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Coca-Cola’s SPC Ardmona demands better government support

Peter Kelly, the managing director of struggling Australian food company SPC Ardmona, has stated that the federal and Victorian governments have failed to support Australian farmers and food businesses as the business prepares to discuss a $25 million rescue and restructuring package.

SPC Ardmona, which is owned by Coca-Cola Amatil (ASX: CCL), has struggled in recent times, particularly in light of the high Australian dollar, which has seen customers turn to cheaper imported alternatives. Whilst the government has expressed its support of Australian farmers and businesses, Kelly has questioned why government-owned institutions such as hospitals and jails are not being instructed to buy Australian-made products.

Currently, these government-owned institutions are amongst the biggest importers of processed foods, giving companies such as SPC Ardmona a very small market share within this area. Kelly recognises that it would be a big win to get Australian health departments to buy Australian goods in order to support local businesses.

Foolish takeaway

Although further support could be given by the Australian government, SPC’s sales have been boosted by demand from supermarket giants Woolworths (ASX: WOW) and Wesfarmers’ (ASX: WES) Coles division. As the Australian dollar falls, the business should recognise even greater sales as imported goods lose some of their appeal.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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