.5 percent. King is calling for a review of the other varieties considering that the global price of sultanas has increased and that the Australian dollar has depreciated by 15 percent.
King told The Weekly Times Now that in addition to low prices, Sunbeam had raised the penalty for brown fruit by $100 per tonne, representing between $200 and $250 per tonne less than light grade fruit. King has described the changes as a “slap in the face”.
King noted that in contrast to Sunbeam, Australian Premium Dried Fruits – sunbeam’s main competitor – had increased its prices across all grades of light and dark sultanas with the exception of the top five-crown light grade which remained at the same price.
Fruit supply manager for Sunbeam Foods, Chris Ellis has allegedly met with both representatives of Dried Fruits Australia and growers to discuss the pricing strategy for 2014.
Supermarket giant Woolworths has said that tariffs on ‘dumped’ Italian organic tomatoes will directly affect consumers.
In February this year, the Anti-Dumping commission announced a 5.06 percent tariff on prepared and preserved tomatoes exported from Italy with a 26.35 percent tariff applying to ‘uncooperative producers’.
However Woolworths has now warned that consumers will have to bear the brunt of the charges should they wish to purchase tinned organic tomatoes as there is no real Australian for them, The Weekly Times Now reports.
“To meet the needs of consumers, Woolworths imports canned organic tomatoes from Italy as there is no Australian supplier of these products,” said the supermarket.
“While still a relatively small part of the total food market, organic foods are an imported segment and are strongly preferred by some Australian consumers.”
Woolworths says that 96 percent of the fruit and vegetables that it sells are Australian grown with the remaining four percent of imported food only sourced to cover seasonal shortages.
The ruling to impose tariffs has also received criticism from the European Union who have accused the Anti-Dumping Commission of flouting World Trade Agreement rules in its inquiry. The EU also accused the commission of failing to conduct a proper impact analysis.
According to the Weekly Times Now, Federal Industry Minister Ian Macfarlane is expected to announce a final ruling on the tariffs by March 21.
It was only a few weeks ago that the future of Australia’s last remaining fruit and vegetable processor, SPC Ardmona, was in doubt.
A steady influx of cheap imported tomatoes, a consistently strong Australian dollar and confusing regulation surrounding country of origin claims have all impacted on the processor, which warned it may have to cease trading in Australia.
SPCA reached out for government assistance to meet rising costs, a request that was initially met with a $25m pledge from Labor, but was later rejected by the Abbott government.
The processor also appealed to the Anti-Dumping Commission to have tariffs imposed on tomatoes imported from Italy on the basis that the cheap imports were causing material injury to local producers. The Anti-Dumping Commissioner ruled in favour of SPCA, and imposed a tariff of around nine precent on 14 Italian processed tomato brands.
The imposition of tariffs and increased consumer awareness of SPCA’s plight led to a steady increase in sales, but not enough to secure its future.
It wasn’t until late one Thursday night in early February that SPCA’s future would really take a turn for the better.
Newcastle resident and loyal SPCA customer, Linda Drummond pioneered a movement on Twitter that encouraged Australians to purchase SPC products over the weekend. She created the hashtag #SPCSunday which soon spread to various forms of social media including Instagram and Facebook.
Within less than 24 hours, the hashtag had been used in over 1,000 tweets and reached the likes of Australian celebrities including Magda Szubanski, Father Bob and Adam Spencer who were all eager to support the cause.
By the time Sunday rolled around, the hashtag was tweeted over 7,000 times and sales of SPCA products soared..
Food magazine recently spoke with Bronwyn Powell, the marketing and innovation director for SPC Ardmona about the #SPCSunday campaign and the impact that it has had on the business.
Powell said that sales in the lead up to #SPCSunday were already increasing, but since the campaign, more consumers have been reached than they could have possibly hoped for.
“In our key line and our key retailers we have increased sales by over 50 percent, which was actually happening even before #SPCSunday. We have had such great support from consumers, retailers and everyday Aussies, and now even more so,” she said.
