LNP unites against Wilmar’s industry restructure

13 June 2014

Senator Barry O’Sullivan says Wilmar has revealed itself to be a ‘Trojan horse’ that plans to ransack marketing arrangements in the Australian sugar sector.

A group of LNP Federal Members of Parliament and Senators have signed and submitted an open letter condemning Singapore Sugar Giant Wilmar over its decision to abandon the current QSL export marketing arrangements to set up its own commercial model, tied to its global trading operation.

The show of strength, spearheaded by LNP Members and Senators who sit with the National Party federally, comes amid concerns Wilmar’s proposed restructure will jeopardise the long term viability and international competitiveness of Queensland’s $2 billion sugar trade.

The letter has been signed by Queensland Senators Barry O’Sullivan and Ron Boswell, Federal Member for Hinkler Keith Pitt, Federal Member for Capricornia Michelle Landry, Federal Member for Dawson George Christensen and Federal Member for Flynn Ken O’Dowd.

The open letter calls on Wilmar Sugar to reverse its moves to exit the marketing export process that has served Queensland industry for more than a century and return to the negotiating table with QSL and local growers.

Senator O’Sullivan said the open letter had been written because of a collective concern that Wilmar’s proposal goes against the interests of grower producers as well as the broader national interest.

He said Wilmar had entered the Australian sugar industry as a ‘trojan horse’ – initially claiming it would work collaboratively with growers before announcing its plans to ransack the canegrowing sector.

“By removing itself from QSL, Wilmar will instantly undermine a century of gains and prosperity for thousands of family-owned sugarcane farms,” Senator O’Sullivan said.

“Enabling a foreign owned business to completely restructure an industry’s landscape at the expense of the remaining, largely Australian owned businesses, is not in the national interest.

“Wilmar entered the Australian sugar industry claiming it was a responsible corporate citizen. But now it has shown its true colours.

“Wilmar appears to think it can bring the entire Australian sugar industry to its knees in its own quest for profits.”

In recent weeks the furore surrounding Wilmar’s announcement has grown across industry, with more than 1500 of the nation’s 4000 canegrowers writing letters of objection to the overseas company and Canegrowers Australia have called on the Australian Competition and Consumer Commission to investigate, labelling the move ‘anti-competitive’ and ‘predatory.’

LNP politicians have reported their electorate offices have been ‘inundated’ with concerned phone calls and emails from industry.

The LNP block has warned that Wilmar Sugar’s proposal to remove two million tonnes – or almost two-thirds of all exported Australian sugar – from industry’s collective annual export pool, will weaken QSL’s dominant marketing position in the global sugar export business, leaving the bulk of Australia’s millers and growers worse off.

The looming threat to the Queensland’s sugar industry’s sales base and structure was clearly apparent last month, with credit ratings agency Standard & Poor’s downgrading QSL from A/A-1 to BBB-, following the Wilmar announcement.

Senator O’Sullivan said Wilmar Sugar should publically recognise the two-thirds Grower Economic Interest (GEI) farmers had in their product.

“Our LNP block is here to defend the viability of the thousands of farming families that are now nervous about their futures because of Wilmar’s proposal,” he said.

“I want what the growers want – and the message I am hearing loud and clear is that growers want Wilmar to commit to working under the existing century-old Australian sugar marketing system.

“We are sending a clear message to WIlmar that its actions will be resisted.” Senator Ron Boswell said Wilmar’s proposal would change the landscape of the Australian sugar industry.

“The current sugar marketing arrangements have served Australia well for more than a century, and this should be respected,” he said.

“Wilmar should think very carefully about the true impacts of its proposal and the potential fallout in its relationship with growers before it proceeds any further.”

Media Contact: Troy Rowling 0400 386 666