Australian Potato Growers at risk from Oakville Produce financial troubles

National vegetable industry body AUSVEG is concerned that Australian potato growers will be left out of pocket following Australia’s largest potato supplier entering receivership in early May.

Oakville Produce is a dominant force in the Australian potato industry, supplying about three-quarters of all the potatoes sold in Woolworths supermarkets and having almost a quarter share of the entire fresh potato market in Australia.

The company entered voluntary administration on 11 May, with some growers now reporting that they are owed hundreds of thousands of dollars.

AUSVEG wants to make sure that growers’ debts are considered a priority as creditors are repaid, and is calling for support from the Australian Competition and Consumer Commission, the Australian Securities and Investments Commission and receiver and manager Deloitte to ensure that small farmers are not disadvantaged in the repayment of creditors.

AUSVEG spokesperson Jordan Brooke-Barnett:
 

“The rationalisation of the potato industry and its supply chain is increasingly requiring Australian growers, many of whom are operating farms that have been in their family for generations, to rely on large packhouses to stay in business.”

“Unfortunately, this means that if these companies suffer financial misfortune, Australian growers can bear the brunt of the damage and are often the last in a long line of creditors to receive payment due to having less resources to pursue recourse when compared to larger companies.”

“We’d like to see more protections to ensure that our hard-working growers are fully compensated for any debts that exist in this sort of situation, and we’ve made representations to the ACCC asking for their support in ensuring that growers have their debts fully serviced.”

“We also want to see further scrutiny of potential buyers who are looking to take ownership of Oakville to ensure that they have a long-term plan for the ongoing success of the company, and that they understand the trading environment of the Australian potato industry and the dominant market forces at play.”

“We don’t want to see ongoing turmoil with continued turnover of these major players which can leave Australian growers out of pocket.”

“Australian potato growers operate on tight margins and have to deal with extreme price pressure from their buyers. The ongoing issues in the dairy industry offer the perfect example of what could happen if there isn’t an active effort to provide relief for our growers,” said Mr Brooke-Barnett.

“We want to see a fair go for farmers from all links in the supply chain, including supermarkets and packhouses.”