Anti-Dumping Commission report sides with SPC over Italian tomatoes

IT'S not the government or the company's fault. The real reason SPC is against the wall could be a sea of canned tomatoes illegally dumped on supermarket shelves.

DON'T blame the government, or SPC.

The real reason the Victorian-based producer could be going under is a flood of Italian canned tomatoes illegally dumped in Australia and sold by supermarkets for knockdown prices.

That's the view outlined in an Anti-Dumping Commission report which found a sea of cheap imports caused "material injury" to Australian producers through lost sales, market share, price depression and reduced profits.

"It is clear that shelf prices of SPCA [SPC Ardmona's] products were undercut by Italian dumped imported products," the report states.

It also took aim at major Australian retailers including Coles, Woolworths, Aldi and the Metcash network - who are responsible for 82 per cent of the prepared or preserved tomato sales in Australia - for using cheap imports in private label products and undercutting local producers.

"The Commission considers that purchases of Italian imports at dumped prices have allowed retailers to maintain their reduced shelf prices for generic private label products and provide for a margin of undercutting that is greater than what it otherwise would have been in the absence of dumping."

Prime position. A report says Aussie retailers give the best spots to their private label products.

Dumping occurs when goods are exported to Australia below their "normal value," regarded as the domestic price of goods in their country of export. It's not allowed under international trade agreements and can lead to remedial action when it causes "material injury" to an Australian industry, according to the Anti-Dumping Commission.

The report estimates as much as 56 per cent of the Italian processed tomatoes in Australia have been dumped here at unusually low prices.

It also claims private label products like Coles Smart Buy and Woolworths Home Brand have driven the decline for local growers as they are given prime position inside retail stores.

"The major supermarkets determine the shelf placement of all products within a range of goods. In doing so, retailers tend to provide the prime locations to the highest volume selling goods, often being their own private labels."

"Consequently SPCA's products have been moved to unfavourable locations on shelves within the prepared or preserved tomato range of goods which can exacerbate the lower sales performance," the report reads.

Pear Grower John Dimitropoulos sees a bleak future unless the Government acts. Picture Norm Oorloff

Coles spokeswoman Anna Kelly said the company has an "Australia First" sourcing policy and tries to offer Australian products when they're in supply.

"SPC was unable to supply Coles with private label canned tomatoes because of Victorian floods in 2011 - the period covered by the Anti-Dumping Commission report," she said, adding that the company didn't discriminate when applying their discounts.

"Coles analysis shows that Australian processed tomato companies have largely failed to keep with customer trends towards more innovative value added tomato products and conveniently packaged fruit products."

However SPC claims the retailer's aggressive marketing of private label products saw them lose 40 per cent in sales volume. Coles slashed the price of a 400 gram can of tomatoes from $1.19 to 80 cents in April 2011.

SPC managing director Peter Kelly also said the business had been hit by a "perfect storm" recently.

"The high Australian dollar, which appreciated more than 50 per cent from 2009 to 2013, has both enabled the flood of cheap imported product to be sold in Australia below the cost of production here, and also decimated the company's export markets," he said earlier this week.

Home Brand products pictured at a Woolworths store.

The report comes as the future of SPC Ardmona is in crisis, with political debate over whether they should be entitled to $25 million worth of federal funding to save their ailing operation.

The company, which is owned by Coca-Cola Amatil claims they "need encouragement" to continue operating in Australia and have sought a total package of $50 million for new products and development.

Prime Minister Tony Abbott has flatly refused, saying Coca-Cola Amatil, which has a market capitalisation of $9 billion and made $215 million profit in six months last year, should be able to look after its own subsidiaries.

Treasurer Joe Hockey also put the boot in, saying the "age of entitlement" is over, while Malcolm Turnbull said if the company can't keep the business running they should sell it to someone who can.

Today Mr Kelly acknowledged the support the company has received.

"There has been a surge of support for Australian grown and made Ardmona tomato products. I urge all Australian consumers to consider the quality and value of Australian grown products and think carefully when they choose to buy tomato products in retailers."

The two largest exporters of dumped Australian tomatoes will now face penalties of more than 26 per cent, while another 90 exporters who refused to co-operate will receive the same penalty.

Woolworths failed to respond to request for comment in time for publication.

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