“We are just overwhelmed with the everyday Australian supporter for our company really. So it’s amazing, it’s really been fantastic.”
When asked whether SPCA would consider integrating #SPCSunday into the company’s marketing activities, Powell said it is something that the company would ‘definitely’ consider.
“We are definitely looking at how we can continue to support and grow this idea whether it is instore or online with consumers. It’s only early days but trust me, my team are crazily thinking, about how we can help grow and support #SPCSundays and really connect with our consumers and the community.”
Since #SPCSunday, both Coca-Cola Amatil (SPCA’s owner) and the Victorian state government announced a new $100 million investment plan to assist the processor over a three year period. The cash injection will no doubt provide much needed assistance to the brand, however for the company to continue to prosper now and into the future, ongoing consumer support is vital.
Food magazine asked Powell what she believed Australia would lose if SPC was to close.
“There are a lot of things that we are going lose if we lose SPC. The first one that I have to say as the marketing director is great brands that have been around for nearly 100 years – Many of them people have grown up with. Household names like Ardmona, IXL jam, Goulburn Valley and Taylors more recently which is a newer brand, those brands will be lost and lost from a lot of our Australian childhood memories.
“And because we are an agricultural based company with Australian grown fruit and vegetables – we are going to actually lose a lot of Australian growers. And the sad thing for me, the thing that probably brought me the most emotion in this job was that we would be losing 100 year old pear trees that have gone through three generations of families.
“The other thing is that consumers are going to lose the reassurance that they are buying Australian, and when they are buying Aussie grown, and our products, I can assure you that they are clean, green and wholesome. We give consumers comfort that their food is premium quality and safe – that is critically important and something that we know and we can demonstrate.”
Powell says that differing standards in food safety is another concern that the Australian public will face should SPC close and shelf space be replaced with imported products. The call for stronger country of origin labelling and more rigorous testing of imported fruit was heightened last year after high levels of lead were detected in Chinese canned peaches. Tests on the fruit showed alarming high levels of lead – up to twice the amount that is legally permissible under the Australian and New Zealand food standard.
“One of the things I always say is actually look at where products come from… Have a look in the fine print and actually see where that product was really made and then ask yourself, do you really know what goes on in terms of the conditions that the product was made in? Do we really know if they have the same strict laws that we have in Australia around food safety?”
Powell explains that innovation within the Australian fruit sector is also something that the nation stands to lose.
“We would lose all of the future innovation that myself and my team have been working on. Just one of those is Goulburn Valley Perfect Fruit [soft serve fruit] which is currently in test market. We have loads of other ideas too that won’t be there if we go, as there is nobody else that really operates in fruit to offer that innovation in Australia. Fruit is at the core of what we do.”
Although SPCA has been enjoying a spate of increased support from consumers and retailers in recent months, ongoing sales is what’s required to to keep the company alive.
Spring Gully, a South Australian sauce and pickle manufacturer was in a similar predicament, albeit on a smaller scale, in mid-2013. The company entered voluntary administration with debts of $4.9 million in July, but showed stronger signs of life months later as a result of community and retail support.
Fellow South Australian food brand, Robern Menz launched the “Shop and Swap” campaign which encouraged consumers to swap one supermarket food item with its South Australian produced counterpart.
OneHarvest, one of Australia’s largest fruit and vegetable growing companies has licenced innovative British technology to reinvigorate the nation’s beetroot industry.
The once flourishing industry has taken a number of hits in recent years from cheap imported product, cannery closures and the exit of major processor Heinz. Entrepreneur Dick Smith made a concerted effort to save the industry by purchasing a canned crop of beetroot in 2012, only to be forced into a public giveaway when supermarkets refused to stock them.
However as The West reports, OneHarvest’s Love Beets however may just prove to be what the industry needs. Unlike the traditional forms sliced, cubed and canned beetroot that many Australians are used to, Love Beets are fresh-cooked baby beetroot that are packed into a vacuum-sealed pouch.
