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Hello, welcome to Landline.
I'm Pip Courtney. SPC Ardmona is an iconic
Australian brand. But in early 2014, the nation's largest fruit
and vegetable processor was on the brink of collapse, as its traditional markets
were being swamped by a deluge of
cheap, imported products. Today, for the first time, Landline's Tim Lee reveals
the full story of the company's
near-death experience and one of the largest community
and corporate fight-backs in Australian history to save it.

TIM LEE: Blossom-filled trees
in the Goulburn Valley mark the arrival of spring, and the promise of
a bumper fruit season. This time two years ago, this landscape was starkly different.

WOMAN: So, once you've lost those magnificent
permanent plantings, you're gone. You're going to rely on those
cheap, dumped imports forever. So, I think the heart of Australia
was broken...

..when it, uh...happened.

(CROW CAWS) STONE: Literally. There was dust, there were trees
being pushed over, there were fires
burning beautiful fruit trees. You can't keep doing that and have
a fruit manufacturing industry. You've lost your supply. So, yes, it was dire.
It was horrific. The region's fruit
and vegetable industry was buckling under
a weight of forces. The Goulburn Valley, often called
Victoria's 'fruit bowl', was fast becoming a basket case. STONE: The flood of cheap imports - often nasty as well as
cheap imports. The high dollar. Coles/Woolworths, with their huge -
over 80% - monopoly on retail, so they could squeeze the prices
for the suppliers just down to...
an unconscionable level. So...and, of course,
the utilities were going up - the price of water,
electricity, gas - everything was going up. So, uh, you had this perfect storm. In January 2014, the industry
reached crisis point. Fruit growers such as Peter Hall
pleaded for calm, and Federal Government help. HALL: At the time, the high dollar, the predatory practices
of overseas suppliers, were putting us in
this crunch position. We knew it was never going to be,
um, the pattern forever. So, what we were effectively saying, and to the Federal Government,
and to every other State Government, that we were looking
to get assistance from, we were saying, "Look, this is
such a short-term issue. "If you don't help us now,
this thing'll tip over."

Australia's manufacturing industries
were shutting up shop. General Motors Holden and Ford
had announced they would stop making cars here. Food manufacturer Heinz
had already gone. It seemed inevitable that SPC, the nation's largest food processor
and packaging company, would be next.

Though the former Federal Labor
Government had promised $25 million to assist SPC Ardmona in installing
innovative, more efficient equipment at its giant Shepparton factory, the Liberal Government,
under Prime Minister Tony Abbott, overturned that promise. Mr Abbott said
his government's policy was not to financially assist
large companies such as SPC, no matter the circumstances. HALL: In their defence, I suppose, although I'm advocating
they should have, they always consistently said they weren't going to be
involved in corporate handouts. There are extremely generous
redundancy provisions... Sorry. Um... I know the Prime Minister said this
was about salaries and conditions. No, it's not. There were, uh, families who just were
in a state of total shock, not knowing..."What do we do now? "We can't supply SPC." It is the only
fruit manufacturer left. There are no other options
for our fruit. Sharman Stone, the local
federal member, was so incensed, she took the extraordinary step of accusing her Liberal Party
prime minister of lying about union conditions
at SPC. Well, he's misrepresenting the facts and, so, we got to the 'liar' word'. Was that just the utter frustration
of the situation? Total...
That's a big call. Yes, total frustration because
between the two Cabinet meetings in December and January, where this decision was to be taken
about the investment grant for SPC, I'd made sure
that all the information about the various elements
of distress for SPC were in front of Cabinet, particularly in front of
Tony Abbott, you know, about
the anti-dumping problems, about the price of the utilities, about the dollar price, about Coles/Woolworths' duopoly, how it screwed down the prices
of suppliers. I made sure all of that was there
to help inform a decision. (APPLAUSE) Sharman Stone retired from
federal politics last election, after 20 years
as the Member for Murray. This is the first time
she's spoken in depth about the issue that put her at odds with her party and prime minister. It wasn't a very comfortable
position to be in at all, but it had to be said
and we had to take up the fight and the fight had to be won, because it was
a do-or-die situation.

