Woolworths vegetable contract could save Simplot
By Jane Ryan and Cairns News
Woolworths has announced a three year deal with vegetable processor Simplot, worth $16.5 million dollars.
Simplot will now supply 100 per cent of the supermarket’s private label frozen vegetables, and will sell them at a price that Woolworths is promising will match imported varieties.
While it’s good news for Simplot, it doesn’t guarantee the future for its Devonport and Bathurst factories.
Woolworths says it will absorb the cost of the decision and that when the new line of Australian grown frozen vegetables hit the shelves in May next year they’ll cost the same as the imported varieties currently available.
The news has been welcomed by Simplot, which announced in June that both its Devonport and Bathurst factories faced closure unless profitability and productivity improved.
Simplot Australia managing director Terry O’Brien says the deal is positive news but does not assure the future of either the Bathurst or Devonport plants.
“We will be announcing next week what we will be doing in that regard,” he said.
“We’ve committed to Woolworths to supply this three year contract, so you can put down in writing that the thing’s going to be here for at least three years.”
While the news has been welcomed, the new contract does not go a long way towards improving the underlying sustainability issues facing the factories.
“We didn’t really need extra volume,” he said.
“But it helps in the fact that you know you’ve got a forward commitment to fully utilise that factory,” he said.
Woolworths Australia general manager Tjeerd Jegen says the decision to make all of their Select brand vegetables Australian was driven by demand for Australian products.
“We see it as an investment,” he said.
“It’s not a loss, this agreement will give 155 across NSW, Tasmania and Queensland more than five million kilograms more in vegetables they can grow.”
Chair of the Tasmanian Fruit Growers Association vegetable council and Simplot grower, Andrew Craigie, agrees the news is good for growers.
“In the long term, if it’s a sustainable thing, it’s what we’d always hoped was going to happen to turn our industry around.
“As soon as Simplot can guarantee some volume through it and remain running at an efficient level, that’s good news for them.
“While we have people wishing to buy an Australian product – and vegetables are all grown in Tasmania that are processed in Australia – that’s good news for us,” he said.
Woolworths currently sells 39 lines of home brand frozen vegetables, 11 of which are Australian grown.
Masters of propoganda
In light of the Queensland crumbling fruit and vegetable industries Cairns News in August investigated the freezers in a Woolworths and a Coles supermarket on the Atherton Tablelands.
Of all the recognised frozen vegetable brands such as McCain’s and Birdseye which contain 100 per cent Chinese content, not one other was branded with ‘Grown in Australia’ or ‘Product of Australia.’
Woolworths and Coles are the masters of propoganda.
The new deal will see 17 of those lines transferred to Simplot, away from China, New Zealand and Europe.
The remaining 10 lines of processed vegetables will be discontinued, because they cannot be sourced within Australia.