"It's quite a different product to what's been traditionally sold in the Australian market," Munton told The West.
"Beetroot is an iconic Australian flavour and the market has traditionally been with the beetroot in vinegar, sugar and basically cooked – stewed – in a can.
"With Love Beets, the beetroot is taken as a completely fresh baby beetroot that's peeled, nothing added and then that's placed into a vacuum-packed pouch and cooked in the pouch."
The technology was founded in England over 20 years ago where the licenced field-to-supermarket process has proved to be highly successful.
The Victorian state government gave OneHarvest a $150,000 grant towards the completion of a new $3.8m factory in Bairnsdale, Victoria which will be used to pack Love Beets. The new facility has also created 30 new jobs across both Victoria and NSW.
Munton said that while Love Beets had its reservations about entering the Australian market, he believes that the company’s unique product offering which includes a range of flavoured beetroot packs, will appeal to a new, and possibly younger market.
"We think we're coming in with a completely different product," said Munton.
"It's not soft and mushy and been sitting in a can for 12 months.
"We don't see that we are competing at all with the canned beetroot."
Love Beets will be stocked in major supermarket retailers around the country as early to mid 2014.
Yet the firm’s recent tribulations are a reminder of why I regularly choose to buy products at the supermarket that are more expensive than the alternative.
One reason is that Australian food standards are generally world-class when it comes to the amount of contamination allowed from metals such as lead and cadmium. Although it is not always possible to police this perfectly, these standards allow a high degree of confidence that Australian food is free from contamination.
In March last year, up to 16,000 diseased pig carcasses were found rotting in Shanghai’s Huangpu River, after a crackdown on black-market sales of substandard meat prompted the animals' owners to dump them.
Last year, my colleagues and I released a report on the state of food security in Asia. It highlighted serious environmental issues related to China’s food supply, stemming in part from the chronic pollution of China’s water and farmland.
Among other things, it showed that China’s rampant economic growth has come at a severe cost to its environment, effectively turning its rivers and lakes into industrial dumping grounds. As a result, 90% of groundwater in China is polluted, 65% severely so, with contaminants such as pesticides, fertilisers, and petrochemicals.
Along China’s vast coastline, 68,000 square kilometres of coastal waters are now classified as severely polluted. Figures from China’s National Marine Environmental Monitoring Centre show that in 2012, some 17 million tonnes of pollutants flowed through 72 of China’s rivers, including 93,000 tonnes of oil and a staggering 46,000 tonnes of heavy metals such as lead and cadmium.
The deadly combination of food, water and air pollution in China has led to a dramatic increase in the number of “cancer villages”, where high rates of cancer have risen in line with water and soil contamination.
Poor track record
This is not to say that all Chinese canned food is necessarily contaminated. Nor does it suggest that it is only China facing these issues. India, Bangladesh and Vietnam, to name a few, are also facing serious challenges to clean up pollution and contamination.
But for importers of Chinese food, China’s track record on food safety, and its systemic problem with severe and chronic pollution, should raise serious concerns.
Several reports have shown how deadly chemicals have infiltrated the Chinese food system, such as through the use of waste water to irrigate crops, and the presence of pesticides in market food. A 2012 review of the extent of lead contamination in China concluded that “the problem of lead pollution in China is a global problem".
Of greatest concern to Australian consumers of canned fruit should be a recent study in Zhejiang province, showing that oranges, grapes, pears and plums were contaminated with levels of chromium, copper, cadmium, mercury and lead well in excess of Chinese safety standards. It is worth noting that Chinese safety standards allow twice the level of lead permitted in Australian fruit.
Although a recent article in The Conversation suggested that the label of “cheap, dumped and frequently contaminated” attached to Chinese food is a shortsighted view, I would argue exactly the opposite.
