SUPERMARKET giant Woolworths has signed a $70 million, five-year deal with embattled fruit processor SPC Ardmona.
The deal will see an extra 24,000 tonnes of fruit, tomatoes and navy beans sourced locally for the last remaining Australian owned fruit and vegetable processor.
Additional volume generated as a result of the new partnership will require the equivalent of 86,000 fruit trees in the Goulburn Valley, according to SPCA.
The agreement will also triple the tonnage over the next five years of Australian grown tomatoes that SPCA supplies to Woolworths, with a new range of Woolworths Select and SPC Canned Tomatoes available in stores this October.
From 2015, SPCA 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.
The deal comes after the Abbott government rejected SPCA’s calls for $25 million in federal funding for a co-investment plan in January.
On February 13, the Victorian government announced a $22 million contribution to a critical $100 million co-investment package with SPCA's parent company, Coca Cola Amatil (CCA), to help modernise the Shepparton fruit processing plant.
Woolworths managing director of supermarkets and petrol, Tjeerd Jegen, said in a statement he was pleased the deal would give the company, their workers and growers some long-term certainty.
“We know that our customers want to buy good Australian grown products and this deal will see Woolworths Select brand tinned fruit continue to be grown in Australia by Australians,” he said.
“Following our switch to SPC supplied canned fruit, sales increased by 48 per cent.
"This is the first time we have seen growth in the canned fruit category for some time.
“This brings certainty to SPC and the farmers who supply our select brand so they can now invest in their businesses with the confidence of knowing Woolworths will stand beside them for the long-term.
“Woolworths will of course continue to sell SPC’s brands like SPC, Goulburn Valley and Ardmona. Together this means SPC Ardmona will be Woolworths’ largest supplier of tinned fruit."
SPCA managing director Peter Kelly said the long-term partnership was very welcome news for industry, Australian growers and consumers, and important for the certainty it gives growers to start rebuilding their capacity.
“Woolworths has really embraced the fact that Aussie consumers are demanding more and more home-grown products," he said in a statement.
"Consumers really do care where their food comes from."
“SPC is so grateful for the unprecedented loyalty being shown for our brands from everyday Australians who really do care where their food comes from."
Surge in sales
Mr Kelly said SPCA had recently seen a massive surge in sales as more Australians opted to get behind local companies and buy Australian made and grown products.
He said this was partly driven by the grass roots #SPCSunday Twitter campaign started by a loyal consumer, Newcastle’s Linda Drummond, and is still going strong.
"In Woolworths alone, we’ve seen a 60 per cent 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.
"We are very grateful for the unprecedented loyalty being shown for our brands from everyday Australian consumers."
Mr Kelly said the agreement with Woolworths would start to help repair the major decline in SPC’s profitability caused by illegal dumping, unfair tariffs and the strong Australian dollar over a long period.
"The share of Australian tomatoes has declined 67 per cent in the last ten years,” he said.
“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.”
People power prevails
Farmer and industry groups including the Victorian Farmers Federation (VFF) and Ausveg have welcomed today's announcement.
VFF president Peter Tuohey said the VFF and others had run campaigns for the past 18 months urging consumers to demand supermarkets use Australian-grown produce in their house brand lines.
“Ultimately, it’s consumers who’ve made the difference, by sending a clear message to Woolworths and Coles that they want to eat Australian food – not snack packs and tinned fruit from China, South Africa or Swaziland," Mr Tuohey said in a statement.
“Woolworths deserves the praise of farmers right along the eastern seaboard, given its contract with SPCA means more Australian tomatoes, navy beans and fruit will be grown, processed and sold in our supermarkets.
“More locally grown and processed produce, means greater security and certainty for fruit growers, SPCA workers and the businesses that rely on them.”
Ausveg - the advocacy group representing Australia's vegetable industry - welcomed the deal, which follows similar contracts last spring with the supermarket duopoly.
Woolworths and Coles now source 100pc of their respective Select and Smart Buy frozen vegetable lines from Australian growers. ALDI also sources its 825g canned fruit range from SPCA.
“This deal is a huge win for Australian fruit and vegetable growers who have seen vegetable processing plants shutting their doors in droves over the past three years, due to issues which include the dumping of foreign product,” said Ausveg spokesperson, Hugh Gurney.
The Anti-Dumping Commission reported in February that 56pc of prepared or preserved tomatoes from Italy were exported at dumped prices, causing material injury to the industry.
“We hope that initiatives like this deal will help to mitigate the devastating toll that cheaply produced dumped foreign product has taken on our growers and processors,” Mr Gurney said.