Finance Your Budget Woolworths decision to withdraw from deal could cripple town

Woolworths decision to withdraw from deal could cripple town

woolworths canned tomatoes
Canned fruits are picked at peak ripeness and packed straight away. Photo: AAP
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There are fears one of Victoria’s oldest and most famous regional manufacturing centres could be on the verge of financial ruin as Woolworths seems set to walk away from a multi-million dollar fruit-sourcing deal.

Woolworths signed a $70 million rescue deal with SPC Ardmona in 2014 for the Shepparton-based processor to suppy its private label tinned-fruit.

However Woolworths will no longer source canned tomatoes from SPC (Shepparton Preserving Company) and is reviewing its supply needs for other fruit from the company.

Victorian Regional Development Minister Jaala Pulford said Woolworths needed to be “very conscious of the spirit of the arrangement” into which it entered.

“It’d be very, very disappointing if a company like Woolworths walked away from a circumstance that was put in place when the company [SPC] was in crisis, when our town, our region, is in a crisis situation.

The Australian Manufacturing Workers’ Union (AMWU) national food division secretary Tom Hale told Fairfax Media Woolworths was behaving recklessly.

“This sort of behaviour from Woolworths is destroying the food industry in Australia … we must start talking about government regulation, about changing the law.”

The deal Woolworths struck with SPC Ardmona in 2014 saved the company from closure.

SPC, which has been producing canned fruit in Australia since the early 1900s – became SPC Ardmona in 2002 when it merged with Ardmona.

SPC Ardmona is in turn owned global beverage company Coca Cola Amatil.

SPC’s Mooroopna processing plant closed in 2011.

‘Next generation’ supermarket opens

As Woolworths deals with the fallout from its reported abandonment of SPC Ardmona, the supermarket giant has opened up a “next generation” store in Sydney.

Woolworths in Warringah Mall on Sydney’s Northern Beaches boasts organic and local fruit, and a bigger health range.

woolworths canned tomatoes
The nut bar offers 'nuts in bulk', Wooloworths said.
The bakery offers specially made cakes.
The new store is called a 'next generation' supermarket.
The cheese room with the in-house cheese expert.
Health food is a focus of the new shops.

Woolwsorths claimed the store was full of “new on-trend health foods” and “a dedicated butcher cutting the meat to customers’ specifications”.

Woolworths format development director Rob McCartney said; “Warringah Mall represents the largest investment to date in our store renewal program and has been designed following a great deal of time spent understanding what our local shoppers are looking for.

“The store puts health at the heart of the shopping experience, encouraging customers to make healthier choices for themselves and their families.”

Custom-made cakes will be offered from the bakery section as will a “dedicated full-time cheese expert” working from a “cheese room”.

– with ABC

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