Family Biz: Cannery Row, or Bitter Thursday

Tony Latina's story echoes those of all Goulburn Valley growers seeking last ditch government help as they're suffocated by a high dollar and a cheap grocery revolution.

Most of the stories you read in our family business series are success stories. After all, there is a pretty strong survivor bias at work: any business that survives a generation or two and therefore comes to our attention is, by definition, a success.
Today’s family business is not a success story. It’s not a total failure yet because Tony Latina is a fighter, but his son Sebastian is looking for a job and Tony is only going on because he can’t sell. But it ends with him.
The Latina family grows peaches on 65 acres near Cobram on the Murray River. They have been supplying a Shepparton cannery, father, son and grandson, for 40 years but last month that cannery, now owned by Coca-Cola Amatil, told Tony and most of the fruit growers in the valley that their fruit was no longer needed because the high Australian dollar was killing sales.
Tony, in despair, is now bulldozing his trees, because it costs money to keep them in the ground if there’s no market for the fruit. In fact bulldozers are hard at work right across the Goulburn Valley this month, grinding into the earth the broken hearts of dozens of second and third generation family fruit growing businesses.
Today – call it “Bitter Thursday” after the sequel to John Steinbeck’s novel Cannery Row, which was Sweet Thursday – growers are rallying in Shepparton to try to get some help from the government, and as President of the Victorian Peach and Apricot Growers Association, Tony Latina will be leading the march.
Last week at the Coca-Cola Amatil annual meeting, chief executive Terry Davis laid the problem at the feet of the big supermarkets, Coles and Woolworths: “The high Australian dollar has seen the marketplace flooded with cheap, lower quality private label packaged fruit imports by the major retailers.”
“Regrettably, the flow on effect to our growers, to our local communities and to regional employment from the increase in imported product is devastating.
“My personal view is that ultimately Australian consumers will need to vocally encourage the major Australian retailers to lift their support for domestically grown and produced brands instead of supporting imported private label products, or consumers will face the very real proposition of seeing less and less Australian grown produce on retailer shelves.”
Tony Latina is even clearer: “The supermarkets are to blame. They are importing canned fruit to build their profits. Our stuff just can’t compete.”
But while it’s tempting to blame someone, it’s not the supermarkets’ fault. They are in business for their shareholders and customers so they have to source canned fruit, and everything else, at the lowest price.
It’s basically a cyclone, like the one that hit the Goulburn Valley in 1967 and wiped out the Latina family’s farm along with many others.
Mario Latina and his family had moved to Cobram from Brunswick in Melbourne two years before.
Mario had sold the family home and bought 160 acres with his brother Salvatore. They wanted to recapture the lifestyle that the Latina family had had for generations in Sicily, where the boys had grown up. So they planted olives, as well as some vegetables.
A couple of years later the brothers decided to go their separate ways and they subdivided the property. Mario had to take out a loan and pay compensation to Sal because his parcel was better growing land than his brother’s.
Then almost immediately a strong wind destroyed that year’s crop. To service the debt Tony and his brother Joe, then in their teens, had to go out and get jobs while Mario rebuilt the farm.
Tony says Mario never really recovered from that blow. He kept saying: “we shouldn’t have left Melbourne”, and passed away in 1973 at the age of 61.
Tony was then 21 and his brother Joe was 25. They inherited a business that had too much debt and couldn’t afford to pay them salaries. “We barely had enough to eat”.
They couldn’t sell, so they planted peaches, for the Ardmona cannery in Mooroopna near Shepparton.
In 1985 Joe sold out to Tony for $35,000 and went back to Melbourne. Their two sisters had left a while ago.
Tony then nursed their mother through several years of illness until she, too, passed away. When Tony inherited the entire farm from their mother, he says, his siblings didn’t mind.
At that stage life was pretty good. The fruit was plentiful and the cannery was taking two-thirds of his crop. He could have got better prices from the fresh fruit markets but decided to stick with the cannery.
In 2009 he got a letter from Ardmona describing him as a “preferred grower” because of his loyalty. The letter said the cannery would take all his fruit from 2010 on into the future.
When he got that letter the Australian dollar was 70 US cents and there was virtually no such thing as imported tinned fruit. The canneries were booming and couldn’t get enough fruit from growers like Tony Latina.
But the dollar started going up almost immediately and by the end of 2009 it was 90 US cents. It broke through parity in October 2010 and this morning it’s still 101.6 US cents, having traded as high as 110. The trade-weighted index is near a record high as well.
Meanwhile Wesfarmers had bought Coles and, in May 2008, appointed Ian McLeod, a veteran of the Asda chain in Britain that’s owned by Walmart. McLeod declared, and still does, that Australians pay too much for groceries and has revolutionised grocery retailing in this country with lower prices.
McLeod has produced food price deflation generally in this country for each of the past four years and is largely responsible for Australia’s low inflation record, and therefore low interest rates, including Tuesday’s rate cut.
But Tony Latina and the Victorian fruit growers are some of the broken eggs from the making of that omelette.
As Terry Davis of Coca-Cola Amatil said last week: “We are seeing our Australian manufacturers either close down or move offshore due – in large part – to the unprecedented strength of the Australian dollar. The longer-term risk is that food prices in this country will increase dramatically should the Australian dollar fall.”
Davis has asked the government for temporary tariffs to help the Goulburn Valley growers, as well as longer-term tougher anti-dumping rules, such as those recently introduced in New Zealand. That’s what Tony Latina and the other growers will be marching for in Shepparton today.
Meanwhile, Tony’s 30-year-old son, Sebastian has applied for a job in town. He recently got married and now has a son and a mortgage, so he can’t afford to pursue the dream of taking over the family farm. Tony’s other children, Mario and Josephine, are already working in town.
As for Tony, he’ll take out his 5000 or so cannery trees and is now sending all the fruit that’s left to the market. But that’s what everybody else is doing, so prices are collapsing – if you can sell it all.
“I’m stuck here,” says Tony. “You can’t sell an orchard in the Goulburn Valley now. I’ve got a little bit of super, but not enough. But if Sebastian goes I’ve got no future here.”

For more family business commentary click here.


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