Woolies in deal to source SPC fruit

Woolworths has beefed up its "Australian-made" credentials just days before the federal election and in the wake of growing criticism over its treatment of local suppliers, inking a deal to source all its private-label tinned fruit from Victoria's SPC Ardmona.

The conversion of the supermarket chain's packaged fruit range that sells under its "Select" brand to SPC is expected to save 50,000 trees in the Goulburn Valley that would have otherwise been ploughed back into the ground.

Victoria's fruit farmers have been facing the worst conditions in decades as the soaring Australian dollar decimated export markets while attracting a flood of cheap imported fruit into the country.

In recent months there were fears growers would be forced off the land as fruit that had no buyers would be left to wither on the branches or be destroyed.

A deal unveiled on Wednesday will see Woolworths inject $3 million into SPC, which is owned by beverages group Coca-Cola Amatil. The deal is expected to underwrite the future of SPC's Victorian factory, which directly employs about 1500 people and a further 2700 jobs in the Goulburn Valley.

SPC will supply all the apples, pears, peaches and apricots for the supermarket's private label range.

Woolworths' decision to convert to 100 per cent Australian-sourced product comes as the supermarket industry faces accusations from politicians and pressure groups that the sector's reliance on private label groceries and overseas suppliers is crushing local manufacturers and farmers.

Woolworths said the agreement built on work it had already done to source 13 lines of Select private label canned fruit from SPC, in a deal worth $7 million.

A similar relationship between Coles and an apple and pear grower in Shepparton that employs 500 people has allowed the supplier to invest $3 million in a new packing facility. Coles also stocks more than 170 lines of goods from SPC.

SPC managing director Peter Kelly said the Woolworths contract was a great decision for SPC and growers.

"This commitment to Australian grown and produced products is exactly what the industry and our Australian farmers need."