China is attempting to make changes to the amount of pollution in its food chain, and clean up its environment. Yet the reality is that as the pressure for food and water continues to ramp up, food contamination is also likely to increase.
China’s environmental problems border on insurmountable, and when combined with systemic corruption in environmental monitoring and the greater profits to be gained from industrial output over agriculture, it makes for a bleak long-term outlook.
What does this mean for Australia?
China is already Australia’s largest supplier of prepared fruit. According to data from the UN Food and Agriculture Organisation, Australia imported just 3,000 tonnes of packaged Chinese fruit in 2001, rising to 27,000 tonnes a decade later. As a comparison, statistics prepared for the Australian Productivity Commission show that SPC Ardmona sold just over 36,000 tonnes of packaged fruit in 2012.
Australia’s last fresh fruit cannery is safe for now. But its demise would have caused a shortfall in packaged fruit that would need to be sourced from overseas. Given that China is Australia and the world’s largest supplier of prepared fruit, it’s likely that much of the shortfall would be sourced from China.
The challenges facing SPC Ardmona highlight the risks confronting both Australian food producers and consumers. The steady increase in cheap food imports means that Australian producers of food face an increasingly uneven playing field: one in which it is harder every day to stay profitable.
For Australian consumers, the increase of food imports from countries facing severe contamination issues – such as China – creates a difficult choice between the superior and more expensive Australian product and the often much cheaper import. Unfortunately, there are far too many consumers who are unaware of the potentially serious risks to their health of buying the import.
In denying federal assistance to SPC Ardmona, Prime Minister Tony Abbott has said he wants to signal the end of the corporate “free ride”. But he should bear in mind that the consequences of leaving Australian food manufacturing by the roadside are far greater than any short-term economic agenda.
Christopher G. Baker does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
The Australian Food and Grocery Council (AFGC) has announced its support of a $100 million co-investment from Coca-Cola Amatil and the Victorian to fruit processor SPC Ardmona, but says the investment needs to be followed by regulatory reform.
On 13 February, Coca-Cola Amatil (CCA) confirmed it will invest $78 million into SPC Ardmona and welcomed the decision by the Victorian government to invest $22 million over three years.
This followed the federal government’s rejection of SPCA’s plea for a $25m co-investment as part of a restructure plan to keep the company afloat.
AFGC CEO Gary Dawson said the SPCA situation should be a wakeup call to governments considering new regulatory cost imposts.
“From a broader industry perspective the challenge remains to get the settings right to kick-start the massive investment and re-investment needed if we are to capitalise on the unprecedented food export opportunities into Asia. The imperative is growth and the investment needed to drive productivity and competitiveness gains,” he said.
Dawson said food manufacturing should be seen as an industry which can deliver comparative advantage for Australia moving forward, delivering jobs and growth, and shouldn’t be burdened by additional regulatory costs.
“Any additional regulation that adds costs for business or consumers runs the risk of impeding vital investment and job creation.
"We call on all governments in Australia to reject any new regulation that adds costs to the manufacturing industry and to move quickly to remove existing unnecessary regulatory costs,” he said.
Coca-Cola Amatil and the Victorian government have announced a new $100 million investment plan to assist fruit processor SPC Ardmona and the Goulburn Valley.
CCA will invest $78 million into SPC Ardmona and welcomed the decision by the Victorian government to invest $22 million over three years.
The $100 million package will be invested over a three year period into efficiency measures and innovation at SPC Ardmona, the last remaining major fruit and vegetable processor in Australia.
It is estimated that in the Goulburn Valley region, more than 2,500 jobs are reliant on the ongoing operations of SPC Ardmona.
The Victorian government’s investment is conditional on a number of factors including:
The entering into of formal legal documentation which will set out the investment milestones upon which the financial assistance will be provided and include the condition of employment being maintained at a minimum level of 500 full time employees for three years
The $78 million contribution by CCA to the overall project cost.
