SPC Ardmona responds to government claim about workers’ “over generous” allowances

Posted by AFN Staff Writers on 5th February 2014
SPC Ardmona responds to government claim about workers' "over generous" allowances

Troubled canned fruit and vegetable processor SPC Ardmona has refuted recent suggestions by Government politicians suggesting the Company is undeserving of government restructuring support because it is poorly managed or has been run as a “union shop.” The Company has denied that the cause of its difficulties are because of “over generous” allowances and conditions to its staff and has released figures to prove the point.

SPC Ardmona said the total cost of allowances for all its production staff for the entire year of 2013 was $116,467, which represented less than 0.1 per cent of the business’s cost of goods for the year. The Company said its employees get 20 days annual leave, not the nine weeks that were suggested.

“Our employees are aware of the critical and urgent need to transform our business and the majority have responded in practical and financial ways to lift productivity and to help secure our long term future in the Goulburn Valley,” said Peter Kelly, SPC Ardmona’s Managing Director.

“We have been assessing work practices for many months, and have made significant improvements in productivity,” Mr Kelly said.

SPC Ardmona, which is a subsidiary of food and beverage manufacturer and distributor Coca-Cola Amatil (CCA), said that since 2011 32 per cent of positions across the business had been made redundant.

In December 2013, 73 employees in the maintenance and trade function at SPC Ardmona, who had been previously advised their positions were under review, were made redundant, and the function outsourced to an external maintenance services provider.

“We are doing our best to reduce all costs across the business, however the serious problems that have beset SPCA have not been because of labour costs and certainly not from the allowances, a fact borne out by the Productivity Commission’s recent analysis,” Mr Kelly said.

Troubles come from ‘perfect storm’ of external economic factors

Mr Kelly said the business had been “severely damaged” in recent times by a “perfect storm” created by external economic factors, including the high Australian dollar, which appreciated more than 50 per cent from 2009 to 2013.

“This both enabled the flood of cheap imported product to be sold in Australia below the cost of production here, and also decimated the company’s export markets,” Mr Kelly said.

“In that period, market share of private label canned fruit grew to 58 per cent today, while SPC Ardmona canned fruit share declined to 33 per cent,” Mr Kelly said. “Our export market volumes declined by 90 per cent in the past five years,” he said.

SPC Ardmona said other major factors not of its making had been the dumping of cheap imported fruit and vegetable products into the Australian market from countries that did not have the same “stringent safety, labour and environmental standards” as Australia; and the lack of tariffs, or very low tariffs, imposed on imported fruit products from countries such as China and the EU. Mr Kelly said these same countries “impose tariffs of up to 20 per cent on average on SPC Ardmona products into their markets”.

“We rely on the farming community for our fruit and vegetables and in recent years our growers have been hit by adverse weather conditions including frosts, drought and floods,” Mr Kelly said. “Also foreign competitors have been dumping their products in Australia and Australia has not been aggressively stamping this out — as New Zealand has done,” he said.

Claims and SPC Ardmona responses

Claim: SPC Ardmona employees get “over generous” allowances.

SPC Ardmona response: The total allowances paid to SPC production staff in 2013 was $116,467, which represented less than 0.1 per cent of the business’s cost of goods for the year.

Claim: There is a generous “wet” allowance of 58 cents per hour for cleaners

SPC Ardmona response: Zero ($0.00) paid in 2013.

Claim: SPC Ardmona employees get nine weeks paid leave a year.

SPC Ardmona response: SPC Ardmona employees get 20 days annual leave.

Claim: a five-day Melbourne Cup long weekend.

SPC Ardmona response: Production staff accrue rostered days off (RDOs) during the year which SPC Ardmona requires them not to take during the peak season. Instead these RDOs are taken at the start of November, the optimum time for a plant shutdown to allow maintenance in preparation for the canning season from December to April. RDOs are not additional leave.

Claim: Sick leave is cashed out each year.

SPC Ardmona response: This was removed from the EBA in 2012.

Claim: Loading, or shift penalties are above the award.

SPC Ardmona response: SPC Ardmona’s are the same as industry standards and common to many Australian EBAs. Afternoon shift is at 20 per cent and night shift at 30 per cent.

Claim: Loadings on top of overtime.

SPC Ardmona response: Production workers do almost zero overtime.

Claim: Redundancy is in excess of the award.

SPC Ardmona response: This old condition was reduced in 2012 to a 52 week cap.

The allegations about SPC Ardmona’s workers’ being paid “over-generous allowances” came from Australian Government ministers after they decided not to provide a $25 million that the Company had requested as a one-off grant to support a fruit processing industry restructure for the Company’s fruit and vegetable processing operations in the Goulburn Valley region.