Covering the Goulburn and Murray valleys

Fruit price rise speculation

Goulburn Valley growers who supply SPC Ardmona may get a better price for their fruit if conditions continue to improve for the processor.

GEOFF ADAMS March 19, 2014 3:00am

Goulburn Valley growers who supply SPC Ardmona may get a better price for their fruit if conditions continue to improve for the processor.

The company has announced a $70million deal with retailer Woolworths over five years and, buoyed by increasing domestic consumer sales, the company is now looking for more fruit.

It was only last April when the company slashed a large number of growers from its supplier base.

The company has moved forward its annual meeting with growers to discuss crop forecasts to the end of March, and managing director Peter Kelly said he wanted to be able to offer improved prices.

However he said it was too early to offer figures, as the company would be monitoring sales right through the month.

Asked about whether he would be inviting back some growers who had been delisted, he said he would be talking to existing suppliers.

‘‘My preference is to build volume with growers that we have and give them a price increase, rather than be negotiating with a bigger group.’’

He said he wanted to give incentives for growers to stay in business but not over-reach the company.

Mr Kelly said he did not regret the decision to cut the suppliers last year, because it had to be done for the company to survive.

Woolworths wil require an extra 24000 tonnes of fruit, tomatoes and navy beans, with the fruit component requiring the equivalent of 86000 fruit trees.

From 2015, SPC will begin supplying all fruit for Woolworths Select fruit snacks and jelly snacks, and for the next five years will continue to supply 100 per cent of fruit for the Woolworths Select multi-serve fruit range.

SPC Ardmona has been focusing on the snack food market, believing the convenience foods have the biggest potential for growth.

Mr Kelly said one of the best outcomes was the future opportunity to sit down with Woolworths and do some long-term planning on what the processor could provide which consumers wanted.

‘‘This is a real breakthrough for us.’’

He said some people scoffed at the processor’s goal to lift sales and production last year.

‘‘We talked to our growers all the time. They knew what we were trying to achieve and we did what we had to do at the time.’’

A tomato supplier to SPC Ardmona, Kagome at Echuca, has welcomed the good news of the new contract.

Chief executive John Brady said he hoped they would be able to provide the tomatoes required by SPC Ardmona, and the extra volume — while not affecting price — would provide a buffer against overheads.

For more on the impact on the tomato industry, turn to page 3.

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