Tasmanian potato growers are locked in a dispute with US food giant Simplot, with warnings the stand-off could threaten jobs at the company’s Ulverstone processing plant.
Simplot terminated price negotiations with TasFarmers’ Simplot Potato Committee earlier this month and began sending contracts directly to individual growers.
The company wants to pay between 46 and 49 cents a kilo this season, barely above the estimated 42 cents a kilo it costs growers to produce the crop.
TasFarmers chief operating officer Neil Grose said growers’ margins had fallen by more than 60% after price cuts over the past two seasons.
Grose said Simplot ended discussions with growers’ representatives by email, despite negotiations having been conducted in good faith to that point. He called on Simplot to provide the complete 2026/27 Grower Agreement before growers were asked to sign acceptance of its commercial terms.
Growers were given seven days to sign the new contracts before seeing the updated agreement outlining changed terms and conditions.
TasFarmers vegetable council chair Nathan Richardson said growers were reluctant to speak out publicly about the dispute.
“What a terrible feeling our growers have that, in fear of speaking out, their volume of spuds they grow or the whole contract may be put in question by the company,” he said.
Australian Manufacturing Workers Union Tasmanian organiser Mike Wickham said the consequences extended beyond the farm gate, with Simplot flagging a cut of around 30,000 tonnes from its 2027 harvest at the Ulverstone plant.
“Without potatoes, there’s no manufacturing of chips,” he said.
Simplot has not responded to requests for comment on the dispute. Last week the company said in a statement it rejected any suggestion it had acted inappropriately or sought to pressure growers during negotiations.
In parliament, Carlo di Falco, the Lyons MHA for the Shooters, Fishers and Farmers Party, questioned Primary Industries Minister Gavin Pearce over whether the government held concerns about Simplot’s long-term future in Tasmania and what involvement it had in the current negotiations.
Pearce said the opening price for growers was a commercial matter between processors and the farmers they contracted with.
“It’s a commercial arrangement between the processor, in this case Simplot and McCain’s and those growers that they have,” he said.
“Traditionally, the Simplot model is a cost-based model where they consider the increases and the changes in those input commodities that a farmer would have to suffer in order to produce that tonnage and therefore that price is adjusted on them taking that product into the processor.”
“Given the complexities of that we need to be at arm’s length from that. However, that doesn’t stop my support for potato growers more broadly.”
“Processors are incredibly important to Tasmania.”
“You can imagine with Simplot and McCain’s, for instance, in the potato industry, we lose one of those processors, then we’re down to a unilateral pricing and that price pressure can be placed on to growers.”
“The other issue that we have and I’ve raised this many times, is the imported product that we see from overseas.”
Simplot has agreed to meet with the grower negotiating committee on Friday.
