Frozen food processor McCain Foods will close its factory in Penola in South Australia's south east, resulting in 59 redundancies.
Like other struggling fruit and vegetable processors, McCain is pointing to a flood of cheap imported products, as well as high labour, raw material, fuel and electricity costs as the reason for the cutbacks.
McCain Foods regional president for Australia and New Zealand, Louis Wolthers, said Australian potatoes were the most expensive potatoes in the world.
The company is calling for federal and state government support to address the structural issues affecting the industry.
The plant is to shut down before Christmas, leaving 59 staff members without jobs. However, the potatoes grown locally will be processed at another plant at Ballarat in Victoria.
McCain has said it was committed to continuing operations at other plants in Victoria, New South Wales and Tasmania.
AUSVEG public affairs manager, William Churchill, said the announcement was “just another nail in the coffin for an industry which has faced an onslaught of assaults including rising costs and cheaply produced imports from overseas”.
“It is hoped that all efforts are made by McCain to continue sourcing potatoes from these Penola growers and making them into chips in Ballarat,” he said.
“What is urgently needed from federal decision makers is a commitment to overhauling Country of Origin Labelling Laws. Australian consumers have a right to easily choose locally grown frozen product, supporting Australian growers, like those in Penola, in the process.”
McCain will close its South Australian plant but remains committed to its other plants in Victoria, New South Wales and Tasmania.
