McCain to close Tasmanian plant next year

Posted by Daniel Palmer on 23rd November 2009

The food processing sector in Australia has received another blow with the second major plant closure in a fortnight.

McCain Foods announced that their vegetable processing plant in Smithton, Tasmania will close in November 2010, advising that the cost to make necessary upgrades to the plant was unable to be justified. The news will see 115 workers made redundant and follows the recent National Foods announcement of the closure of their Berri juice plant in Riverland.

McCain will keep the potato processing plant in Smithton open, however.

Farmers upset by closure

The news was met with derision by Tasmania’s peak farming body, the Tasmanian Farmers and Graziers Association (TFGA).

TFGA Chief Executive Chris Oldfield said news of McCain declaring it would in future source its vegetables from New Zealand was a triple whammy for Tasmanian growers, “a real slap in the face”, he argued.

“I am speechless that a company with such strong ties to Tasmania can treat its workers and its contractors so shabbily,” Mr Oldfield said. “Tasmanian vegetable growers have been warning for years that they are threatened by imports and here is clear evidence that one of our biggest threats is across the Tasman.”

“My heart goes out to the 115 workers at Smithton who will lose their jobs and to the 100 growers who supplied McCain’s with approximately $20 million of beans, peas, carrots, cauliflowers and broccoli in 2008/09. Hundreds of families will be affected.”

Cheap vegetable imports had meant the news was not a complete shock, according to AusVeg Chief Executive Richard Mulcahy.

“Growers are being squeezed to the brink of collapse by the flood of imported products,” he suggested, according to Weekly Times Now. “Australian processing companies are continuing to move towards packaging rather than growing produce. If this process continues Australian consumers will eventually be unable to buy Australian grown produce in supermarkets.”

Tasmanian food sector to overcome setback

David Llewellyn, Tasmanian Minister for Primary Industries and Water, was disheartened by the news, but said he was hopeful the Tasmanian food sector would recover from the setback.

“This is a devastating blow for the workers of McCain in Smithton and for the vegetable growers in the region,” Mr Llewellyn said. “The Government believes our vegetable growers and workers can be measured against the best in the world.”

“We will work with stakeholders to find alternatives that will maintain and grow this important Tasmanian food sector.”