Cowra cannery Windsor Farm Foods has been placed into voluntary administration and its 70 plus workers dismissed without pay.
The NSW company was the last wholly owned Australian cannery and was once one of the largest canning lines in the Southern Hemisphere.
AUSVEG, the country's peak vegetable growers' industry group, described the closure as a "blow" and called on the federal government to do more to support the food processing sector.
“The loss of Windsor Farm is another crushing blow to the already struggling food processing sector that is trying to stand up under the enormous pressure placed on it from imported foods and the retail sector,” AUSVEG chief executive, Richard Mulcahy said.
“This is the second agribusiness to close in as many weeks, after the liquidation of Basacar produce in Bundaberg last week, and a string of others over the past 12 months.
"The Labor government needs to stop its rhetoric about Food Plans, Asian Centuries and voluntary retail codes and implement programs that ensure the continuity of Australian jobs and the food manufacturing sector,” he said.
In newspaper reports Dick Smith blamed the closure on an unsustainable price war between Aldi and Heinz, which moved its beetroot production to New Zealand in May 2011.
The problems started, according to Smith, when Aldi started selling beetroot at 75 cents a can which it sourced from Heinz and then Woolworths and Coles matched the price.
However Aldi issued a statement saying it was surprised by the closure as it had signed a three-year contract for supply of beetroot with Windsor Farm from October this year.
The administrator, Trevor Pogroske of Grant Thornton Australia, will hold a meeting of creditors in Cowra on 22 March.
The administrators have said they are seeking an interested party to buy the Windsor Farm assets and if possible re-employ workers.
Some of the cannery's former workers are reportedly calling on Dick Smith to help to convince Aldi to purchase the cannery.
Dick's Smith sources his Magnificent Australian Grown Foods beetroot from Cowra.