Fruit grower Gary Godwill, who was prominent in the campaign
to save SPC, believes the company
was set to close. GODWILL: I believe the decision
had been made that it was all over.

However, at the eleventh hour, the Victorian State Government,
under Premier Denis Napthine, saved the day. It pledged $22 million
in concessional loans, if SPC's parent company,
Coca-Cola Amatil, invested $78 million of its own. And it wasn't until the announcement
of the $22 million from the State Government that Coke changed its mind. But what I think really made
a change in the mind of the, uh, management
of Coca-Cola Amatil was the enormous public support. That is what galvanised the whole
industry, brought it together. And, uh, I'm very, very grateful
for consumers' sentiment and the belief that they didn't
want to lose another icon.

(CHEERING) And so began one of the greatest
corporate and community fight-backs in Australian history - the resurrection of
the iconic 90-year-old company. HALL: And because
a lot of people grew up with eating SPC or Ardmona products
as kids, there was a nostalgic
connection there and I think people were rudely
shocked into the reality that perhaps these
great iconic companies could not compete anymore. And I think that was both a shock and a bit of a challenge
to the community. I think it's certainly one of
the bigger corporate fight-backs. You know, we're not there yet. We've still got some
fairly significant headwinds and we could certainly benefit
from more support from our big retail supermarkets
in this country. But, yeah, we have fought back,
which is great. We're two years into
our three-year turnaround plan. We've invested about two-thirds of the $100 million transformation
investment program, and we're making
really, really good progress.

And this is part of that
$100 million re-investment. Tomatoes are a crucial part
of the business and this is what $30 million can buy.

A high-tech, high-speed
production line.

MAN: So, it's new technology. We actually bought the technology
from Italy. You know, it was a year
in the making. And if you think about, you know, the speed that the line goes -
so it's 60 tonne an hour - so it's significantly...
double the speed of the old line. And, also, it produces a superior quality fruit. We did some lab tests recently and you can actually see,
you know, the whole pieces, the chopped fruit, diced fruit,
looks magnificent. The hot climate of northern Victoria is well-suited to tomato production. These are a variety of Roma, only they're a little bigger and they've got a tougher skin, which makes them ideal
for processing.

On a floodplain near Boort, about 200 kilometres
west of Shepparton, Louis Chirnside
supplies SPC with tomatoes. With the development of varieties, I mean, they developed one
with good taste and good field-holding capacity, and they manage the machine harvests
very well.

Like other growers, he was thrilled
to see the rescue package put SPC back on its feet. CHIRNSIDE: SPC were under serious
threat there a few years ago. It appears that they're heading
in the right direction. Everything that we see looks good. You've got a new plant and, so,
you've got the longevity of that. That's great for the district, but I don't think anyone
should be complacent about it. For growers, that means striving
to get better yields and quality, and finding ways to lower
the cost of production. CHIRNSIDE: Tomatoes are
a global commodity. I mean, they're second
only to potatoes and, uh, grown in
a lot of countries. We've got a great climate,
great soils. The quality of what we're producing,
and the flavours, especially with
the processed product, is, um, exceptional. So, you know, if you...if you've
been eating imported products, go and give SPC and Ardmona
another try.

Closer to Shepparton, his brother-in-law, John Kennedy, is also again growing tomatoes. KENNEDY: We grow all these tomatoes
with drip irrigation. You know, it's efficient use
of water. And we're getting good yields
on drip irrigation and, uh, this crop here is yielding
about 125 tonne a hectare. Like others,
he's enormously relieved that SPC decided not to close. KENNEDY: Oh, it's a fantastic thing
for the district and tomato-growers, and it employs so many people, from the paddock here,
through to the factory, and then into
their marketing side too. They seem to...they're doing
a really good job at SPC. Now John Kennedy and other growers
feature on the label - part of an advertising campaign that has been hugely successful. WOMAN: Advance Australia fair. WEINE: So, if you think about
our My Family Can campaign, where we feature the growers,
our farmers, uh, on our tins, it's been incredibly successful. Uh, so we know that that campaign
reached about 4 million households, which is a phenomenal result. It also won a Bronze Lion
at the Cannes Advertising Festival, which is the peak
advertising awards, in France, which is quite incredible. And our tomato sales, I'm pleased
to report, are up 6%, year on year, which is fantastic, really good.

