Australian group SPC Ardmona has won a A$70m (US$63m) five-year supply contract from Woolworths Ltd, the country’s largest retailer.
The deal will see SPC Ardmona extend its supply of Select brand fruit including tinned apricots, peaches, apples and pears “for the long term”, Woolworths said. It also includes an additional deal to supply tinned tomatoes.
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Tjeerd Jegen, Woolworths’ managing director of supermarkets and petrol, said he was pleased the deal would give the company some long term certainty.
“Woolworths is delighted to be extending this partnership with SPC to help support the company into the future. We have extended the deal on canned fruit, and added a new supply deal on tomatoes,” he said.
SPC Ardmona has been under the spotlight in recent months after an appeal for support from the Australian government was turned down.
The struggling manufacturer, owned by Coke bottler Coca-Cola Amatil, had appealed for investment, claiming its business had been damaged by illegally dumped imports. It was subsequently boosted by a A$100m joint investment package between Coca-Cola Amatil and Victoria’s state government.
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By GlobalDataThe new deal builds on Woolworths announcing last year it would bring supply of tinned fruit back to SPC Ardmona. Since the switch, sales of canned fruit are up 48%, Woolworths said.
“This is the first time we have seen growth in the canned fruit category for some time,” said Jegen. “This brings certainty to SPC and the farmers who supply our select brand so they can now invest in their businesses with the confidence of knowing Woolworths will stand beside them for the long-term.
SPC managing director Peter Kelly said the long-term partnership was “very welcome news for industry, Australian growers and consumers”, and important for the “certainty” it gives growers to start rebuilding their capacity.
“Woolworths has really embraced the fact that Aussie consumers are demanding more and more home-grown products,” Kelly said.
“SPC is so grateful for the unprecedented loyalty being shown for our brands from everyday Australians who really do care where their food comes from.”