The refund of all payments made under this agreement should SPCA cease business operations at Shepparton within five years of the agreement with the Victorian government
SPC Ardmona managing director Peter Kelly said “We are delighted with the support shown for our business case by Premier Napthine, Deputy Premier Peter Ryan and their government for the future of this important food industry. They have been unwavering in their determination to help the Goulburn Valley and have played a critical role in assisting us with our transformation plans for the business from a cannery to a modern food company.
“This $100 million capital investment package, while not the amount we originally planned, is significant and will be immediately put to work by our business to drive new product and packaging innovation and efficiency measures.”
Kelly said the new investment package will mean adjustments to the business plan, and he paid tribute to what he said were unprecedented levels of support from the Australian community for SPC Ardmona and its brands: SPC, Ardmona, Goulburn Valley, Taylor’s, IXL and Henry Jones.
“We are seeing a magnificent surge of support from retailers and consumers who are choosing to stock and buy our iconic Australian brands over cheap imports. Sales of our key SPC Ardmona products in major supermarkets soared on the back of last weekend’s phenomenal grassroots #SPCSunday social media campaign which generated several thousand Tweets and a staggering 15 million impressions as well as 3,000 new SPCA Facebook friends,” he said.
“While consumers are rallying behind us, retailers all over the country have been fantastic too. We have been receiving offers of new business and more in-store support – ideas like Australian made sections on shelf.”
Kelly said he has also been contacted by the University of Melbourne and Latrobe University offering research and technology expertise to help SPC Ardmona’s R&D and food technology needs.
“SPC Ardmona has a clear responsibility to bring innovation and great brands to market and I am increasingly optimistic that the Australian consumers can see the efforts we are making and will continue to consider the Australian products whenever they shop.
“At the end of the day the future of companies like ours are in the hands of consumers and we’re going to make sure we give consumers what they want,” he said.
Group managing director of CCA, Terry Davis also thanked the Victorian Premier and his government for their support. He welcomed news that Australian authorities would now address the removal of some unfair structural barriers which have been particularly damaging to the food processing sector.
“As a major manufacturer in Australia it has been difficult to understand how the New Zealand Government has been able to support its packaged fruit industry for so long with strong anti-dumping measures, and we have not.
“However last week’s Anti-Dumping Commission finding which showed SPCA was materially damaged by illegally dumped tomato products, and news this week that the Federal Government is working on trade measures to defend Australian companies against dumping of cheap imports, are very welcome,” he said.
“We would also like to see more done in the areas of tariffs on processed fruit imports and a greater enforcement of standards and inspections to prevent imports which may have unsafe levels of contaminants like lead.”
Davis also advised that there would be a material write down of CCA’s investment in SPC Ardmona.
CCA’s Board of Directors is comfortable with the returns expected for SPCA under the new investment package, but notwithstanding that, in order to right size the business, write downs will occur in the 2013 accounts. These will be detailed further on Tuesday at CCA’s full year results presentation,” he said.
Newcastle resident, Linda Drummond has pioneered a movement on social media in support of struggling Australian fruit and vegetable processor, SPC Ardmona in the form of #SPCSunday.
Drummond created the hashtag last night in an effort to encourage Australians to support the processor by enjoying SPC tinned fruit products with ice-cream on Sunday’s.
“Who doesn't remember those childhood desserts of peaches, pears or fruit salad and iceceam?,” said Drummond. “Let's relive those glory days and help support a community too. Let's make Sundays SPC Sunday. Serve up some SPC goodies on Sunday and share your pictures on social media with the hashtag #SPCsunday.”
Since her initial post at 10pm last night, the hashtag has been used in over 900 tweets by politicians, media personalities and the community.
Celebrities to get in on the action include household names such as Magda Szubanski, Father Bob, Peter Fitzsimons, Lisa Wilkinson, Cal Wilson, Adam Spencer, Tim Campbell and Yumi Stynes.
