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.