Food processor SPC Ardmona has told tomato growers it will honour verbal agreements and pay them for supplying this season’s crop, despite losing a major contract.
Woolworths announced it was cancelling a contract with SPC for the supply of private label tinned tomatoes.
Growers have already planted this year’s crop, which is due to be harvested in autumn.
The loss of the contract came as a shock to tomato growers and their communities in Victoria’s Goulburn Valley.
Many have spent this week frantically trying to find out if they will be paid for the crops they have already planted this season.
Grower Louis Chirnside from Kerang on Wednesday said growers were informed by SPC that it would honour verbal agreements for them to supply this season’s crop.
“SPC has contacted all of their growers to let them know that even though we don’t have contracts with them, they will honour all assurances regarding price and quantity,” Mr Chirnside said.
“It’s very reassuring.”
Community furious with supermarket chain
Members of the Shepparton community are furious with Woolworths’ actions.
In 2014 Woolworths signed a five-year contract with SPC committing to the supply of a number of private label products.
The company was hailed as supporting Australian processors at a time when they were seen to be struggling and received a boost in sales.
Now, just two years later, Woolworths is walking away from the deal on private label tinned tomatoes and is looking to renegotiate its arrangement with tinned fruit.
In a statement, Woolworths said the agreement to supply tomatoes was separate to the five-year contract and the supermarket was still committed to the “spirit” of the five-year contract.
Sam Birrell, CEO of the Committee for Greater Shepparton, does not see it that way.
“The press that came out [in 2014], clearly states as a direct response to SPC’s immediate challenges, Woolworths signed a new five-year deal with SPC,” he said.
“It means SPC will supply Woolworths with canned apricots, peaches, apples and for the first time, tomatoes, for the select brand.
“I think that’s pretty clear that tomatoes were part of that five-year deal.”
PHOTO Orchardist Peter Hall is questioning the future for his fruit processor.
Peter Hall in his orchard of rotting fruit.
ABC RURAL: WARWICK LONG
Fruit growers are now concerned about future supply of canned fruit to Woolworths private label brands.
In their statement, Woolworths said they expected negotiations with SPC would “conclude positively this week”.
“If that goes, the [grower’s] product has no home; that’s a concern,” Peter Hall, an orchardist at Mooroopna, said.
Tomato grower Louis Chirnside said he was happy he would get paid for this season’s crop but his confidence in farming had been rocked.
“[Woolworths] have broken their word, SPC has kept their word,” he said.
“We’ll keep our word to supply them and when it comes to Woolworths, it is a really big thing to break your word.”