SR Exports, Australia‘s largest producer of tomatoes, blamed on Wednesday the country’s supermarket giants for their poor business which led to the agricultural company’s voluntary administration and loss of 60 jobs.

The company, which produces 30 per cent of tomatoes grown in Australia, pointed to the seasonal oversupply and high fixed price guarantees by Woolworths that caused the demand for SP Exports’ truss tomatoes to plummet in 2011.

The Childers-based company also lost $ 5 million in late 2010 due to the flood in Queensland, another $ 1 million of cherry tomatoes because of a chemical spray drift in March 2011 and $ 7 million worth of tomato seedlings in Bowen in July due to a deadly herbicide that hit a nursery irrigation system, disclosed SR Exports Managing Director Andrew Philip.

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Carl Walker, president of the Bowen Gumlu Growers Association, confirmed the oversupply of tomatoes which causes the industry to be unviable since growers could not afford to reduce their margins which are down to bare minimum.  

“It’s only pretty much the love of doing it that’s keeping a lot of people in the industry,” Mr Walker told ABC.

He warned of more growers pulling out of the industry if their financial returns worsen and sought support from consumers and retailers.

SP Exports, besides sacking the workers, also placed its eight properties for sale to help pay for the $ 12.5 million the company owes to unsecured creditors and another $ 18 million to secured creditors. Families of the workers started to leave Childers.

John Russo, president of the Childers Chamber of Commerce, observed that the exodus of families started a few months ago when some of the children stopped going to their classes, while their parents began looking for other employment opportunities.

SP Exports also had crops at Bundaberg and Echuca in Victoria.

John Shanahan, a partner at KordaMentha which was appointed administrator of SP Exports, said the firm could pursue a potential $ 2.5 million insurance claim over the two chemical oversprays that damaged some of its tomato crops.

A skeletal staff had stayed behind to help the administrators, but most of the 60 workers had left. Besides the 60 employees, there are hundreds more of contract tomato pickers who are also affected by the closure since their contractors still owe them salaries which are in danger of not being paid because of the situation.

A spokeswoman for Victorian Deputy Premier Peter Ryan said that based on preliminary advice, the closure of SP Exports has no impact on the state’s tomato processing industry.

Due to the closure of SP Exports, Ausveg Chairman John Brent also blamed on the price war between Coles and Woolworths and warned that other vegetable farmers may also end up shuttering their farms.

“The supermarkets can’t keep on screwing down the major growers and expect to have a local fresh fruit and vegetable industry remain,” The Australian quoted Mr Brent.

Ausveg earlier warned of the negative impact of the price war on the two supermarket giants after Coles cut the prices of some fruits and vegetables by up to 50 per cent in early February, which Woolies matched. The price war initially started in 2011 with deep discounts on bread, milk and detergent.

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