Woolworths will source 100 per cent of its Select private label range of frozen vegetables from Simplot Australia in a move that will see the retailer source all of its frozen vegetables from Australia by May next year.
Woolworths currently stocks 39 lines of Select frozen vegetables, 11 of which are sourced in Australia. The new deal will move 17 lines to Simplot from overseas suppliers in Europe, New Zealand and China.
Woolworths said 10 lines of Select steamed vegetables and stir fries that cannot be sourced in Australia will be retired, despite being popular products.
Tjeerd Jegen, MD of Woolworths supermarkets, said: “We are absorbing the cost of this decision – when they arrive on shelf in May 2014, Woolworths Select frozen vegies will continue to be sold at the same great low prices that our consumers enjoy today.”
Woolies already sources more than 17,700 tonnes of both branded and private label frozen vegetables from Simplot. The new deal will see an additional 5,100 tonnes of peas, onions, carrots, corn, green beans, broccoli, cauliflower and Brussels sprouts produced at Simplot's Devonport plant in Tasmania, with some volume going to Simplot's Bathurst Plant.
Simplot has said both plants are currently under threat of closure due to the high cost of manufacturing in Australia, and the influx of cheap imported products.
Simplot MD Terry O'Brien said the commitment by Woolworths was positive news for the Australian vegetable processing industry and farmers.
“The deal with Woolworths is greatly appreciated and great news for the industry but we still need to supply products at competitive prices. We sincerely appreciate Woolworths' confidence in backing our business and that of our growers,” he said.
In August, Woolworths awarded a $7 million contract to SPC Ardmona in place of its existing overseas suppliers in support of fruit growers from Victoria's Goulburn Valley in Victoria.
