By Cam Lucadou-Wells
A cash-strapped council-owned business Community Chef acted swiftly after the shutdown of its commercial rival I Cook Foods by health authorities, a Parliamentary inquiry heard.
Hours after the closure, Greater Dandenong chief executive and Community Chef director John Bennie addressed the Community Chef board on the “emerging issue”, according to Community Chef meeting minutes on 22 February 2019.
Community Chef then decided to reach out to “assist” I Cook Foods’ clients, including council Meals on Wheels services, hospitals and aged care centres.
At 4am that morning, Greater Dandenong Council officers had served a closure notice on I Cook.
Mr Bennie told the Parliamentary inquiry he briefed the board at the scheduled “strategic planning meeting” about 10.30am or 11am.
At that stage, I Cook’s closure was already in the “public domain” via an ABC broadcast, he said.
“I have a recollection that it was raised by officers of Community Chef that a news announcement had been made in relation to I Cook Foods.
He briefed the meeting because “I thought it was relevant in the context of all things we were talking about in the sector”.
“I thought it was then relevant and appropriate that I indicate what I understood about the situation.”
Community Chef Joe Ciccarone also told the inquiry that Mr Bennie briefed the board after the closure was “public knowledge”. He thought it was in the morning but was unsure of the time.
The briefing details were “no more … than what was public knowledge”, Mr Ciccarone said.
However, Liberal MP Wendy Lovell told Mr Ciccarone that this information “seems to be incorrect”.
She said that Mr Bennie briefed the meeting when it reconvened at 12.45pm but the news was only made public by The Age at 2pm – 30 minutes before Mr Sutton’s press conference.
“I’m not absolutely certain of those timelines,” Mr Ciccarone said.
“I have a vague recollection of the sequence of events … that’s all I can really offer.”
Inquiry members noted there was no mention in the meeting’s minutes of Mr Bennie’s conflict-of-interest.
Mr Bennie told the inquiry he had declared a “standing” conflict-of-interest due to being Greater Dandenong CEO.
Due to the conflict, he’d stood aside from the Community Chef board during the ongoing I Cook Foods dispute.
Mr Bennie told the inquiry that he’d been unable to sign I Cook Foods’ closure order due to his conflict. Instead, it was signed by Acting Chief Health Officer at the time, Brett Sutton, and served by the council’s officers.
“I knew that Community Chef’s agenda had extended beyond the provision of meals to councils and included the provision of meals to hospitals.
“I therefore knew the closure of I Cook Foods for any period would create a vacuum that Community Chef may fill.
“I therefore recognised I had a conflict of interest.”
Mr Ciccarone said nearly every council shareholder in Community Chef had a food manufacturer in its council area.
“By that logic every council would be conflicted and I don’t believe that’s the case.”
At the meeting on the day of the closure, Community Chef’s board decided to offer “assistance” to I Cook’s customers.
The arrangements were short-term, and only to ensure vulnerable customers to go without food, Mr Ciccarone said.
The business gained a “marginal” benefit from I Cook’s closure, he told the inquiry.
Out of I Cook’s former customers, only one council and an aged care home became an ongoing client, Mr Ciccarone said.
The Upper House inquiry is investigating I Cook Foods’ claims that it was wrongfully shutdown and linked to a listeria-related death of an elderly hospital patient.
Among the claims was that Greater Dandenong Council and the Department of Health and Human Services were motivated to close I Cook due to their financial ties to Community Chef.
The council and the department have justified their actions on the grounds of protecting the public from a potential listeria outbreak.
According to the board meeting minutes, Community Chef’s “tight” cash position was discussed on the same day of I Cook’s closure, along with the seeking of advance payments from councils.
The State Government’s possible buying into the business was also discussed.
“I wouldn’t say (Community Chef was under) financial difficulty … these were manageable matters,” Mr Bennie told the inquiry.
Declining meal numbers was putting “stress” on Community Chef at the time, he said.
Since I Cook’s closure, Western Health had offered to buy out Community Chef, the inquiry heard.
Mr Ciccarone declined to reveal the purchase price, nor to confirm it was a peppercorn price of $1 for each of the 17 council shares.
He cited “commercial-in-confidence”.
Mr Bennie told the inquiry that I Cook Foods was a competitor. But Mr Ciccarone didn’t agree, they were only offering “more choice in the marketplace”, he said.
He declined to discuss Community Chef’s broader food service strategy in the wake of I Cook Foods’ closure. The report was discussed in an April 2019 board meeting and was to be presented to the Health Minister.
The board also discussed Community Chef’s “transition strategy” at the same time. At the inquiry, Mr Ciccarone declined to elaborate due to “commercial in confidence”.