Liberal MP Sharman Stone tweeted “I’ll be enjoying some #SPCA products this #SPCsunday, will you? Remember SPC isn’t just fruit and baked beans, there’s a range of great stuff.”
The troubled food processor requested $25m in assistance last year as part of a restructure plan to keep the company afloat. SPC’s chief executive, Peter Kelly warned that the company would risk closure if the liberal government did not come through with the funding.
Prime Minister Tony Abbott has stood firm on his decision to reject SPC Ardmona’s plea for assistance, stating that the decision is final and will not be swayed by efforts from liberal MP Sharman Stone, who called upon cabinet to reconsider.
The troubled food processor requested $25m in assistance as part of a restructure plan to keep the company afloat – a figure that was promised by the previous Labor government.
Abbott formerly rejected SPCA’s request last week, arguing that the company needed to renegotiate ‘extraordinary’ workplace conditions that he said were “way in excess of the award” and largely responsible for the processor's financial trouble.
The Anti-Dumping Commission has reduced the tariffs placed on prepared and preserved tomatoes exported from Italy.
In July last year, the Anti-Dumping Commissioner initiated an investigation into the alleged dumping of cheap imported tomatoes from Italy following a request from troubled fruit and vegetable processor, SPC Ardmona.
Fruit processor SPC Ardmona is setting the record straight in regards to its workers’ allowances and conditions, arguing that recent claims made by the federal government are untrue.
Last week prime minister Tony Abbott formerly rejected SPCA’s request for $25 million in assistance to upgrade its Shepparton plant, arguing the company needed to renegotiate "extraordinary” workplace conditions which were "way in excess of the award", the ABC reports. Reported conditions include that SPC workers are paid up to 58 percent above award wage levels and receive nine weeks’ paid leave.
SPC has today (4 February) released a statement, claiming that Abbott’s comments are “mistaken and need to be refuted by the facts.”
According to the statement, the total cost of allowances for all production staff at SPC Ardmona for the entire year of 2013 was $116,467, which represents less than 0.1 percent of the business’s cost of goods for the year. In regards to leave entitlements, employees get 20 days annual leave, not nine weeks.
The statement goes on to explain that since 2011 32 percent of positions across the business have been made redundant and in December 2013, 73 employees in the company’s maintenance and trade function were made redundant.
SPC Ardmona’s managing director, Peter Kelly, said “We are doing our best to reduce all costs across the business, however the serious problems that have beset SPCA have not been because of labour costs and certainly not from the allowances, a fact borne out by the Productivity Commission’s recent analysis.
“The business has been severely damaged in recent times by a ‘perfect storm’ created by external economic factors – the high Australian dollar, which appreciated more than 50 percent from 2009 to 2013, has both enabled the flood of cheap imported product to be sold in Australia below the cost of production here, and also decimated the company’s export markets.
“In that period market share of private label canned fruit grew to 58 percent today, while SPC Ardmona canned fruit share declined to 33 percent. Our export market volumes declined by 90 percent in the past five years,” he said.
The company also lists adverse weather conditions, dumping of cheap imported fruit and vegetable products into Australia from countries with less stringent safety, environmental and labour standards, and the fact that there are no or very low tariffs imposed on imported fruit products from countries such as China and the European Union as contributors to SPC’s struggles.
The truth according to SPC
Claim: SPC Ardmona employees get “over generous” allowances.
Fact: The total allowances paid to SPC production staff in 2013 was $116,467, which represents less than 0.1 percent of the business’s cost of goods for the year.
Claim: There is a generous “wet” allowance of 58 cents per hour for cleaners
Fact: Zero ($0.00) paid in 2013.
Claim: SPC Ardmona employees get nine weeks paid leave a year.
Fact: SPCA employees get 20 days annual leave.
Claim: A five day Melbourne Cup long weekend.
Fact: Production staff accrue rostered days off (RDOs) during the year which SPCA requires them not to take during the peak season. Instead these RDOs are taken at the start of November, the optimum time for a plant shutdown to allow maintenance in preparation for the canning season from December to April. RDOs are not additional leave.
