The overall impact of Coca-Cola Amatil in the Goulburn Valley has been positive. It bought SPC, which injected significant capital into the region. It invested in the business, including a $100million co-investment with the Victorian Government in 2014.
Now C-CA is putting SPC on the market after some challenging years. There is one more thing it can do for the Goulburn Valley — sell it to someone who wants to keep it going and keep it local.
There is understandable uncertainty for employees, growers who supply SPC and service businesses reliant on the manufacturer for much of their revenue.
If a private equity fund was to come in and basically sell-off what they could and move some or all of the operations out of the region, it would be a disaster for the Goulburn Valley.
Not only for the direct impact of the demise of the business, but for the message it would send out about Shepparton.
Many organisations, from the the Committee for Greater Shepparton to Greater Shepparton City Council and Shepparton Show Me have worked hard over the past five years to get Shepparton back on the map, as a destination for skilled people and a great place to invest.
The economy is performing well as a result, despite the headwinds of drought and water policy.
A buyer with a commitment to the Goulburn Valley and a stated intention to continue the journey back to profitability is needed.
While much has been made of SPC’s woes, the last few years have seen investments that reduce the cost base of the business and better enable it to access emerging markets. It is on a trendline back to profitability.
As C-CA chief executive Alison Watkins said, the two main drivers of a decline in SPC fortunes were the high Australian dollar and the aggressive pursuit of private label brands by the retailers.
Today, the dollar is back about 71¢ to the US dollar, and thanks to strong marketing by SPC with our farmers on labels, provenance is once again a selling point. It won’t be easy, but SPC is turning around.
Understanding the power of provenance and the unique place of SPC in the Goulburn Valley community are key factors in ongoing success.
We want C-CA to have a successful sale of SPC but feel that part of the definition of a successful sale is the ongoing sustainability of a business which is such a key part of our region. The right owner is, therefore, critical to our future.
Sam Birrell is chief executive of the Committee for Greater Shepparton.