<\/p>\n
The prospective closure of Premier Foods\u2019s fruit processing plant in Tulbagh has raised concerns well beyond the loss of factory jobs. Producers warn it could leave hundreds of them scrambling for alternatives just months before the next harvest.<\/p>\n
Premier has begun a Section 189 consultation process on the proposed closure of Fruit Products Western Cape (FPWC).<\/p>\n
The company says the business is no longer economically sustainable because of rising production costs and declining global demand.<\/p>\n
About 90% of the factory\u2019s canned fruit is exported.<\/p>\n
The company responded to GroundUp with a statement saying it is working with farmers, government, the Competition Commission and other stakeholders to minimise the impact on employees, farmers and the Tulbagh community.<\/p>\n
Producers face uncertainty<\/p>\n
\u201cBasically half the capacity for the industry will disappear,\u201d said Jacques Jordaan, chief executive of the Canning Fruit Producers\u2019 Association (CFPA).<\/p>\n
According to Jordaan, South Africa has two main canning facilities: the FPWC plant in Tulbagh and Langeberg Foods in Ashton. Closing Tulbagh would remove almost half of the country\u2019s canning capacity.<\/p>\n
Read:<\/p>\n
Tiger Brands sells fruit business for R1 [2025]
\nNew era for Langeberg Foods after Tiger Brands exit [2025]<\/p>\n
The announcement comes shortly before the deciduous fruit harvesting season begins in November and producers have already incurred most of their annual production costs \u2013 pruning, fertilising, irrigating and controlling pests.<\/p>\n
Jordaan says between 200 and 220 producers supply the Tulbagh factory, many producing fruit varieties specifically bred for canning rather than the long-shelf-life varieties required for the fresh export market.<\/p>\n
Without the canning facility, producers will have to remove orchards and invest in alternative crops, as well as new packhouses and distribution infrastructure.<\/p>\n
The association says producers operate under rolling, long-term supply agreements that provide for a two-year notice period, allowing time to adapt if processing capacity changes.<\/p>\n
In a letter to producers dated 29 July, the company confirmed it would pay outstanding balancing payments (\u201cagterskotte\u201d) for fruit supplied during the 2025\/26 season at the end of October, in accordance with existing contracts.<\/p>\n
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The letter included projected final payments for apricots, peaches and pears while explaining that Premier had decided to exit the soft-fruit canning industry after deteriorating international market conditions.<\/p>\n
\u201cIt\u2019s not an honour to honour a contract. They have received the fruit, worked the fruit, and now they pay for it,\u201d Jordaan said.<\/p>\n
\u201cAt this stage there have been no commitments to the future seasons. Premier had commitments. It cannot just walk away from them.\u201d<\/p>\n
Industry under pressure<\/p>\n
Premier attributed its decision to global oversupply, higher United States tariffs, uncertainty surrounding the African Growth and Opportunity Act (Agoa), exchange-rate pressures, and consolidation within the canned fruit industry.<\/p>\n
Read:<\/p>\n
Trump\u2019s tariffs have gutted Agoa\u2019s duty\u2011free promise
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It points to the closure of one of the United States\u2019 two major fruit canning operations earlier this year.<\/p>\n
\u201cCanning fruit internationally is under pressure,\u201d Jordaan agreed. But, he argues, South Africa remains internationally recognised for the quality of its canned fruit and should be competing at the premium end of the market.<\/p>\n
The announcement has also prompted questions about why the company would close a facility that had recently benefitted from substantial investment.<\/p>\n
According to Jordaan, more than R200 million has been invested in the Tulbagh operation over the past three years, making it difficult for producers to understand why Premier now believes the plant has no viable future.<\/p>\n
\u201cIt feels like Premier just took over and now says they are going to exit,\u201d he said.<\/p>\n
Earlier this year, Premier completed its acquisition of the Rhodes Food Group, adding the Tulbagh processing operation to its portfolio.<\/p>\n
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Last year, Langeberg Foods took over the former Tiger Brands canning factory in Ashton. Premier says it intends to work with Langeberg Foods to process future harvests rather than continuing operations in Tulbagh.<\/p>\n
Jordaan says shifting all processing to Langeberg Foods cannot be achieved within a few months and would create significant commercial and financial risks.<\/p>\n
The first round of Section 189 consultations took place on Thursday.<\/p>\n
Job losses<\/p>\n
Congress of South African Trade Unions (Cosatu) Western Cape provincial secretary Malvern de Bruyn said organised labour refused to engage on retrenchments during the first meeting, insisting that discussions should focus on saving jobs instead.<\/p>\n
\u201cWhy throw in the towel right at the beginning?\u201d De Bruyn asked.<\/p>\n
\u201cOur position remains that we want a halt to the Section 189 process and look for a business rescue alternative \u2026 They were able to save the Ashton factory, why can\u2019t they do the same here?\u201d<\/p>\n
He said Cosatu was not directly involved in negotiations but played a role through its affiliate Southern African Clothing and Textile Workers\u2019 Union (Sactwu).<\/p>\n
\u201cOver 150 farms will be affected by this decision, so thousands more workers will be indirectly affected and could also lose their jobs. The farm owners will also suffer because of this inhumane decision,\u201d he said.<\/p>\n
\u201cWe are hopeful because we\u2019ve got 60 days in which to find an agreement.\u201d<\/p>\n
The Competition Commission is also scrutinising the proposed closure.<\/p>\n
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De Bruyn said the Section 189 consultation process should be suspended while the commission investigates whether the proposed retrenchments comply with public-interest conditions attached to Premier\u2019s acquisition of Rhodes Food Group, including undertakings relating to employment.<\/p>\n
Listen: Premier Foods investments pay off as profit climbs 31%<\/p>\n
He said similar retrenchments following mergers had occurred elsewhere, and he cited PepsiCo\u2019s acquisition of Pioneer Foods.<\/p>\n
In the coming days, Cosatu will consult with its national leadership on whether to seek an interdict to halt the retrenchment process.<\/p>\n
The commission did not respond to GroundUp\u2019s questions.<\/p>\n
The next round of Section 189 consultations is scheduled for 26 August. Labour must submit questions to the company by 14 August, with the company expected to respond by 21 August.<\/p>\n
For producers, however, time is running out.<\/p>\n
With the next harvest only months away, producers say they need certainty about who will process their fruit, whether existing contracts will be honoured beyond this season, and how South Africa\u2019s remaining canning capacity will absorb volumes previously handled by Tulbagh.<\/p>\n
\u00a9 2026 GroundUp. This article was first published\u00a0here.<\/p>\n
#SAs #fruit #canning #industry #threat #Premier #Foods #plans #closure<\/p>\n","protected":false},"excerpt":{"rendered":"
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