Senator O’Sullivan warns Wilmar Sugar to respect the Growers’ Choice

26 June 2014

Queensland Nationals Senator Barry O’Sullivan has called on Wilmar to behave as a responsible corporate citizen and officially recognise the two-thirds economic interest cane growers hold in their product.

Rising to his feet in the Federal Parliament Senate Chamber on two separate occasions over the past fortnight, Senator O’Sullivan said growers servicing Singapore-owned agribusiness Wilmar Sugar’s eight mills across Queensland should be provided with the right to choose their preferred sugar marketing outlet.

He said Wilmar’s intention to exit the QSL single-desk marketing arrangements from 2017 ignored long standing industry agreements that cane farmers held a ‘Grower Economic Interest’ (GEI) in two-thirds of the sugar produced throughout the supply chain.

“For almost a year, Wilmar endeavoured to negotiate with QSL to make arrangements that allow them to do direct marketing with the growers’ interests,” Senator O’Sullivan told the Senate.

“During that time, the matter of grower economic interest was discussed. It was on the agenda, and the parties were endeavouring to try and make a determination that would enshrine that interest in future contractual arrangements.

“Eventually, Wilmar took the decision to withdraw from QSL. Wilmar decided that it would take not only its economic interest in the sugar that it processed but also that of the growers.”

Senator O’Sullivan warned Wilmar that its intended course of action could be in stark contradiction to its pledges to the Federal Government when seeking Foreign Investment Review Board approval in 2010.

Wilmar expanded into the sugar business in 2010 through the acquisition of Sucrogen Limited for $1.75 billion.

On 8 November 2010, then-Federal Treasurer Wayne Swan issued a press release announcing Wilmar’s FRIB approval.

The press release states: “Wilmar has informed FIRB that it does not anticipate any significant changes to Sucrogen’s operations and its management.”

Source:http://ministers.treasury.gov.au/DisplayDocs.aspx?doc=pressreleases/2010/078.htm&pageID=003&min=wms&Year=&DocType=

“I would argue that there is no greater or more significant change than what Wilmar is currently proposing for our sugar industry,” Senator O’Sullivan said.

“Just as the ACCC has been called upon by Canegrowers and the Queensland Government to investigate Wilmar Sugar’s proposal, the Foreign Review Investment Board should also investigate whether this company is operating in a manner that is entirely consistent with the undertakings it made when seeking approval to acquire Sucrogen Limited from CSR Limited.

“We should all approach this company’s public statements with caution.”

Senator O’Sullivan warned Wilmar it faced an ‘unrelenting’ public campaign from Federal and State parliamentarians until it respected the growers’ choice.

“I call on Wilmar to respect the 100-year convention of the 4000 families who have nourished them to date in my home state,” Senator O’Sullivan told the Senate.

“The growers’ choice is not a request but a demand on Wilmar that this company recognise the economic interest belonging to cane growers.

“It recognises the ability of grower-producers to harvest the benefits and expose themselves to the risks that markets produce that they and their families grow.

“Those of us who have any capacity to influence the decisions will not relent until such time as those growers’ interests are recognised.”

Media Contact: Troy Rowling 0400 386 666.

Caption: Senator Barry O’Sullivan speaking in the Federal Senate Chamber.