Struggling food processor SPC Ardmona has announced a $70 million deal with Woolworths. Source: AAP
PEOPLE power, and the federal government's refusal to help SPC Ardmona, have been credited for a $70 million deal that has breathed new life into the food processor's fortunes.
Confirming the deal to supply an extra 24,000 tonnes of fruit over five years to Woolworths, SPC managing director Peter Kelly said Australians had rallied behind the label.
Less than two months after the coalition refused to contribute $25 million to an assistance package for the ailing company, Mr Kelly said the company's unsuccessful bid for government help focused attention on the business.
"It was probably the best $25 million we never got because it raised with consumers everywhere the issues that SPC is facing," he told ABC TV on Tuesday.
Prime Minister Tony Abbott said he always believed SPC was a sound operation and only the management and staff could save the business.
"It has been able to do that without $25 million from the government," Mr Abbott said on Tuesday.
SPC's Woolworths-branded peach and pear sales have increased by 60 per cent in 2014.
Mr Kelly said Australians had heard the company's story and were buying its products in numbers never anticipated.
"That's what caused the turnaround. Not anything else."
Consumers had started to question where their food came from, Mr Kelly said.
AUSVEG, the peak body for Australian vegetable growers, said the SPC Ardmona deal was a huge win but the government needed to do more to stop the ongoing threat posed by the dumping of foreign products.
"We have seen a number of Australian frozen and canning producers shut their doors in the last three years, and this includes iconic brands like Rosella, who have been really struggling to survive," AUSVEG spokesman Hugh Gurney told AAP on Tuesday.
"It's largely due to imports coming in from overseas and really flooding the market."
The practice of dumping - in which a product is exported at a price below its cost of production - is a major problem for Australian canned fruit and vegetable firms.
Cans of tomatoes from Italy can sell for as low as 68 cents, while a similar Australian product can cost three times that.
The federal government's decision in January not to help SPC, despite the prospect of job losses, unleashed widespread support for the company on Twitter and other social media.
Federal Liberal backbencher Sharman Stone was highly critical of the government's refusal to provide assistance, accusing the prime minister of lying when he blamed over-generous workplace entitlements for the decision.
Dr Stone said the Woolworths deal did not make it right for the government to reject SPC's pleas for help.
"This deal wouldn't have even been on the table but for the massive customer response to SPCA's product," said the Murray MP, whose electorate includes the Shepparton cannery.
She described the consumer campaign as a "cry from the heart" from Australians who put "their money where their mouth was".
"They Facebooked, and texted and tweeted, and said go buy Australian preserved fruit," she told AAP.
The Woolworths agreement, in which SPC will supply fruit, including tomatoes, for the retailers' home-brand line, will repair a major decline in its profitability.
The Victorian government is also taking credit for the company's good fortune, after it stepped in to offer SPC $22 million as part of a $100 million co-investment deal.
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