Industry reacts to SPC merger

Three household brands are on track for a multimillion merger. But how will the decision affect disillusioned fruit growers?

A three-way merger between a number of prominent Australian food brands may bring some long-term stability for Victoria’s fruit producers who have been rattled by fruit allocation cutbacks and high input costs.

Earlier this year, The Original Juice Company announced it had entered an agreement to acquire Shepparton’s SPC, along with powdered milk business Nature one Dairy.

Fruit Growers Victoria service manager Michael Crisera said while the news was still fresh, it was too early to tell the toll the merger could take on Victorian growers. 


“For long term stability and confidence, it’s probably seen in a positive light, but we’re little unsure what this means for growers in terms of a financial benefit, or volumes sold,” Mr Crisera said.

“But the juice market is based on your by-product, no one grows fruit specially for juice. The value is not there, it’s even worse than canning fruit.”

The news of SPC’s merger with The Original Juice Company comes as SPC announced in June it intended to slash orders of pears and peaches by almost 40 per cent has left some growers contemplating removing trees from orchards.

A merger between SPC and The Original Juice Company was announced earlier this week. Picture: Zoe Phillips

Cheap imported canned fruit and increased cost of living pressures were cited by SPC as the catalyst for the “difficult decision”.

Mr Crisera said some growers had already begun ripping out peach trees as a result of the news, which devastated grower confidence.

“There’s been a huge dint in the confidence of growers, and whether it’s worth growing,” Mr Crisera said.

“A few growers have pulled out their peaches and some of the larger guys have scaled back a bit. People are assessing what they’re going to do with that excess fruit.”

The three-way merger comes at a difficult time for food manufacturing with inflation biting both on the factory floor and at the supermarket checkout.

Original Juice chairman Jeff Kennett announced he would step down from the role once the transaction was completed.

“The agriculture industry is a pillar of our national identity in Australia and the backbone of many regional towns across the country,” the ex-Victorian premier said in the ASX statement.

“We should be supporting businesses like OJC, SPC and NOD to continue to thrive in their mission to support local growers, employ Australians in our processing plants and produce iconic healthy products for consumers, both in Australia and abroad.”

The transaction is subject to several conditions, including Original Juice Company shareholder approval and stock exchange compliance.

Coca-Cola Amatil sold the famed fruit and vegetable processing business in 2019 to the Shepparton Partners Collective for $40 million.

Victorian taxpayers invested more than $22 million in upgrades to the Shepparton site between 2014 and 2019 as the processor struggled with changing consumer demands.

SPC chairman Hussein Rifai said the collective would aim to strengthen their domestic sales before focusing on export markets as part of the three-way merger.

“Since acquiring SPC from Coca-Cola Amatil, our strategy has been to firmly establish ourselves as a leader in both the Australian and global markets,” Mr Rifai said.

“Building a strong foundation in our home market is vital for sustainable growth and success.”

The Original Juice-SPC announcement comes only one week after SPC joined with other Australian-owned brands to call on consumers to back smaller food manufacturers.

SPC chief marketing officer Peta Allsopp said many shoppers were unaware that many tinned fruit and vegetable products competing with SPC were produced abroad.

“At times, (consumers) are either knowingly or unknowingly choosing imported options from lower cost producing countries such as China and South Africa.