Major Tasmanian hard produce grower-packer Premium Fresh entered voluntary administration last week with debts of A$6.5m, and is the latest in a number of Australian vegetable producers to have run into financial problems in the past 12 months.
Premium Fresh is one of Tasmania’s largest vegetable producers, turning out 45,000 tonnes of carrots, onions, swedes, turnips and shallots each year.
The company has blamed a poor growing season and the intense price competition between Australia’s two major supermarket chains, Coles and Woolworths.
Administrator Sal Algeri said Premium Fresh will continue trading while it negotiates with its creditors, however, and there are no plans to reduce staff numbers. “At this stage I’m not looking to downsize the operation significantly, it’s really continue the business as usual,” Algeri told the ABC.
The Tasmanian and Federal governments have committed to an assistance package of A$750,000.
“Both the State and Australian governments have been closely monitoring the situation and committed to providing a joint assistance package of A$750,000 to support Premium Fresh during the period of administration,” stated local parliamentary secretary Sid Sidebottom. “However, we are pleased Premium Fresh now has the opportunity to continue to trade with the support of its customers, suppliers and creditors.”
The issue has drawn a reaction from peak vegetable industry body Ausveg, which said the intense retail competition and regulatory environment are putting too much pressure on Australian horticulture businesses.
“What we’re seeing is another major food producer in this country unable to compete in this climate and it again highlights the concerns that there are serious underlying issues in horticulture that government and industry must work together to address,” said Ausveg spokesman William Churchill.