The Chiko Roll lives on: Struggling manufacturer wins three-year payroll tax reprieve from New South Wales government
Friday, August 23, 2013/
The Chiko Roll could be saved from extinction, with the New South Wales government offering the humble snack’s manufacturer a three-year reprieve from payroll tax.
United States food manufacturing company JR Simplot announced in June it was considering shutting down its Bathurst and Devonport plants.
But the NSW government has offered a $500,000 a year handout from payroll tax rebates over the next three years, in attempt to keep the business operating in Bathurst.
Yesterday NSW deputy premier Andrew Stoner and member for Bathurst Paul Toole announced the assistance measure, which, if accepted, will helps save the jobs of around 195 full-time staff in Bathurst.
“To help relieve some pressure on the plant and the staff who work there, Simplot has been approved for assistance in the form of payroll tax rebates for the next three years, through the NSW Regional Industries Investment Fund,” Stoner said in a statement.
Toole said in a statement Simplot’s Bathurst operation was the last remaining Australian-based large scale grower and processor of vegetables for the retail market.
“NSW Trade and Investment is working with mangers at the Bathurst plant to support their proposals for multi-million dollar efficiency upgrades to underpin the plant’s ongoing competitiveness.
“The upgrades are expected to deliver significant savings and ensure the ongoing viability of the plant when compared to other alternatives,” he says.
When Simplot announced it was considering the closures it said in a statement it was due to “unsatisfactory financial returns arising from a very competitive food industry environment”.
Other brands the Bathurst plant is responsible for manufacturing include Birds Eye, Edgell, Leggo’s, John West and Lean Cuisine.
A spokesperson from Simplot told SmartCompany it could confirm the NSW government initiative.
“More broadly, it’s one of a number of initiatives for financial assistance and grants that Simplot is seeking for Bathurst from the NSW and Federal Governments but at this stage it’s too premature to comment on some of them,” the spokesperson said.
SmartCompany asked whether or not Simplot was going to continue operating in Bathurst, but no response was available prior to publication.
Agricultural body the NSW Farmers applauded the government initiative, saying it gives much needed support to Australian manufacturing.
“We have been saying for years that manufacturing of Australian food is crucial if our agriculture industry is to survive and to ensure that consumers do not have to rely upon imported food,” NSW Farmers horticultural spokesperson Peter Daley said in a statement.
“This is a small first step but more importantly a good sign that our state government values local food manufacturing, growers and regional communities,” he says.
NSW Farmers started calling for government assistance for the plant in May this year.
IBISWorld industry analyst Naren Sivasailam previously told SmartCompany the food manufacturing sector has been under pressure.
“The extended drought certainly had an impact on the industry. The industry has been plagued by the threat of imports, and the high Australian dollar obviously hasn’t helped that.
“Growth rate has also been slow for vegetable and fruits, growing at just 1% a year for the past five years,” he says.
But Sivasailam said it was unlikely market pressures were the only influencing factor. He said it could also be a result of “their own manufacturing costs, like other companies have encountered”.