Cadbury has withdrawn its application for $16m in federal funding, saying it could not meet the grant criteria.
During the 2013 election campaign then opposition leader Tony Abbott pledged $16m of commonwealth money to the multinational confectionery giant to upgrade its Claremont factory in Hobart and restart tours of the facility.
Abbott said at the time that the stimulus would create jobs.
“I accept that it’s quite unusual for a national government to make direct grants to a commercial operation but Tasmania, I put it to you, is a special case,” he said.
The company that runs the factory, Mondelez International, said it had been working with the government to build a business case for the visitors’ centre, but was rejecting the cash because the requirements were too onerous.
“Specifically, what we couldn’t satisfy was the requirement that we were required to significantly increase production here in our plant in Claremont, which was dependent on us accessing substantial new export orders,” the managing director of Australian and New Zealand operations Amanda Banfield said on Thursday.
During the election campaign, Abbott signalled that the grant came with expectations that chocolate production would increase and a trial of cocoa farming would be undertaken.
“We’ve been working with the government in the last 18 months to build that business case,” Banfield said. “The grant criteria required us to grow production by 20% ... but today we don’t have that kind of volume increase available to us from confirmed export orders.”
“I can say that both we and the government entered into this process in absolute good faith,” Banfield said. “The criteria turned out to be unachievable as we’ve gone through the process together.”
Labor said the offer of funding was a promise from the government made without any “hard policy detail” or commitment follow-through.
“This was a vote-buying exercise where they handed over the cheque to Tasmanians and today Tasmanians have found out that they have cancelled the cheque,” the opposition spokesperson for tourism Anthony Albanese said on Thursday.
“We were never in favour of the Cadbury grant because there was no business case put forward,” he said.
Independent MP Andrew Wilkie, who holds the marginal seat of Denison where the factory operates, said he was bitterly disappointment by Mondelez’s announcement.
“In the first instance this is strictly a commercial decision by the company. But relevant is that Cadbury judged the government’s funding criteria too onerous, which does call into question the government’s interest in progressing this matter,” Wilkie said.
“This money was a Liberal party election promise as much to do with providing an economic stimulus for the local economy as it was a grant for a particular business. The federal government must deliver on that promise and immediately commit to provide that $16m for appropriate economic stimulus projects in the Denison electorate,” he said.
Banfield said no jobs would be lost as a result of the decision, but that no new jobs would be created either.
“Tasmania has been let down badly by Tony Abbott,” the state opposition leader, Bryan Green, said. “He’s let the opportunity to create a world class tourism opportunity slip through his fingers. The Liberals promised huge job creation would flow from the investment in Cadbury and it’s amounted to absolutely nothing.”
Mondelez will continue with plans to upgrade the factory, but will only put in $20m instead of the promised $50m.
