SPC Ardmona (SPCA) is last remaining
major fruit and vegetable processor company in Australia .SPC Ardmona manages brands that include SPC,
Ardmona, Goulburn Valley, IXL, Southern Cross and Taylor’s. SPCA owns a canning
factory in Shepparton and another one Kyabram , Victoria. SPCA closed its Mooroopna processing plant in 2011, which impacted
local economy as it was the main source of income of that area.
SPC Ardmona was formed in 2002 through union of Shepparton
Preserving Company and Ardmona.On 25 February 2005, Coca-Cola Amatil took over
SPCA.
2.
Overview of the literature
During the year 2009 Australia’s leading
soft drink company Coca-Cola Amatil, recorded profit of $189.8 million.
Amatil’s Food & Services division, which struggled due to the recent
droughts in the country, made a significant improvement. Their foundation food
business – SPC Ardmona also made progress in all major categories – fruit,
fruit snacks, baked beans & spaghetti, and after the completion and re-structuring
of SPCA’s operations in the Goulburn Valley $3 million of profit was recorded by the company
However significant rise in imported
private label products started negative impact on the Australian food
manufacturing sector. Later during mid-2010 SPC Ardmona cut down canning quotas and informed
their supplier that they will not be able to deal with all the peaches and pear
produced in the coming season. It was reduced by 25%.
Then started
to develop concerns for SPC
Ardmona brand which
resulted in large job cuts and closure of their Mooroopna plant in 2011 which
use to produce canned tomatoes, bulk-packed tomato pastes and crushed
tomato products. In
2012 Victorian Government gave 3.9 million to the company to help save some jobs that were lost due to
reorganization of SPC Ardmona which was in crisis due to high increase of
imported food.
Rising costs and the considerable strengthening of the
Australian dollar tainted the trading business significantly for Australian
manufacturers and SPC Ardmona cut-back affected
Australian farmers. SPC
started effecting Coca-Cola Amatil results. There was 22% drop in CCA revenue.
Overall, there was 2 per cent rise in alcohol, food & services due to a good
amount of revenue from spirits and alcoholic beverages but there was a decline in
SPC Ardmona earnings
To save
the local food industry SPC Ardmona requested the Australian government to
place emergency tariffs on cheap imported products as the market share of
imported processed fruits and tomatoes had grown to 58%. Labels on the
products were pretty confusing for the local people. Woolworths had products
labelled from South Africa whereas Coles had products labelled as made from
local and imported ingredients
SPC Ardmona requested to Productivity Commission to run safeguard inquiries on the foreign import fruits and tomatoes which are impacting the Australian local market. The World trade Organization members investigated under the Safeguards Agreement whether tariffs on imported processed fruits and tomatoes are suitable to apply SPC Ardmona appreciated the announcement that new Anti-Dumping Commission has started a investigation into peaches being imported from South Africa and tomatoes imported from Italy.
But SPC Ardmona was disappointment in the Productivity
Commission’s final report, which declined to put provisional safeguard tariffs
on imported processed tomato and fruit products. In October 2013 the company asked
financial help from the Federal and Victorian governments. SPCA asked for total
$50 million which included 25$ million from state and 25$ million from federal
The
Australian Government’s decided not to invest $25 million in SPC Ardmona raised
more concerns for the local company. Mr Tony Abbott spoke against SPCA
agreement with AMNU (Australian Manufacturing Workers Union). Mr Abbott said it
be ‘‘pretty extraordinary’’, with worker
still getting wet allowances, overtime,
ability to cash out sick pay, and redundancy payouts of up to two years. Later SPC Ardmona responded to government
claim about workers’ “over generous” allowances by showing facts and figures
which was totally opposite to what Mr Tony Abbot claimed.
Recently
however, the Victorian
Government announced
that to provide $22 million to SPCA. Government said it will give $22 million
with a future $100 million investment in the company (which included $78
million from its parent CCA company) to re construct the Shepparton plant.SPC
Ardmona promised to have assured full-time employment for at least
500 employees as per the agreement. Recently SPCA signed a deal with Woolworths to supply 24,000 tonnes of extra local
product which is worth $70 million over the next 5 years. It includes beans, canned tomato soups and all its home brand fruit.
SPCA
managing director, Peter Kelly said that Australian local customers are
supporting their products in spite of the entire recent crisis due to which
sales in the first 2 months of 2014 increased by 60% at Woolworths alone.