Australian fruit and vegetable processor SPC Ardmona has expressed disappointment in the Productivity Commission’s Accelerated Report findings, which denied provisional safeguard tariffs against imported processed tomato and fruit products.

“This is extremely disappointing for SPC Ardmona, growers and the Goulburn Valley region,” said Peter Kelly, Managing Director of SPC Ardmona. “We disagree with the Commission’s conclusion in the reports. We have provided compelling evidence that in these circumstances the immediate provision of safeguards should be applied,” he said.

The Productivity Commission will finalise the full report by 20 December 2013.

“This further delays action at a critical stage in our business and seasonal cycle and perpetuate uncertainty in the region,” Mr Kelly said. “I am very disappointed on behalf of all the people including growers and community members who supported our submission and have been waiting for a response,” he said.

In April 2013 SPC Ardmona began the process of making submissions to the Federal Government for application of safeguard tariffs against imported processed tomatoes and processed fruit in accordance with the World Trade Organisation (WTO) Safeguards Agreement. Australian Food News reported in June 2013 that SPC Ardmona’s request for safeguards had been referred by the Australian Government to the Productivity Commission.

In July 2013, Australian Food News reported that the Australian Government’s new Anti-Dumping Commission was also investigating the imported processed tomato and fruit products situation.

Anti-dumping measures are distinct from the safeguard measures denied by the Productivity Commission. Anti-dumping duties can be applied in circumstances where products are sold into the domestic market at ‘dumped’ prices and this is causing or threatening to cause material injury to the domestic industry. Safeguard measures can be applied if imports have increased rapidly, and this increase is causing or threatening to cause serious injury to the domestic injury.

For safeguard measures, there is no requirement that the increased imports are being ‘dumped’. According to the Productivity Commission, although the WTO Agreement on Safeguards provides no clear guidance on what constitutes serious injury, “it is consistently interpreted as being a more demanding test thn the material injury test applying in anti-dumping”.

SPC Ardmona said it would examine the report and implications for its business in detail.

Productivity Commission report findings

The Productivity Commission found that there was evidence of ‘serious injury’ to the domestic industry, caused by a combination of factors.

For tomatoes, the Productivity Commission found that damage was caused by ongoing competition from imports, decreased exports, retailer private label strategies and extreme weather events. For fruit products, the Productivity Commission found that damage to the industry was caused by loss of exports, private label strategies, reduced consumer demand and higher costs including labour costs. The Productivity Commission reported that for both tomatoes and fruit, supermarket decisions on pricing strategies and product sourcing “were made domestically, rather than being caused by changes in the world market for processed products”.

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