The Australian government has turned down a request to financially help fruit and veg supplier SPC Ardmona.
Canberra has refused to spend A$25m (US$21.8m) on a grant for the business, owned by Coke bottler Coca-Cola Amatil.
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Prime Minister Tony Abbott said Coca-Cola Amatil should be able to fund any restructuring needed at the business, which has seen competition from imports hit sales.
“[Coca-Cola Amatil] is a business which well and truly has the resources to ensure that SPC Ardmona is in a strong position to restructure,” Abbott told reporters, according to Bloomberg.
Coca-Cola Amatil, which had pledged to invest A$90m in the business if it received the government grant, said Canberra’s refusal to provide the assistance meant a further A$25m from Victoria’s state government would no longer be available.
“The Government decision is disappointing in light of the fact that SPC Ardmona had presented to both the Federal and Victorian governments a solid business case for a one-off co-investment of A$25m each with CCA committing to a significant and much greater investment of more than A$90m,” Coca-Cola Amatil MD Terry Davis said.
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By GlobalDataDavis said the cash would have been used to invest in technology at its site in Shepparton for NPD and to improve efficiency.
Next month, Coca-Cola Amatil will present what it called a “material review” of SPC Ardmona, including a write-down of its brands and goodwill.
