The Victorian government handed over $22 million to save this cannery, and now Coca-Cola Amatil might sell it off

Zak Kaczmarek/Getty Images for Coca-Cola
  • Coca-Cola Amatil is looking at offloading packaged fruit and vegetables division SPC.
  • In half year results, the food division posted a loss of $1.7 million on revenue of $132.8 million, reflecting a “modest loss” for SPC.
  • Overall, Coca-Cola Amatil posted a statutory net profit after tax of $158.1 million, up 12.8%.

Beverage maker Coca-Cola Amatil announced a strategic review of SPC, Australia’s leading processor of packaged fruit and vegetables.

Among the options are a change in ownership, alliances or mergers. SPC, with 500 staff, is a major employer and buyer of fruit and vegetables in the Goulburn Valley, Victoria.

A short time ago, Coca-Cola Amatil shares were up 4% to $9.90.

In half year results released today, the food division posted a loss of $1.7 million on revenue of $132.8 million. The company says this reflects a “modest loss” for SPC.

The review of SPC coincides with completion of a four-year, $100 million co-investment in SPC with the Victorian Government — $22 million by the state and $78 million by Coca-Cola Amatil.

“As we said at the time, without this investment the future of Australia’s best-loved packaged fruit and vegetable brands were in question,” says Group Managing Director of Coca-Cola Amatil, Alison Watkins.

“With this investment we kept SPC operating, invested in modernising the plant and created new business opportunities.

“These included new tomato and high-speed snack lines, a new aseptic fruit processingsystem and new export opportunities including China, all of which will support ongoing growth.

“We believe there are many opportunities for growth in SPC, including new products and markets, further efficiency improvements, and technology and intellectual property. The review will look at how this growth could be unlocked, potentially through a change in ownership, alliances or mergers.”

SPC is a household name in fruit, vegetables, baked beans and spaghetti.

Coca-Cola Amatil has hired consultancy Kidder Williams to assist with the strategic review.

The company announced its half year results, posting a 12.8% lift in statutory net profit after tax to $158.1 million.

Coca-Cola Amatil declared an interim dividend of 21 cents a share, franked to 65%.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.