Anti-dumping move may prove fruitful for SPC

John Durie
July 11, 2013
The Australian

SPC Ardmona is rolling out its Australian-made brand as part a multi-pronged campaign to boost sales of locally grown produce in the face of a massive assault from imported fruit.

The second prong is a plea for government assistance in whatever form it may be available, from trade measures to straight handouts.

The buy-local campaign has already started on television and in print, and will feature new packaging with the “Made in Australia” focus front and centre, rather than in the fine print on the back of the can.

The company, a division of Coca-Cola Amatil, was yesterday also trumpeting the fact the newly created Anti-Dumping Commission had formally initiated an inquiry into allegations that tomatoes from Italy and peaches from South Africa were being dumped in Australia at the cost of jobs at SPC’s Shepparton plant and elsewhere.

Of the 11 present dumping investigations before the commission, three are from SPC, another complains about pineapples from Thailand and seven relating to steel products have been lodged by BlueScope and OneSteel. The steel, chemicals and food sectors rate among the big complainants in part because they are well aware of the intimidatory nature of dumping complaints, which tend to freeze imports overnight, whether the complaints can be proven or not.

To establish a dumping complaint, the local industry must prove the imported product is landing at below normal cost in the country of origin and is causing injury to the local industry.

The latter is not hard to show, given the carnage suffered by Australian fruit growers with the high dollar. However, establishing a direct link between the dumped product and the injury is the tough part.

Last month the federal government added a new weapon against imports by referring a so-called “safeguards” request to the Productivity Commission at the request of SPC Ardmona.

The inquiry will decide whether the “unexpected and unforeseen” increases in imports call for a special tariff duty to protect local producers.

The “unexpected and unforeseen” bits are the tough part of the equation, given the fruit processing sector and the steel industry had permanent offices in the old dumping branch at the Customs department in Canberra.

Paul Barratt, a former senior trade negotiator, will head the inquiry, which is a rare event in Australia.

The local food processing industry is pulling every lever it can, and like all good protectionists is pointing to assistance measures applied elsewhere, including New Zealand, in the mistaken belief that subsidies paid in one country justify the demand for more to be paid elsewhere.

Home Affairs Minister Jason Clare yesterday officially opened the Anti-Dumping Commission and appointed Dale Seymour as its first boss.

Seymour is a highly regarded former Victorian government bureaucrat who, among other jobs, served as deputy chief of the Primary Industries Department, so he knows a bit about the plight of the farmers around Shepparton.

The SPC business has been a financial disaster for Coca-Cola’s Terry Davis who ranks as one of the most innovative and proud local manufacturers.

His mistake with SPC was to think he could leverage the Coke distribution network and add anything to it, from baked beans to sliced peaches. Trouble is the retailers have grown bigger, so distribution muscle is not prized as highly as it once was.

The SPC business took a $108 million write-off in 2011 and another $100m last year.

But the Buy Australian program shows the folk at SPC are still out there trying. The campaign is a grassroots effort and is having some impact at Shepparton. But it remains to be seen whether it will prompt a switch from brands such as Heinz, which has bailed out of Australia.

Simplot’s Terry O’Brien is sceptical, saying remaining a local supplier hasn’t helped him at the supermarket, but you never know.

Ian McLeod at Coles will no doubt remind Davis (if he needs any reminding) that he must make sure his produce actually is locally made, lest he be hit with the same ACCC fines that McLeod copped for promoting fruit as Australian-grown when it was imported.