GODWILL: I'm fourth-generation
in this country... MAN: Consumers can really relate to a label with a genuine Australian
family grower on the label, and then that's, you know,
someone who's... ..really cares about their product. And then it comes to the company
that locally employ, that really care about
the whole journey of that product, from that grower, right through to
the customer shelves and the pantry. The public response
to the plight of SPC was simply staggering. It garnered an avalanche of support
via social media - on Facebook and community websites. STONE: There were 22 million hits
on that website, over a, you know, month or so. It was the most phenomenal,
um, response - unbelievable - I think because the Australian
public could see they could actually
be powerful in this, they could influence the outcome. They could go and spend $1.20
on a can of Australian tomatoes, or $1 on a can of
Australian peaches, and save a set of orchards, some great Australian farmers
and a manufacturing industry. They could really do that. The big retailers also responded, suddenly stocking and promoting
SPC Ardmona products. HALL: And to the community's credit,
they rose to that challenge and there was an awful lot of
public media about it that was generated by support
from the community - people saying they'd buy
the products. And I think that was, you know,
one of the catalysts for SPC reviving its fortunes. SPC was fighting another critical
and long-running battle - trying to stop the dumping of cheap, often highly subsidised, imported processed tomatoes
and other fruit into Australia. STONE: We were just the target
of every shonk - in the South African peach market or China market, with their peaches. Italy was pouring its
canned tomatoes into Australia, I mean, we know,
picked with virtual slave labour, the poor refugees
out of the African continent, grown on soils very suspect
in terms of their quality, contamination issues were rife. But our anti-dumping authority
at the time had not a single bone
of national interest in its body. Is that ready?
That's ready. Sharman Stone might have missed out on Federal Government assistance
for SPC, but she did win
one crucial concession from Prime Minister Tony Abbott - a more stringent anti-dumping regime
in Australia. Now there are tighter controls
and less cheap imports. When we think about tomatoes the major competitor for us
is the Italian imported tomato, which is more than 70%
of the market. And through
the Anti-Dumping Commission, we've proven that the Italians are
heavily subsidising their product. About one-third of the price they
get back by way of farm subsidies. And that distorts the price. And, so, we know that there's
a lot of Italian product that's dumped in our market
illegally, below the cost of production, and that really has an impact
on our business. It was a very hard, bitter fight
for companies like SPC to bring anti-dumping legislation
to bear. It cost a lot of money, a lot
of time, a lot of frustration.

It shouldn't be like that. Our own government should support us
in doing these things because we're really trying
to keep industry here, keep primary industry viable and keep our consumers happy with a very good, clean, green,
home-grown product.

REPORTER: These photographs
were taken by an Australian
industry representative inside a cannery in a country
which exports to Australia. Public scrutiny
also exposed a sinister side to some cheap imported products. I guess they've had a light
shone on their industry. So, the ethical trading initiative
in the UK highlighted the fact
that migrant slave labour in Italy is being used to pick tomatoes. And they're getting paid
about 40% below the minimum award, and as little as $3 an hour
for a 10-to-12-hour day, which is, you know, unbelievable. CHIRNSIDE: There has been organised
crime involved in that. To me that's a bigger story
than even the anti-dumping. I find that pretty abhorrent, the whole thing with
the migrant labour exploitation. Competing with that
is very difficult, policing that is very difficult. Certainly we know in Australia, we're ticking all the boxes from fair wages, environment,
controls and safety so that we know that our product is
what the Australian consumers need.

