SPC rattles the can

20 Dec, 2013 04:37 AM
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9
 
We are fighting every inch of the way for our business and the growers and farmers

COCA-COLA Amatil has agreed to a number of conditions put by the government to clear the way for a taxpayer cash injection into its fruit canning ­subsidiary SPC Ardmona, putting pressure on the federal cabinet to approve the deal when it next meets in January.

The conditions include a proviso to control wages of workers at SPCA's Victorian plants, sources said, which some ministers consider too generous.

SPCA has also promised to deliver productivity gains and focus on developing new products if it gets the money, The Australian Financial Review reports.

Any financial assistance will be fiercely opposed by economically conservative members of cabinet who have briefed journalists against it, emboldened by the government's recent decision not to bail out GM Holden.

Prime Minister Tony Abbott appeared to talk tough on SPCA's request for $25 million in funding after it was discussed at the last cabinet meeting for the year. However, sources said Mr Abbott was sympathetic to the company and its willingness to co-operate.

"They've certainly made an approach to the government and the government is considering their approach. The difficulty that I have is that if we say to any business 'here is a pot of money', there is a queue of businesses that are going to line up saying 'What about us?'," Mr Abbott said.

Industry Minister Ian Macfarlane will prepare a proposal on SPCA over the holiday break that will be considered at cabinet's first meeting in 2014.From cannery to modern food business

In a statement, SPCA said it was seeking the funding, which it hopes will be matched by a $25 million injection from the Victorian state government, to urgently transform the company from a cannery to modern food business.

"We are confident we have addressed every productivity issue the government has asked us about. We are fighting every inch of the way for our business and the growers and farmers of the Goulburn Valley," SPCA managing director Peter Kelly said.

"Discussions are continuing with the federal government and we are hopeful of a positive outcome."

A funding deal is supported by some within Mr Abbott's own party, including local MP Sharman Stone, and the Nationals.

"To see the orchards go out of business due to a decision not to fund new factory equipment would just be totally irrational.

"This is about helping SPCA overcome a perfect storm, all of which was none of their doing," Dr Stone said.

Dr Stone rejected Mr Abbott's reasoning that giving money to SPCA would lead to a deluge of other requests.

"These are all demands of our economy and it's not illegitimate. It's the business of the government to ­create the environment where people can thrive, but sometimes in creating that environment you've got to put ­taxpayer funds in investments which are going to return dividends in the longer run," she said.

Nationals senator Bridget McKenzie said SPCA should not be put into the same category as GM Holden.

"It's very, very different to the automotive industry, which has been subject to ongoing government support. There are various people that will argue the merits of that or otherwise. [But] I'm not viewing this in the same basket at all," she said.

A potential stumbling block is Victoria's reluctance to commit to providing another $25 million, to add up to SPCA's total request for $50 million of funding. The state government believes the burden should not be equally split, and the federal government should pay more.

Former industry minister Kim Carr, who pledged $25 million to SPCA in September if Labor was re-elected, called for more industry subsidies.

"It is short-sighted madness on behalf of the government to stand back and see manufacturing capabilities in this country leave forever rather than helping manufacturers weather the current storm so the jobs, the capacity and the investment remain [for] when the dollar returns to normal," he said.

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READER COMMENTS

mbh
20/12/2013 7:31:19 AM

Memo to Comrade Kim Carr; why would we subsidise Coca Cola operations at SPC? Coca Cola!! Tell me again how tough they're doing it... Labor, given half a chance, will nationalise all industries and have 'glorious' five year plans turning out army boots and Lada Nivas. Not in this lifetime thanks. Get out of our lives.
Holy Moly
20/12/2013 9:53:42 AM

mbh I will just remind you that it was Labor that cut tariffs floated the dollar sold off the Comm bank ect. Now what are your thoughts on the diesel subsidy to farmers and mining Cos?
Archibald
20/12/2013 11:33:30 AM

Holy Moly, Its not a diesel subsidy, its the refund of a tax, because the fuel is not used on roads funded by the Government.
Pete
20/12/2013 12:37:40 PM

Diesel subsidy?? ummm....maybe because the fuel isn't used on roads???
John Hine
22/12/2013 5:00:08 PM

Don't forget that Coca Cola Amatil is 70% Australian owned. However, surely it's all about innovation as well as productivity? No use being super efficient if fewer people are buying canned fruit. They need to look at making something people will buy. BUT that may mean farmers have to grow something else other than peaches and pears.
REALIST
22/12/2013 10:14:59 PM

REGRETTABLY WE AND OUR FAMILIES DO NOT LIVE ON A BOWL OF RICE 3 TIMES A DAY SO WE CAN'T MATCH THE ULTRA LOW COSTS OF DOING BUSINESS IN ASIA. THAT'S WHY WE ARE CONTINUING TO LOSE OUR MANUFACTURING TO ASIAN PLANTS WHERE WAGES ARE 20 TIMES LOWER AND THAT'S A FACT.
Denis Miller
30/12/2013 9:45:45 AM

Back in the 50's and 60's SPC was owned mainly by the local orchardists; the business exported over 50% to the UK - until the UK joined the EU. Most of the process workers were Queenslander itinerants who came south at the end of the cane cutting. SPC and Ardmona were, might still be, the biggest income source into the Goulburn Valley. But the old orchards are in a bad way, rising water table from over-irrigation has brought up the salt...
MacGregor
31/01/2014 8:45:20 AM

Lets call a spade a spade, the trouble at Ardmona is the profligate Enterprise Bargaining Agreement forced upon weak management by predatory unions, whose attitude is that another Government bail out will be sought when the going gets tough. Kim "Marx" Carr would have obliged for whatever the cosy arrangement between management and unions had requested.
Caz
4/02/2014 10:27:07 AM

Perhaps, MacGregor, you'd like Aussie workers to earn twenty times less to bring them in line with Asian workers' super-low wages, which 'Realist' righlty points out is the real problem here.

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Sorry did i get it wrong..? Rankins Springs is still open..?!
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No doubt a few frosted Freddies out there who will wish they had taken a closer look at the AGC
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Matthew, I was wondering if you had followed up this story with the farmer after the whole