Woolworths is being urged to honour the spirit of its $70-million rescue deal with Victorian company SPC Ardmona following reports it may walk away from the deal.
The supermarket giant signed the deal in 2014 to take produce from Victorian supplier based at Shepparton, in the state’s north, for its private-label line of tinned fruit, saving hundreds of jobs.
Woolworths has now confirmed it was reviewing the volume of deciduous fruits required for 2017.
Victorian Regional Development Minister Jaala Pulford said Woolworths needs to be “very conscious of the spirit of the arrangement” that they entered into.
“We want to see Woolworths honouring the spirit of the agreement that they entered into and continuing to play their part in what is such an important Victorian icon,” she told the ABC.
“The Victorian Government has been doing its part, SPC Ardmona and Coca Cola Amatil have been doing their part.”
The supermarket giant said it was having ongoing discussions with SPC Ardmona and that it regularly reviewed its sourcing agreements to ensure the best value.
But there are fears hundreds of jobs could be affected if the company changes the volume of deciduous fruits required for 2017.
Woolworths said it was committed to having Australian-sourced canned fruit and canned tomatoes from local manufacturers.
Commitment important for Goulburn Valley
Ms Pulford said one of the main elements of the agreement was that there would be “some confidence” about Woolworth’s plan over the next five years.
“I think all parties to the arrangement that was entered into in 2014 would have reasonably expected that they were for five years,” she said.
“That’s certainly the way the Victorian Government has approached this.”
SPC Ardmona’s comeback
The Victorian company almost closed in 2014, after being buffeted by imported produce and the high Australian dollar.
Ms Pulford said great progress had been made turning the company around in terms of trying hard to reach new export markets.
“I’ve seen the new production line that they’ve put in and the new product they’re developing for the Chinese market but Woolworths is meant to be doing their bit too,” she said.
“A commitment to the Goulburn Valley, a commitment to the farmers who supply the plant, is so important for the local economy.”
Woolworths chief executive Brad Banducci said the company was committed to an ongoing relationship with SPC Ardmona.
“We’re talking about the volumes that can be supplied and the consistency,” he said.
“That is really the conversation, not that we’re pulling out of the relationship with a long term partner.”
‘Storm in a teacup’
Suzanna Sheed, MP for Shepparton, where SPC’s canning facility is located, said the reports were very concerning.
“I’m waiting to hear from the managing director of SPC after he gets off a plane this morning and I’ll be meeting with the minister,” she said.
“It’d be very, very disappointing if a company like Woolworths walked away from a circumstance that was put in place when the company was in crisis, when our town, our region, is in a crisis situation.
“I’m hoping, to some extent, that this is a storm in a teacup. But it’s very concerning.”