And the Shepparton region
needs SPC Ardmona. The revamped factory stretches
for almost one kilometre, a mass of stainless steel
and industry. WEINE: And, you know, we are
the last Australian fruit processor and vegetable processor of scale. And I think that's really important. You know, we employ more than
500 people in the Goulburn Valley. And that will swell to about 1,200
people in the peak of the season. And then there's about
2,700 downstream jobs that benefit from our position
in the Goulburn Valley.

Since its near-death experience, the outlook for SPC Ardmona
is now much brighter. HALL: The dollar has moved
in the right direction. The company
has actually rebooted itself. It's producing different products,
there's a lot more optimism around. Obviously, uh, water's plentiful
at the moment, so that's good news. We're getting good rainfall now
just as we start to plant the seeds, which is encouraging. Our fruit intake this year
will be up on previous years, which again is great for our growers
and our farmers, which is good news. We look to take in
about 45,000 tonne of tomatoes, so that's up on last year,
which is a really good sign.

But some stiff headwinds remain. GODWILL: The future's
not necessarily assured. Uh, SPC Ardmona is still marginal. The growers are marginal. We're fighting in
a very, very difficult industry. But we've fought for a long time. We've always been in the industry and we've continued
to stay in the industry. We wouldn't do that
if we believed there was no hope.

Peter Hall has replanted orchards
with new fruit varieties to meet new markets. But it's a major investment and it will take several years
before he sees a return. This variety is called a Modi. HALL: It's a red apple,
sort of a bi-colour. It's a very firm apple.
It comes from Italy. And it's an early season apple,
comes in January, February, so we think it fits a nice slot and a very nice-tasting apple, very consumer-friendly and
good shelf life, so it's got... You'll see them
in a couple of years' time. We seem to live in a world where people's memories
are very transient. They live on their Facebook pages
and social media pages, but they need to be
continually reminded that the product
that they're getting and the clean, green nature
of that product comes at a cost. And people need to understand
that they have to pay for that cost. It doesn't come cheaply.
It doesn't come for free. It comes through
the sweat of farmers and the sweat of companies
prepared to back their operations, like SPC did. And consumers
have got to buy into that. And if they don't, they'll have to
buy products from countries that I think
are far more questionable in the way they grow their food, produce their food
and process their food. We just want a fair go,
we want a level playing field, and we want consumers
to really embrace SPC and our wonderful
clean, green quality products, and buy more of them. I think the great Australian public
had a bit of a wake-up call and said, "Hey, it's hard work. "It's high risk
having home-grown food. "We'll go out and we'll buy.
We'll buy that product." And what I say is, "Keep buying it!"
Don't stop! (ALL CHEER)

Without doubt, the saving of SPC is the greatest legacy
of Sharman Stone's time in politics. And those fruit trees in blossom
have a special significance.

It must give you
some inner satisfaction that it was staved off and saved.

It does. It gives me great joy... (LAUGHS)
..pathetic almost, when you drive past an orchard
that is replanting. Wow.

(SIGHS) All good?
(CHUCKLES)

DOMINIQUE SCHWARTZ: Brett Kiely
is just the type of person government and farming groups
want to attract to the land - young, keen and dedicated.

But he's had a hellish introduction
to dairying. Within weeks of starting, he watched one-fifth of his herd
collapse and die with bovine anaemia.

We bought this farm back in January. We moved in and brang 155 cows up to start calving
over the next few months, and... ..yeah, we had the Theileria virus
strike us. We lost 25 in total
over a 6-week period.

Theileria is a parasite
transferred to cows by ticks. It can destroy an animal's red blood
cells, causing bovine anaemia.

The parasite
used to be known as benign, but there's nothing benign
about the virulent strains which have been spreading across
mainland Australia since 2006. All I can liken it to
is watching someone die of cancer. They just fade away, get weak.
Eventually they can't get up. They don't eat, they don't drink,
and that's the end of them.

