Workers at struggling food producer SPC Ardmona have warned of “economic devastation” across the Goulburn Valley if supermarket giant Woolworths dumps its canned fruit-sourcing arrangements.
The future of hundreds of jobs and farms hang in the balance after Woolworths revealed it was ending its canned tomatoes deal with SPC and wouldn’t say whether it will retain a five-year agreement struck in 2014 for other private-label tinned fruit. The Australian Manufacturing Workers’ Union has raised fears the company is considering sending fruit-sourcing offshore.
Tom Hale, the union’s national food division secretary, called for federal government to pull together all political parties and start drafting legislation to “help keep the Australian food industry alive”.
He said the voluntary Food and Grocery Code of Conduct should be enshrined into law, which would force big retailers to comply with minimum standards in dealings with suppliers, such as payments and disputes.
“The current system of self-regulation is not working,” Mr Hale said. “This sort of behaviour from Woolworths is destroying the food industry in Australia … we must start talking about government regulation, about changing the law.”
Woolworths came to the rescue of SPC’s struggling Shepparton cannery two years ago with a five-year deal to buy its private-label tinned fruit. But the agreement was made only on a handshake, and concerns have recently emerged over quality, sizing and supply.
It is understood the private label tomatoes are an “immaterial” part of Woolworths $70 million supply agreement with SPC Ardmona.
Woolworths’ decision to contract a new canned tomato supplier will reduce the size of its agreement with SPC.
Woolworths’ decision to contract a new canned tomato supplier will reduce the size of its agreement with SPC. Photo: Mario Borg
Negotiations over the other canned fruit are ongoing, however they are expected to conclude next week.
The union hit out at Woolworths on Thursday, and called on management to honour its commitment to growers, workers and the local region.
“Consumers are sick and tired of Woolworths trying to pull the wool over the eyes and hiding the fact they are destroying the Australian food industry by chopping and changing their food-sourcing agreements and potentially sending jobs offshore,” he said.
“Shoppers want Australian-grown, local produce, and these communities need Woolworths to stick to their commitments and continue to source their produce locally, instead of saying one thing and then doing another when they think the public aren’t watching.”
Federal Regional Development Minister Fiona Nash said Woolworths had “cashed in” on goodwill when it announced the five-year deal and gained national publicity.
“Now we learn Woolworths has already dumped SPC as a tinned tomato supplier for its Woolworths brand, and we read the supermarket is in talks with SPC over the future of supplying other lines to the supermarket,” she said.
“Woolworths should honour its word.”
Ms Nash, the deputy Nationals leader, said businesses and country communities needed certainty.
“Promising a five-year deal and then reviewing it or ripping it up midway through destroys certainty. It leaves businesses and families no confidence,” she said.
“It plays havoc with the lives of farmers and factory families who have made important decisions based on Woolworths’ word.”