Heinz hits out at news reports about its Australian operations

Posted by AFN Staff Writers on 22nd November 2011

One of the world’s biggest food processors, Heinz, has moved to deprecate news reports suggesting hostility between Heinz and Australia’s leading supermarkets who are its major customers.

Articles in both the Sydney Morning Herald and The Age this week claimed Heinz had “hit out at (supermarket) home brands” and had been “forced to rework strategy” because of the impact of growing home brand label presence in Australia’s supermarkets.

Heinz told Australian Food News today that both news reports were “incorrect”.

The new reports came after Heinz’s President, William Johnson, provided the company’s second quarter earnings report at an investor relations meeting in Pittsburg, USA, on 18 November 2011.

Heinz’s Corporate Affairs Manager Jessica Ramsden told Australian Food News today, “The earnings report given by Mr Johnson provided a succinct and accurate summary of the various issues facing the Australian business together with an overview of what was being done to address these matters.”

“The actions outlined were consistent with those which would be implemented by a responsible food business working within a relatively tough economic environment impacted by global economic instability,” Ms Ramsden said. “The report was balanced and positive and clearly showed that that the Australian business is focused on delivering better value to its customers, consumers and shareholders.”

Ms Ramsden said that the closure of factories is an “inevitable consequence of the global economic environment within which [it is] operating” and at no stage had Heinz attributed the closure or downsizing of factories to the presence of (supermarket) private label products.

In May 2011, Heinz announced it intended to close its factory in Girgarre (in New South Wales) and downsize its factories in Northgate (in Brisbane), and Wagga Wagga (in regional New South Wales), with a loss of more than 300 jobs. Heinz also has factories in Echuca and Mill Park, both in Victoria.

In August 2011, Heinz also reported a six per cent decrease in net income to US$226 for its first quarter. At the time, Heinz’s Chief Financial Officer and Executive Vice President Arthur Winkleblack described Australia as a “difficult market”. He cited house-branded competition within Australia, and the high Australian dollar impacting Australian-sourced exports.