The Australian newspaper - Tomato gower demise
No Juice - Australias largest tomato growers closes.
SUE NEALES, RURAL REPORTER From: The Australian
AUSTRALIAS biggest tomato grower has gone broke and is blaming price manipulation by the two major supermarkets for playing a key role in his demise.
The appointment of administrators to Queensland-based SP Exports, which grows 30 per cent of all fresh tomatoes eaten in Australia, has sent shivers through the fruit and vegetable business.
Industry representatives are asking whether any local horticultural growers can survive the onslaught of savage price discounting if leading producers such as the Philip family cannot.
SP Exports managing director Andrew Philip has told fellow growers much of his family businesss misfortune is due to continued low prices for tomatoes after a seasonal glut and high fixed price guarantees by Woolworths that killed demand for his truss tomatoes last year.
The company, based at Childers in southern Queensland, suffered $5 million of flood crop damage in late 2010, lost $1m of cherry tomatoes to chemical spray drift last March and another $7m of tomato seedlings at Bowen last July when a nursery irrigation system was laced with deadly herbicide.
The slashing of vegetable prices by Coles last month was the last straw for the previously successful tomato growing and marketing business. The company has gone into voluntary administration, with debts of at least $31m, and owing more than $500,000 in wages and other entitlements.
About 60 staff employed by SP Exports were laid off at Childers last Friday. Hundreds more contract tomato pickers are out of a job, with many, such as visiting Estonian Aivar Nigumann, owed wages by contractors and afraid they may not be paid.
Administrators Korda Mentha warned yesterday that the corporate assets available to pay unsecured creditors and workers were minimal, with the company leasing rather than owning land from Queensland to Victoria from other farmers to grow and supply its cherry, truss and field tomatoes all year round to the two big supermarket chains.
John Brent, chairman of peak grower group Ausveg, warned yesterday that if such a smart and innovative grower as SP Exports and Mr Philip could not survive, it would not be long before other vegetable farmers went bust.
The supermarkets cant keep on screwing down the major growers and expect to have a local fresh fruit and vegetable industry remain,Mr Brent said last night.