Australian vegetable industry welcomes reports Simplot factories to continue operating for at least 3 years

Today’s reports that Simplot’s two vegetable processing plants at Bathurst and Devonport will remain open for at least another three years has been welcomed by peak industry body, AUSVEG.

“This morning’s news that Simplot will keep its Bathurst and Devonport plants operational for at least three years is welcome news for the Australian vegetable industry, and growers will be relieved to hear that quotas will not be slashed in New South Wales or Tasmania,” said AUSVEG spokesperson, Hugh Gurney.

AUSVEG is the leading horticultural body representing Australia’s 9,000 vegetable and potato growers.

Simplot announced in June that it was considering closing both plants due to ‘unsatisfactory financial returns’, with the Bathurst plant flagged for closure as early as December this year.

“As one of Australia’s last remaining vegetable processors, the survival of Simplot in the long-term has enormous implications for the nation’s food security, and it is hoped that over the next three years these plants can demonstrate their viability,” said Mr Gurney.

While the volume of vegetables processed at Bathurst will decrease, the surplus will be transported to the Devonport plant for processing.

“This will come as welcome news for the sweet corn producers who supply Simplot in Bathurst, as it appears they should be able to continue their operations without cuts to their quotas.” “The flow-on benefits of these businesses remaining in these communities will be seen by service providers who provide for the regions’ vegetable growers,” said Mr Gurney.

Last week’s announcement of a $16.5 million deal by Woolworths will see the supermarket source only Australian grown produce from Simplot’s two factories for its Select frozen range from May next year. Coles has also committed to source all of its Smart Buy frozen vegetable and potato produce from Australian growers by early 2014.

“The major retailers’ commitment to sourcing their home brand lines from Simplot is an encouraging initiative for its New South Wales and Tasmanian growers,” said Mr Gurney.

A number of Australian vegetable processing operations have closed down in the past two years, including Rosella, Heinz and Windsor Farms, with pressure from cheap imports and high costs of labour cited as major challenges to these operations.

“Cheap imports of frozen and processed vegetable produce are at record levels, and this is putting increased pressure on Australian processors who are struggling to compete.”

“This morning’s reports that Simplot will continue processing for at least three years is positive news for the wider vegetable industry, as well as consumers, who will continue to be able to choose high quality Australian vegetable produce,” said Mr Gurney.

Source: AUSVEG