The federal government’s decision last week to deny a promised $25 million assistance package to SPC Ardmona could be the critical blow for the Goulburn Valley horticulture industry. Three thousand jobs are at risk, and shockwaves from the company’s demise will be felt across the region.
When Shepparton local Fern Summer heard Tony Abbott’s announcement on Thursday last week, her heart sank.
“I was gutted,” she said. “It was not a good feeling, not a good feeling at all.”
Summer, who is a Greater Shepparton councillor but emphasised that she was speaking as a local resident and business owner, has been actively lobbying on behalf of the region’s horticulture industry since SPC Ardmona announced early last year that it was scaling back its capacity to purchase fruit from local growers by up to 50 per cent.
In Summer's view, there is much more at stake in SPCA’s downfall than many would realise.
“It’s not just immediate job losses, it’s the flow on effects. Businesses like logistics companies, dry-cleaning, 90 per cent of their business comes from SPCA. So people ask ‘why should we prop up a company’, well it’s not just propping up a company, it’s propping up a city,” she said.
The government’s decision last week came after the previous Labor government made a pre-election pledge to invest $25 million in SPCA to allow the company to upgrade its manufacturing plant. The Victorian government agreed to match any federal government commitment, while Coca-Cola Amatil — SPCA’s parent company — would provide an additional $90 million to see the project through.
All that came to a halt with Tony Abbott’s statement last Thursday, where he put the onus on CCA, which delivered a profit of $215 million in the first six months of this financial year, to fully fund the Shepparton factory upgrade.
He also urged the company to renegotiate its enterprise bargaining agreement, which he said currently contains “extremely generous redundancy provisions well in excess of the award”.
“This is a business which well and truly has the resources to ensure that SPC Ardmona is in a strong position to restructure,” he said.
Greater Shepparton mayor Jenny Houlihan disagrees with the Prime Minister’s assessment.
“[Tony Abbott] said the money was for the ordinary operations of the business, now that is completely wrong,” she said.
“This was part of a package for innovation and investment in new technology, change in production lines, being able to produce new products. So this was a new future.”
The government has also attracted criticism from within its own ranks. Liberal MP Sharman Stone, whose electorate of Murray covers the Goulburn Valley region, hit out at the Cabinet’s decision not to provide the funds.
“This isn’t a wage issue, this is more about cheap imports currently allowed on Australian supermarket shelves,” she told Fairfax Media.
Instances of dumping — selling imported products at a price below their original value — have been identified by Goulburn Valley horticulturalists as one of the chief problems affecting the industry’s revenue stream.
Following an application by SPC Ardmona last year, the Anti-Dumping Commission conducted an investigation into canned tomato products imported from Italy and made the preliminary finding that products were being dumped on the Australian market by significant margins. As a result, securities were imposed on particular goods to prevent injury to the Australian market.
A concurrent investigation into peach products imported from South Africa, however, found that only a negligible rate of dumping had occurred. As a result, the investigation was terminated late last year.
Houlihan said that the government “could have been more proactive” in alleviating the pain caused by cheap imports.
“The government decided … that they would not be involved in any tariffs or any protection at all,” she said, in relation to imported peach products.
“It was very surprising that they could not see that their actions were actually part of the difficulties that this company was having," adding that if SPCA were to close it would leave a “huge hole” in the local economy.
“It’s one of our iconic industries, it’s been here for over 100 years, which produces $650 million of economic benefit annually. No community can afford to lose that out of the economy without having some serious detrimental effect, including increasing our already above average unemployment rate,” Houlihan said.
Greater Shepparton’s unemployment rate currently sits at around 7 per cent, and is projected to increase to 10 per cent if the food processing plant closes.
While factory workers would feel the immediate impacts of SPCA’s closure, the constant uncertainty around the future of the food processing plant is also taking a toll on local growers.
Goulburn Valley orchardist Doug Brown has seen his selling capacity of canning-variety peaches reduced from around 500 to 300 tons annually over the past decade. With the heightened insecurity facing SPCA, he is now in a position where he can’t confidently plan for the next season’s harvest for fear of not being able to find a buyer for his produce.
“We’re stuck in the doldrums here, we’re just going around and around,” Brown said.
“It’s not an easy business seasonally, coping with heat and rain and hail, and then to motivate yourself through that and not know if next year is coming, it’s a bit draining really. You wonder how many times you’d have to get hit and stand back up again to think ‘well, I might just not stand up this time’."
With the government’s decision SPCA’s future now hangs in the balance, and with it the fate of many workers throughout the Goulburn Valley. In a statement issued by the company last Thursday, SPCA Managing Director Peter Kelly said SPCA is now reviewing its business plans with Coca-Cola Amatil.
Meanwhile, Victorian Premier Denis Napthine has expressed his government’s support for the company, however he stopped short of making any specific funding commitments.
“We do not believe there’s nothing further that can be done,“ he said in a press conference in Shepparton on Friday.
“We would like to work with SPCA Ardmona and Coca-Cola Amatil to look at what opportunities there may be, to examine plan B.”
SPCA is expected to make an announcement on the company’s future in the Goulburn Valley on February 18.
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