Woolworths has announced as $17m plan that will see the retailer cease importing frozen vegetables for its private label products in favour of supporting local industry.
The move will see the supermarket giant commit to purchasing an additional 5100 tonnes of frozen vegetables from Simplot’s Devonport plant in Tasmania, replacing imports from China, Europe and New Zealand, The Australian reports.
Earlier this year Simplot announced that the influx of cheap imports coupled with consistently high operating costs could result in the closure of its Devonport and Bathurst Plants, affecting hundreds of jobs in both Tasmanian and NSW.
Simplot’s managing director, Terry O’Brien said that although the deal with Woolworths serves as welcome news, the company will still be forced to announce job cuts at its Devonport plant next week to reduce costs.
"We don't think buying (frozen vegetables) from us just because we are Australian grown is sustainable for Woolworths — or any buyer — in the long term; we want them to want our product because it is financially attractive too," Mr O'Brien said.
"To do that we have to bring down the costs of processing at Devonport; and the only way we can do that will involve new machinery, new processing methods and significantly less labour."
Tjeerd Jegan, managing director of Woolworths, said that the supermarkets decision to switch back to Australian grown frozen vegetables was driven by consumer demand for locally grown food.
"Our customers are passionate about great Aussie-grown food, and so are we,” said Jegen.
Woolworths’ decision mirrors a similar commitment announced by rival supermarket chain Coles last month. Coles announced that it will commit to increasing its Coles-branded frozen vegetable and potato volume by over 12 percent – making Coles’ Smart Buy frozen vegetable and potato products 100 percent Australian grown by next year.