Wilmar a 'Trojan horse': LNP

In April, the Singaporean-based company announced it would set up its own commercial model and exit the current industry-owned Queensland Sugar Limited (QSL) agreements by 2017.

Four LNP federal MPs - George Christensen, Michelle Landry, Keith Pitt and Ken O'Dowd - as well as Queensland Senators Barry O’Sullivan and Ron Boswell have written an open letter to Wilmar Sugar calling for a "transparent, industry-owned ‘single desk’ selling system to be maintained".

Senator O’Sullivan said there was collective concern that Wilmar’s proposal went against the interests of growers as well as the broader national interest.

Close to 50 per cent of Australia’s sugar cane for export is crushed by Wilmar, following the acquisition of Sucrogen’s seven mills in 2010 and the Proserpine mill in 2011.

The Singaporean-based business is part owned by US farm commodity giant Archer Daniels Midland, with which it has many processing relationships.

Wilmar’s decision to remove 2 million tonnes from the industry’s collective annual pool will have significant impacts on the raw sugar export chain. The move could also affect growers’ bottom line, putting at risk a deal which has been in place for more than a century, where growers received two-thirds of the profits sold through QSL’s single deregulated desk.

Queensland Agriculture Minister John McVeigh has written a letter of complaint to the Australian Competition and Consumer Commission (ACCC), and has also written to Singapore-based Wilmar chairman Kuok Khoon Hong encouraging the company to reconsider.

“It is essential that the interests of all Queensland cane farmers and sugar millers are considered for the long-term prosperity of our great sugar industry,” Mr McVeigh said.

“The current approach of marketing through QSL allows for the benefits of economies of scale to be enjoyed by all industry participants, regardless of how large or small the enterprise.

“A reduction in QSL’s tonnage will diminish the choice of pricing pools available to smaller mills and growers. I am concerned this will dilute returns to ongoing members of QSL and our cane farmers.”

Michael Pisano operates 95 hectares between two cane farms, in the Brae Meadows region.

He supplies his cane to the Herbert River mill, which is owned by Wilmar Sugar.

“Herbert River is an exclusive Wilmar milling region but we took some comfort in the fact that we had QSL doing the marketing,” Mr Pisano said.

“It is very important that I have a company that I can trust to market my sugar for me, a company that is transparent and answerable to the industry.

“I’m very upset about the decision Wilmar has imposed on growers and that we have not been given any choice in the matter.”

Mr Pisano said at present mills have the ability to market their economic interests, which was one third of the value of sugar.

He questioned why Wilmar would go out of their way to set up a multi-million dollar company to take the remaining two-thirds, which was the grower economic interest.

Senator O’Sullivan said Wilmar’s decision would “instantly undermine a century of gains and prosperity for thousands of family-owned sugarcane farms.”

“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,” he said.

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

Senator O’Sullivan said Wilmar was a "Trojan horse" – initially claiming it would work collaboratively with growers before announcing its plans to ransack the canegrowing sector.

His concerns were echoed by Senator Ron Boswell, who said the proposal would change the landscape of the Australian sugar industry.

“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,” Senator Boswell said.