Here is an article from the Buy AustralianMagazine. I found it interesting enough to share! How SPC - style dark deal is killing Australian industry The much celebrated $70 million deal struck between Woolworths and SPC Ardmona has a dark side that nobody has appeared to recognize. By supporting SPC Ardmona Woolworths is actually completing a cynical marketing move by saving a company it almost destroyed in the first place. It is Woolworths (and Coles) who started importing tinned fruit at rock bottom prices that created the SPC disaster that required a $22 million bailout by the Victoria Government. The SPC-Woollies partnership will see an extra 24,000 tonnes of fruit, tomatoes and navy beans sourced locally for the last remaining Australian-owned fruit and vegetable processor. The additional volume will require the equivalent of 86,000 fruit trees in the Goulburn Valley. While it looks great the SPC deal is typical of how Australian food manufacturing is being destroyed by the price pressure of the chains and supported by consumers who take the cheapest product without regard for the cost to our future. Buying imported products by Woolworths made SPC uncompetitive and forced them to the brink of bankruptcy. Then they ride in and buy the products at cost price, and have the cheek to call themselves a champion of Australian manufacturing. This has happened with the vegetable industry too where they have decided Buy Australian means buying our farm products at China prices while our farmers struggle to make a living. And it cant go unnoticed that the fall in the Australian dollar - that makes local products cheaper and imports more expensive - occurred around the same time these deal were being struck. The SPC Ardmona Woolworths deal is typical of how Australian food manufacturing is being driven out of the system by low prices and foreign competition and it is being compounded by generic Australian Made products. Woolworths has made enormous capital out of telling the world that its generic tinned fruit comes from SPC - so why would anybody buy the SPC or Ardmona branded product? Woolworths has effectively destroyed the SPC Ardmona brand and placed the company at the mercy of the Australian dollar and international dumping programs all over again. To compound the SPC problem the deal has been struck at a break even rate that even the farmers admit is not good for business. Fruit grower Gary Godwill says SPC Ardmonas supply deal may not be sustainable and believes the company will only break even on the deal. Coles and Woolworths have been accused of pressuring suppliers since launching the crazy price war in 2010 and this SPC deal appears to be a prima facie case.
Posted on: Mon, 07 Apr 2014 02:36:13 +0000
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