Claim: Sick leave is cashed out each year.
Fact: This was removed from the EBA in 2012.
Claim: Loading, or shift penalties are above the award.
Fact: SPCA’s are the same as industry standards and common to many Australian EBAs. Afternoon shift is a 20 percent and night shift at 30 percent.
Claim: Loadings on top of overtime.
Fact: Production workers do almost zero overtime.
Claim: Redundancy is in excess of the award.
Fact: This old condition was reduced in 2012 to a 52 week cap
According to The Age, that $25 million could have prompted a further $25 million from the state government and also up to $161 million in investment from CCA.
Andrews said the state government’s $30 million promise is not a hand-out, but a partnership and will help SPCA buy new equipment and upskill its staff, before asking the premier, Denis Napthine, to match the Opposition’s promise.
''This company and the thousands of jobs that rely on it are too important to lose. Time is running out and it's now up to Denis Napthine to match our offer and support this company and the thousands of workers and growers,” Andrews said.
However, the state government refused, accusing the Opposition of grandstanding but said they would consider offering more assistance – on top of the $4.4 million offered last year – after further discussions with SPC.
'We're certainly not going to commit a blank cheque without a plan attached, which is what Labor has done today. It's typical Labor fashion to spend money you don't have and ask questions later,'' said Victorian treasurer Michael O’Brien.
The working conditions of staff were also put in the spotlight, with the federal government citing the company’s enterprise agreement with workers as a contributor to its reluctance to provide financial assistance.
It was reported that SPC workers are paid up to 58 percent above award wage levels and receive nine weeks’ paid leave.
The political lobbying accompanying yesterday’s (2 February) government decision to withhold financial support from SPC Ardmona has overshadowed the big structural issues facing Australia’s preserved food industry.
The two major issues are the shift of market demand towards fresh food and the role of Chinese imports.
The decline of SPC Ardmona’s cannery business is not an isolated event. Heinz closed its cannery business in Goulburn Valley in 2012, Windsor Farm closed in Cowra, and only a few small players remain, mainly in NSW and WA.
Imports, mainly from China, have been singled out and demonised as “cheap, dumped and frequently contaminated”. This is a short-sighted perspective.
China is a big global player in international agribusiness. Chinese importing of fresh food provides opportunities for Australian exporters, but at the same time Chinese exports of canned food compete with Australian products in the local domestic market and in traditional export markets.
The “cheap, dumped and frequently contaminated” label will not stick for long.
China is stepping up consumer protection
While China’s canned food will remain cheap because of economies of scale and because canning technology is not much different in Australia and China, contamination is being addressed more seriously in China with new laws and regulations expected. The flow-on effect will mitigate Chinese consumer dissatisfaction with local food standards, but also improve the quality and safety of Chinese export products.
In January, China’s Supreme People’s Court announced an 18-clause guideline on how to handle civil disputes regarding food, drugs, cosmetics and dietary supplements.
The new guideline, together with an updated version of the consumer protection law, will come into effect on March 15, World Consumer Rights Day, and signal a new wave of regulatory action from the government to tackle China’s food safety problems. It gives consumers backing from the courts to sue manufacturers and retailers of unsafe food. Advertisers and publishers can be sued even before any actual harm is inflicted. Celebrities who endorse substandard products can also be sued if consumers feel they have been misled.
Since the milk powder scandal of 2008, much as been done to alleviate public anxiety and improve practices in the food industry. The Food Safety Law, replacing the outdated Food Hygiene Act, came into effect in 2009 and includes provisions on risk assessment methods, unification of food safety standards, improving supervision, and imposing tougher penalties on violators.
In March 2013, China’s State Food and Drug Administration (SFDA) was renamed to China Food and Drug Administration (CFDA) and elevated to a ministerial-level agency directly under the State Council, in an attempt to consolidate power and streamline regulation of food and drug safety.