As well as the 25 cows,
Brett Kiely lost just as many calves.

Bovine anaemia
affects both dairy and beef cattle. It tends to flare when the weather
warms and ticks are prevalent and when cows are under greater
stress, such as calving. There you go, darl. You're hungry,
aren't you, sweetheart? Hi, Jill. How's it going?
Hi, Jade. Not too bad, thank you.
That's good. How are you?
Good. How's she been going? Yeah, not too bad. She's... She has moved a little bit
since you were here last. Yeah, I can see that. And she's
looking a little bit brighter. Jill Kent's pregnant cow, Hope, was struck down with bovine anaemia
a month ago. It's alright. Despite trying,
she hasn't stood since. It's been a long haul with her, just carrying feed and water to her
every day, and I try to put an old rug over her
at night time, and just looking after her
and just hoping she gets better.

Hope's survival, and that of
her unborn calf, is uncertain. HAMMER: When cows are on the ground
for a long time, they get what's called
downer cow syndrome and it's another
potentially fatal condition, due to muscle swelling from the weight of the cows
being on their legs. What's frustrating for Dr Hammer is that there's a drug
on the global market which can treat bovine anaemia, but it's not registered in Australia. So, how important
do you believe it is to have a treatment available? Oh, it's incredibly important. Dairy farmers become very close
to their dairy cows, and those are valuable animals
as well. But it's also farmers feel terrible when their cows are dying
from a disease, particularly when we know that
it can be treated successfully. That, to me, is really upsetting. Um, if I know that there is
something that could cure her, and it's not available,
that's just... I don't know, it's heartbreaking.

KIELY: It's just plain cruel, watching them go down
with this disease and knowing that there's something
available to treat them with, that we're not allowed to have. One injection of buparvaquone
can save a cow if administered in the early stages
of bovine anaemia. The drug's been used
in at least 20 countries, including New Zealand. We had a huge number of herds, a huge number of cows,
affected all at the same time, at a busy time of the year, so it did make a big difference. Dr Mark Hosking was instrumental in convincing
the New Zealand Government to grant a special licence
for the drug in 2013, when theileria affected thousands
of beef and dairy cows across the North Island. HOSKING: We treated, ourselves,
in our practice, about 600 or 700. I would say three-quarters
of those survived. For those ones that were given
early, it was very successful.

The drug's down side is that it can remain
in an animal's system for months. There's no evidence to suggest
the residue is harmful for humans. But food safety for domestic
and export markets is paramount.

In New Zealand, milk from a cow
treated with buparvaquone is banned from the food chain
for 43 days, and meat for a year and a half. New Zealand's Primary
Industries Ministry says none of its export markets
have raised any concerns about the drug's use. There were some pretty strong
mechanisms in place to make sure we knew who those
animals were that had been treated and be able to record them
through their lifetime.

Agriculture Minister Barnaby Joyce
says he's not prepared to jeopardise Australia's multi-billion-dollar
meat and livestock trade. He says any residue of buparvaquone
detected in our exports would be a serious violation,
with serious consequences.

Brett Kiely wouldn't hesitate to use
buparvaquone if it were allowed. A cow dead in the paddock
to me is worth nothing. And even if I've got to
hang onto her for 18 months to then on-sell her, it's...it's a lot better option
than watching them die.

Craig and Theresa Hanrahan
would also like the option. Like Brett Kiely,
they supply Murray Goulburn. They've taken a king hit
in their milk payments and can't afford to have anaemic cows
not producing, let alone dead cows. Very tough. And, I suppose, an outbreak
of this disease is probably not what anyone
wants to see this year.

HAMMER: We've seen,
just in the last couple of weeks, three more farms close in the area, and, um...and all of those farms
have had theileria.

Well, that's the programme.
We hope you enjoyed it. And don't forget, Landline's
on iview, Facebook and Twitter. And our regular show is every
Sunday at noon on ABC TV. I'll see you next week. Bye for now.

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