SPC Ardmona jobs in doubt after Federal Government denies $25 million assistance request

Updated

The Federal Government has rejected a $25 million assistance request from SPC Ardmona, raising the prospect of thousands of job losses in the regional Victorian city of Shepparton.

The fruit processing company had sought help from the Victorian and Federal governments to restructure its operations, arguing the high Australian dollar and cheap imports had made it hard to compete.

But Prime Minister Tony Abbott says SPC Ardmona's parent company, Coca Cola Amatil, has the resources to carry out that restructure without the need for government funding.

"The decision that came from the Cabinet today does set an important marker," Mr Abbott told reporters in Canberra yesterday afternoon.

"This is a government which will make sure that the restructuring that some Australian businesses need, that some Australian sectors need, is led by business, as it should be."

Industry Minister Ian Macfarlane has described the decision as a "defining point" for the future of government assistance.

"I think it is a clear delineation of where this Government believes we need to go with industry policy," Mr Macfarlane said.

Mr Abbott has urged the company to renegotiate its workplace agreement, saying some aspects are "extremely generous" and need to be changed.

"The existing agreement contains conditions and provisions which are well in excess of the award," Mr Abbott said, pointing to the redundancy and sick leave provisions.

"This does need to be very extensively renegotiated if this restructure is to be completed.

"As SPC and Coca-Cola go about this renegotiation, they'll certainly have the support of government in doing so."

'Dark day for Australian jobs'

The Government's decision has drawn immediate fire from Labor, which has accused the Coalition of sending thousands of Australian jobs overseas.

"Today is another dark day for Australian jobs at the hands of the Abbott Government," Acting Opposition Leader Tanya Plibersek said.

"By failing to support SPC Ardmona's request for co-investment, the Government has effectively signed the death warrant on Australia's last fresh fruit cannery, ensuring the destruction of thousands of jobs."

The company says it is "extremely disappointed" by today's decision, adding that a potential $25 million grant from the Victorian Government will no longer be forthcoming because it was contingent on Commonwealth support.

SPC Ardmona managing director Peter Kelly says there will now be a review of the cannery's business plan with Coca-Cola Amatil.

"To build a sustainable and profitable business in Australia you need to innovate; to innovate you need to invest," Mr Kelly said.

"Without investment, some of Australia's best-loved packaged fruit and vegetables brands may disappear and consumers won't have a choice to buy clean, green Australian packaged grown fruit at retailers."

Mayor says workers worried about future

Liberal MP Sharman Stone, whose electorate takes in the cannery, has previously warned of significant economic consequences if the financial assistance was rejected.

But Mr Abbott says he is confident Shepparton will continue to be a dynamic regional centre with a strong agricultural base.

About 700 factory positions face being slashed outright, while thousands of jobs could be affected in flow-on industries.

Shepparton Mayor Jenny Houlihan says she is extremely disappointed by the decision and that it will be felt across her community.

"Thousands of workers in our region will be very worried about their future, because at the moment we do not know what SPC Ardmona will do now," she said.

"This is a major part of our community and its economic health.

"We've had a 2 per cent above-average unemployment rate for years, and that's because we have not had the federal and state government money poured into here as it has been in a lot of other centres.

"There will be a time when people transition, there will be a time when we can grow other businesses, but in the meantime that $25 million that the Government has refused to hand out today will be eaten up in unemployment benefits."

Fruitgrowers Victoria deputy chairman Gary Godwill says the decision will leave many local fruit growers unemployed with few options left to explore.

"The future for us is very much still uncertain, it doesn't look good. I just feel very, very gutted by the decision," Mr Godwill said.

"For us, we've pulled out trees already, I think we're going to continue to pull out trees. We're just going to have to gradually phase out."

He says a mid-year closure of the factory is a very grim prospect.

"Not just for growers, not just for people employed by SPC, but a very grim prospect for the whole region."

Topics: government-and-politics, federal-government, parliament, federal-parliament, business-economics-and-finance, manufacturing, company-news, food-and-beverage, industry, food-processing, rural, australia, vic, shepparton-3630

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