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Australia’s third-largest poppy producer, TPI Industries, has announced it is shifting its manufacturing base from Tasmania to Victoria, the latest blow to Tasmania’s four-decade dominance of the country’s $120m opium poppy industry.
The closure of TPI’s processing plant at Cressy, south-west of Launceston, will cost the small town about 55 jobs.
The island state currently grows almost 50% of the world’s pharmaceutical opium poppy supply, but the first commercial growing licences in Victoria were granted to TPI in August, and the company’s first crop has already been planted at sites in the state’s north.
Tasmania’s 43-year Australian monopoly on the narcotic crop was broken in September when the federal health minister, Peter Dutton, signalled a revision to a 1971 treaty restricting poppy growing to the state for security reasons.
The change came after sustained lobbying from the pharmaceutical industry, struggling to meet a worldwide demand for painkillers that tripled between 1993 and 2012, according to the UN.
TPI’s chief executive, Jarrod Ritchie, said the move to Victoria “wasn’t a decision we made lightly, but the reality was that Victorian policy allowed us to have alternative sources of supply”.
Unlike Tasmania’s, Victoria’s poppy-growing regime allows companies to import poppy straw – which contains sap rich in morphine, thebaine and codeine – from overseas and have it processed in the state.
TPI aims to expand its growing to Portugal, a supply it would have been prohibited from processing in its factories on the Apple Isle.
“It put us in an untenable position, that one of our local competitors, GlaxoSmithKline, had many sources of supply,” Ritchie said.
TPI will continue growing in Tasmania and Ritchie said the state “will continue to be part of our future”.
He said he negotiated with the Tasmanian government to lift the ban on importing overseas straw, but “governments and business don’t always see eye to eye”.
Tasmanian Alkaloids is the last grower with manufacturing facilities in the state. Managing director Doug Blackaby said the company had just invested $21m in its processing plant and had no plans to shift to the mainland, nor grow overseas.
Only a handful of countries, including Australia, Spain, Portugal and India, are permitted by the UN to grow poppies, which produce the primary ingredients of a host of pain-relieving medicines – as well as heroin.
A 500-hectare (1,200-acre) commercial trial of the crop is currently under way in the Northern Territory.
Keith Rice, the chief executive of the Tasmanian poppy growers’ association, said he backed the state government’s continuing ban on importing foreign poppy straw.
“For four decades we’ve been the world’s leader grower of pharmaceutical pain-management material, and next year if we’re having to import from overseas, that casts serious doubt over our reputation as a reliable supplier and the most secure supplier,” he said.
The Tasmanian primary industries minister, Jeremy Rockliff, could not be reached for comment.
