The Premier Group is offering Western Cape peach producers a settlement of R3,250 per tonne to end their supply agreements with the Tulbagh fruit-processing factory. This offer, communicated by the Premier Producer Committee, comes as the factory prepares to close its operations. Producers who accept the offer will receive payment by the end of October but will have to give up their contractual rights. The settlement applies to the contracted peach tonnage according to each producer’s delivery quota.
The closure of the Tulbagh cannery has left more than 200 producers with about 2,000 hectares of orchards facing uncertainty over where their fruit will be processed. The factory, which processed around 55,000 to 60,000 tonnes of fruit a year, bought about R300-million worth of produce from farmers. The Canning Fruit Producers’ Association, AgriSA, and Agri Western Cape have expressed concerns about the impact of the closure on the industry.
Charl Herbst, chair of the Canning Fruit Producers’ Association negotiations committee, described the offer as a voluntary commercial settlement. He noted that whether the offer is regarded as adequate or not will differ from producer to producer. Producers are currently evaluating the offer and taking advice before deciding how to respond. The Producer Committee has encouraged producers to obtain independent legal or commercial advice.
Premier acquired the Tulbagh facility earlier this year as part of its R6.5-billion acquisition of RFG Holdings. The company announced that it would not reopen the factory for the 2026/27 harvest, triggering Section 189 retrenchment proceedings involving 424 factory workers. The closure has raised questions about the future of producers who supply other types of fruit to the factory.
The company has attributed the decision to close the factory to a long-term decline in global demand for canned fruit and deteriorating export conditions. Premier has rejected claims that the closure is related to the acquisition of RFG. The Competition Commission is investigating the closure following a complaint concerning possible breaches of conditions attached to the acquisition.
Premier has announced plans to process some fruit into pulp and purée at its Groot Drakenstein facility. The company is also in discussions about the possible sale of the Tulbagh factory or the transfer of supply agreements to Langeberg Foods. This move aims to minimize the impact of the closure on the industry and its employees.
The offer made to peach farmers and the plans for the Tulbagh factory’s future have brought some clarity to the situation. However, the long-term effects of the closure on the industry and the economy remain to be seen. The situation will continue to be monitored as it develops.
Key points
- Premier offers peach producers R3,250 per tonne to settle supply agreements.
- The Tulbagh cannery closure affects over 200 producers with 2,000 hectares of orchards.
- The factory’s closure is attributed to declining global demand for canned fruit.
