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SPC Ardmona hammers Oz PM’s criticism of ‘over-generous’ conditions

By RJ Whitehead , 04-Feb-2014

Troubled SPC Ardmona has lashed out at claims by the Australian prime minister that the company is a “union shop”, and that the cause of its difficulties are because of “over generous” allowances and “extraordinary” staff conditions.

Last week Tony Abbott announced that the cabinet had knocked back a request from the Victorian food processor for A$25m (US$22.2m) in taxpayer assistance to upgrade its plant in Shepparton.

Instead, he said the company needed to renegotiate workplace conditions which were "way in excess of the award" and “extraordinary".

Treasurer Joe Hockey has also called SPC’s staff benefits as "astounding", and employment minister Eric Abetz described it as “over-generous”.

Comments mistaken

But in a two-page document released to the press, the company’s managing directory, Peter Kelly, has listed SPC’s take on the allegations, which he said are “mistaken” and “need to be refuted by the facts”.

Our employees are aware of the critical and urgent need to transform our business and the majority have responded in practical and financial ways to lift productivity to help secure our long term in future in the Goulburn Valley,” Kelly wrote.

We have been assessing work practices for many months, and have made significant improvements in productivity.”

The document states that the total cost of allowances for all production staff at SPC Ardmona for last year was A$116,467, a figure it said represented less than 0.1% of the company’s cost of goods for 2013. 

In addition, SPC Ardmona employees get 20 days annual leave, not nine weeks, Kelly wrote.

We are doing our best to reduce all costs across the business, however the serious problems that have beset SPCA have not been because of labour costs and certainly not from the allowances, a fact borne out by the Productivity Commission’s recent analysis.

The business has been severely damaged in recent times by a ‘perfect storm’ created by external economic factors. The high Australian dollar, which appreciated more than 50% from 2009 to 2013, has both enabled the flood of cheap imported product to be sold in Australia below the cost of production here, and also decimated the company’s export markets.”

Share plunging

Over that time, the market share of private-label canned fruit has grown to 58%, while SPC’s branded products share declined to 33%. Moreover, its export market volumes declined by 90% over the past five years. 

The other major factors not of our making have been the dumping of cheap imported fruit and vegetable products into the Australian market from countries which do not have anything like the stringent safety, labour and environmental standards as we do,” continued Kelly

[And this is added to] the fact there are no, or very low tariffs imposed on imported fruit products from countries such as China and the EU while these same countries impose tariffs of up to 20% on average on SPC Ardmona products into their markets.

Shooting a barb at the government, Kelly complained that while New Zealand had been successful in limiting imports to the country, Australia has not been aggressively stamping out foreign competitors who had been “dumping their products” in Australia.

The Victorian state opposition party has committed $30m for SPC Ardmona if it is elected in November.

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