Tony Abbott and Joe Hockey were right.
Not something you read every day, true, but they made a good call back in 2o14. Except, it’s now been forgotten in the perpetual present that is Australians politics and its coverage.
Back in 2014 Coca-Cola Amatil, owner of SPC Ardmona, demanded $25 million from the federal government to keep food processor SPC Ardmona, and its Shepparton plant, going. Despite local Liberal MP Sharman Stone kicking up an almighty stink about it, Abbott and Hockey said no. A few days later the Victorian government under Dennis Napthine (remember him?) caved in and handed them $22 million.
Coca-Cola Amatil bought the company for $700 million in 2005 by Coca Cola Amatil when it was run by CEO Terry Davis. In February 2014, it wrote down the value of SPC by $404 million despite the generosity of Victorian taxpayers.
And this week, it says it is going to run a “strategic review” of whether to sell, float or merge SPC. It knows that it will only get a fraction of that $700 million back and nothing fo the hundreds of millions of dollars in losses it has incurred since then.
According to Coca Cola Amatil, SPC lost $1.7 million in the six months to June on a $4 million fall in sales due to “the proactive exit of a number of private label lines as well as continued competitive pressure”. The company said its Ardmona brand tomatoes and SPC baked beans and spaghetti had increased market share but that total sales of those categories had fallen during the half. “We continued to experience pressure in fruit and spreads categories,” the company said.
Dennis Napthine’s $22 million was a complete waste. But taxpayers did help SPC Ardmona in another way, as consumers. In 2014 and 2016 the Abbott and Turnbull Governments announced anti-dumping penalties on imports of Italian tomatoes. Those cheap tomatoes — how dare importers offer Australians cheap quality food! — were making life tough for SPC’s sales of its canned tomatoes and the shadowy Anti Dumping Commission determined that the Italians were receiving subsidies from the EU. Then Industry Minister Christopher Pyne welcomed the 2016 decision: “This ruling will ensure that Australia’s only canned tomato producer, SPC Ardmona, can now compete equally in Australian stores and supermarkets.”
Yeah, not so much.
It turns out literal protectionism in the form of unaccountable anti-dumping rulings, and indirect protectionism via taxpayer handouts, don’t work. Abbott and Hockey were right. Too bad Victorian taxpayers had to pay the price for their Premier’s stupidity, and Aussie pasta cooks too.
I suppose the free market purists will be satisfied when Australia is completely reduced to the core items it does better than anyone else…like ripping shit out of the ground and flogging it to the Chinese.
Capitalist equilibrium will be reached, all labour will be from the developing world, all technology and manufactured products from the USA and China.
Sounds pretty ratshit to me.
“Dennis Napthine’s $22 million was a complete waste.”
Not that I like Napthine or anything- the opposite actually- but has the writer done ANY analysis at all of what wages, tax and flow-on benefits have come from SPC Ardmona remaining operational for the past 4 years?
“Complete waste” might not be true.
“Complete waste” is rarely if ever true, Arky. Employment generates employment. Only neoliberals believe unemployment is preferable to the employment “protectionism” generates. Perhaps they think unemployment is the just dessert of anyone too stupid to choose the right sectors of the economy to work in?
Agreed. This “waste” nonsense is just neoliberal macro-economic bullshit. Governments are not businesses and should not be required to show “profit”. They are required to show “benefit” to the people at large.
At my local Woolies the imported Italian tomatoes are normally $1.40 but it seems at least half the time they are “on special” at $1.00 or even $.80. Hard to compete with that.
Especially when the Italian ones piss all over SPC for taste, Robert.
I refuse to buy Italian tomatoes. Google “migrant african labour and italian tomatoes” and you’ll see why. Here is one of the many articles that you’ll find:
https://edition.cnn.com/2017/12/07/europe/italy-migrant-camp-exploitation/index.html
Or you can keep buying them and marvel at how they can produce them so cheaply. I prefer to buy SPC, Ardmona and Edgell. I support employment in Australia and I am more confident about what chemicals go into the cans.
Oh yes! We’re much more civilized than the Italians. We treat farm workers -good Australians all- very well indeed. Oops! No they’re not and no we don’t:
https://www.smh.com.au/business/workplace/key-farm-scheme-badly-exploited-migrant-workers-paid-8-an-hour-20180518-p4zg53.html
https://www.theguardian.com/australia-news/2018/may/21/death-in-the-sun-australias-88-day-law-leaves-backpackers-exploited-and-exposed
Farming exploits cheap foreign labour all around the world. It’s the nature of the beast.
Scale, wages, conditions, and criminal gangs are the key points of difference between the mistreatment of farm labour here in Australia compared to the southern Mediterranean region. Yes – we are not perfect, but farm workers here get it better than African slave labourers in Italy, and that’s one reason the costs of production here are higher…
International tariffs on goods that don’t meet basic living wages in the country of origin would be a start.
If you have a conscience, then don’t buy Italian tomatoes…
I guess you’re not thinking of moving to Shepparton any time soon Bernard.
Still, there’ll probably be some cheap real estate going, if those 220 full-time workers end up out of a job.
The anti-protectionist argument that Keane has often put forward implies that food and clothing can never be too cheap: however the huge quantities of both wasted (bins of strawberries rotting because too small for the supermarkets this week, pineapples a few months ago; overflowing charity bins in every supermarket carpark in the country), this is clearly not the case. Furthermore, when you factor in the environmental and social costs of the production and dissemination of such goods it is clear that it is just as possible for the necessities of life to be too cheap as well as too expensive.