SPC Ardmona has announced a $70 million deal with supermarket giant Woolworths to supply 24,000 extra tonnes of produce, just months after the federal government refused the struggling food processor assistance.
The company on Tuesday said the agreement to supply local fruit, tomatoes and beans was recognition that “consumers really do care where their food comes from”.
“Woolworths has really embraced the fact that Aussie consumers are demanding more and more home-grown products,” SPC Managing Director Peter Kelly said in a statement.
The deal is a major boost to the company, who earlier this year had approached Canberra for funds to upgrade its plant in regional Victoria.
The Abbott government refused to provide $25 million in support to the Shepparton cannery, saying its parent company Coca-Cola Amatil should instead step in and save the food processor.
In the end the Victorian government offered the SPC Ardmona $22 million, as part of a $100 million co-investment strategy with the company.
Victorian Deputy Premier Peter Ryan said the state’s assistance to the company played a role in the Woolworths deal.
“There is no question that the fact of the government being prepared to support the package with SPC has been the determining factor in this,” he told ABC radio.
“The company could well have been lost. That $100 million investment is now literally going to bear fruit.”
The recent troubles around SPC Ardmona appear to have lifted its profile amongst consumers.
It has seen a massive surge in sales, which the company attributes in part to a grass roots Twitter campaign started by a consumer.
“We are very grateful for the unprecedented loyalty being shown for our brands from everyday Australian consumers,” Kelly said.
He said the Woolworths agreement would start to help repair the major decline in SPC Ardmona’s profitability.
“In Woolworths alone, we’ve seen a 60 per cent increase in sales of SPC fruit in the first two months of this year,” Kelly said.
“So we’re hoping this will continue and move to our other great brands like Taylor’s Soups and sauces, IXL Jam and Goulburn Valley.”
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