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SPC review of Australian manufacturing

May 5, 2011

Time:               9.00am

Date:               Thursday 5 May 2011
Journalist:        Joseph Thomsen
Topic:              SPC review of Australian manufacturing
JOSEPH THOMSEN: (inaudible)
Well of course a review is commonplace, all good businesses do reviews. The trouble with this announcement is what’s not said I suppose or is this just code for; are we going to shift ourselves to a country with cheaper labour, less vigorous environmental regulation and no carbon tax. Is that what they’re going to do and they’re just softening us up.
Of course Coca-Cola Amatil - 30% of that company is owned by Coca-Cola - the “Mr Big” and they make enormous profits throughout the world and they’ve got not just the non-alcoholic beverages, but the water market and snack foods and so on. They’re not short of a bob. Coca-Cola itself and Coca Cola Amatil is doing very well in virtually all of its markets.
I’m concerned that it’s been over the last few years that this local SPC Ardmona business, in our part of the world, that the growers have been told that we'll take less apricots, take less pears this year and so on, because they're importing, some say, 50% of their ingredients now.
Now if that is the case Joseph, with the high Australian dollar as it is they are getting those ingredients, the baked beans, the fruit juice concentrate, the tomato paste and so on. They are actually getting them cheaper than usual when they import them so there's a lot funny business going on. I want to see them do a genuine review that uses marvellous management expertise, because what could be better than a brand called Goulburn Valley, actually with the product actually coming from our great Goulburn Valley, the world's best place to grow food.
The union representative that we spoke to earlier on this morning said that in his talks with I think the HR person at Coca-Cola Amatil earlier today. I might add that the union representative hadn't been consulted and in fact said that he had woken up to the news of a media release going out yesterday. He's been told, again this is corporate jargon, no decision has been made yet it is simply under review. How seriously do we take this review though?


I think we have to take it very seriously, and the carbon tax is a very serious issue for manufacturing in Australia because as you know anything that requires energy to cook, to boil, to manufacture tin cans, to put products in a truck and drive it up the highway uses energy with an enormous cost impost on all of our manufacturers and that they can't pass on easily so the carbon tax is a huge issue as was stated in their announcement yesterday.
But we've also got problems in Australia; we don't pay third world wages. We have a situation where we have had a long drought, then we had the floods and our own local supply of fruit and vegetables was made difficult.
Our other multinational food producers in our area Joseph, who I visited in the electorate just last week, what they are doing is they are innovating, they're up-skilling their workers, they’re looking at different packaging styles and they’re challenging the big duopoly of Coles and Woolworths who as you know are part of our problem too because they are insisting on the home brands that say SPC Ardmona products should go into home brands to compete against their own fabulous brand itself.
There's a whole range of issues there. So this review is deadly serious and important. But we have to say on so many fronts wakeup Australian Government. Look what's happening. On the other hand you've got to say to Coca-Cola Amatil you are the very big end of town and 30% owned by Coca-Cola for heaven's sake. Don't exit out of a beautiful food producing country like Australia and go to a third world country where even the quality of your water is an issue.


Well this is what happens as a lot of text message correspondents have already said this morning - if you sell out to a giant company you lose local decision-making at a local level so it makes you wonder what can be done. Two things I suppose finally to you Sharman Stone. What are you saying that the Federal Government should do if anything in all of this and what are you going to be doing as a result of this review announcement?


Okay well first of all the carbon tax. As you know Joseph, the Coalition is saying don't be stupid why lose all of our jobs, our manufacturing in Australia when the new carbon tax doesn't even save the planet as this government is claiming. Let me also say to you though Joseph in terms of multinational, big companies most of our food manufacturing now in the Goulburn Valley or north-east Victoria are in the hands of multinationals Heinz, Simplot, Unilever, Campbell’s, Fonterra and so on. They’re not all performing or behaving like Coca-Cola Amatil is right now. So the fact that they are multinationals doesn't mean they are necessarily not loyal to their suppliers.


The problem is I suppose that Coca-Cola Amatil is not really doing anything wrong in conducting a review and if they chose to move everything offshore again unfortunately in corporate sense they are not doing anything wrong it is just that we don't want them to.


Exactly, but they are doing something wrong if you look at product safety and value because if you are going to a cheaper area of food production, one with less environmental regulation, one where it doesn't matter too much whether you've got your labour being safe and paid appropriately - then heaven help us!
I say that something like Coca-Cola Amatil bought a magnificent set of brands. It should be now innovating and getting away from old-fashioned cans using more of the plastics and squeeze packs and other much more trendy and desired forms of packaging. It still does mostly cans for example and it doesn't seem to have moved with the times and our local growers and our local workers are going to pay that penalty.


Are you Sharman Stone are you going to presumably speak to Federal government representatives.




Are you going to request a meeting with Coca-Cola Amatil?


Absolutely, we have this statement now; it's on their website at the moment. We've got this statement saying there will be a review by August. We know that we've got numbers of staff being told that the canning part of the business is going to be on a go slow or shut down for a few months we understand. So something serious is happening. I just want to make very sure that they understand the value of remaining in the Goulburn Valley when it comes to having the best possible ingredients, and the best possible workforce, and all the logistics that go with that because they will be the poorer if they can't have their factory in the future in Shepparton.


Sharman Stone thanks for your time this morning let's hope that it doesn't come to this decision.


Absolutely Joseph.



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