The new guidelines change the balance of power between consumers and producers and rely less on local government enforcement. One challenge facing China in food safety regulation is that law enforcement and implementation at the local level do not match the original intent of the law and central policies. With clearer procedures on how to protect their rights, consumers are given more say on food safety. This will increase food producers’ opportunity cost as consumers are now more willing and able to participate in the monitoring process.
Previously, producers and manufacturers had an incentive to sacrifice quality in order to maximise profits, because the chance of being caught and penalised was low. But consumers and social media now play a much more active role in monitoring food safety and have successfully put pressure on the government to enforce food safety standards
Australia has a head start
While enforcement will work for the corporatised food export sector, China’s highly fragmented food industry will continue to face problems because of the scale of monitoring required. Almost 80% of the half a million food companies in China are classified as “cottage industry” with ten or less employees.
Like in Australia, there are social reasons to keep small producers afloat. Along this complex supply chain there is a need to balance the interests of producers, markets and consumers. China’s first policy document of 2014, the No.1 Central Document, underscored the importance of rural reform and the development of modern agriculture.
For Australian agribusiness, this entails opportunities and challenges. Chinese producers will for the foreseeable future not be able to satisfy the demand of urban middle class consumers for top quality food. Australia, in competition with New Zealand, has a head start in this market with an enviable and hard to replicate reputation for clean and fresh food.
On the other hand, Chinese exports will become more competitive in the preserved food market, in particular in such traditional segments as canned food, putting more pressure on Australian producers in those market segments. For SPC Ardmona and its supply chain, the farming communities in the Goulburn Valley, this will require a radical rethink of traditional products and a switch to new product lines.
The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.
The federal government has rejected the bid by the embattled food processing company SPC Ardmona for $25 million, in a victory for the Liberal economic “dries” and “a marker” for industry policy.
Announcing the decision Prime Minister Tony Abbott stressed that parent company Coca-Cola Amatil was profitable and well resourced and had begun an excellent restructuring of the SPC Ardmona. He was sure that Coca-Cola Amatil’s chairman, the highly respected David Gonski, “is not going to let the workers down”.
Cabinet spent three hours on the issue with all points of view canvassed. This followed an earlier discussion before Christmas. Abbott said the decision “sets an important marker”. The government would set the parameters to make sure that the climate for business was as good as it could be, but restructuring of companies should be led by business.
“This is a government which will make sure that the restructuring that some Australian businesses need, that some Australian sectors need, is led by business as it should be.”
The issue has divided the government, with Treasurer Joe Hockey strongly resisting the company’s push for the funding injection, while Industry Minister Ian Macfarlane has been sympathetic to its case. Agriculture Minister Barnaby Joyce was looking for a deal that would assist the Shepparton enterprise, which is the last fruit cannery in Australia.
With many local jobs at risk, local federal member Sharman Stone has publicly lobbied for assistance, which was also supported by a panel that the government set up including two senior business figures Catherine Livingstone and Dick Warburton and former Labor Industry Minister Greg Combet.
The SPC Ardmona decision follows the government’s earlier hard line on Holden, which is planning on closing production in Australia.
Abbott stressed that the company needed to renegotiate the enterprise agreement covering SPC Ardmona workers. He said this was not a matter of cutting wages but changing the conditions, for example for paying out sick leave and redundancy, which were “well in excess of the award”.
Ian Macfarlane said he had inherited the company’s submission from Labor and wanted to put it in front of the cabinet. The discussion had been extensive and there had been a fair hearing. The outcome was a “clear delineation” on industry policy.
Abbott said he was confident that with the needed changes SPC Ardmona could survive and flourish. He distinguished the government’s decision to not help SPC Ardmona from his pre-election promise to assist Cadbury, by saying that Cadbury had a tourism dimension and that the money was directed to tourism infrastructure.
Michelle Grattan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.