Modern Slavery Statement

Patties Food Group, F24 Modern Slavery Statement

Vision: Wemakethefoodyoulove!

Values:Trust, Ownership, Courage, Integrity

Message from our Chief Executive Officer

I am pleased to publish this joint Modern Slavery Statement for the 2024 financial year (Reporting Period), which outlines the steps the Patties Food Group (Patties) has taken to identify, manage, and mitigate the risks of modern slavery in its operations and supply chain.

We have made further progress this year to mitigate the risk of modern slavery in our operations, including:

External audits of our two largest facilities to the SMETA 7 standard, confirming no unethical labour practices within our own workforce, and receiving positive feedback on our policies, systems and processes;

Updating and re-issuing our Ethical Sourcing Policy to our suppliers, using a new technology platform to better track compliance;

Developing an internal process for escalating ethical concerns within our supply chain to the executive leadership team;

Physical inspections of international supplier facilities by our vendor assurance and procurement teams.

Patties remains committed to a journey of continuous improvement to eliminate modern slavery in the global economy, and working with our suppliers and customers towards this common goal.

 

Paul Hitchcock

Chief Executive Officer and Director

Piranha Holdco Pty Ltd, ACN 662 228 373 (Holding Company of the Patties Food Group)

Patties Foods Pty Ltd, ACN 007 157 182 (Australian trading entity)

Reporting entities

The entity submitting this statement is Piranha Holdco Pty Ltd (ACN 662228373), c/o PAG Private Equity, ‘02’ SE 22 L 22 60 Martin Place Sydney, NSW, 2000. Piranha Holdco Pty Ltd is the holding company and principal governing body of the Patties Food Group, comprising the entities listed in the table below. Each entity is governed by the same management team and corporate policies:

Australian entities (together, the ‘Reporting Entity’)

Patties Foods Pty Limited (main trading entity)

Piranha MidCo Pty Ltd

Piranha BidCo Pty Ltd

Australasian Foods Holdco Pty Limited

Australasian Foods Finco Pty Limited

Australasian Foods Bidco Pty Limited

Patties Foods Australasia Pty Ltd

Herbert Adams Pty Ltd

Louis & Marie Pty Ltd

Piper Partners Proprietary Limited

Boscastle Pastries and Foods Pty. Ltd.

Australasian Chilled Foods Bidco Pty Limited

Australasian Chilled Foods Finco Pty Limited

Patties Foods Employees Pty Ltd

AWF (Asset Services) Pty Ltd

AWF (AS1) Pty Ltd

Australian Wholefoods Pty Ltd

AWF (Direct) Pty Ltd

Alaska Foods Pty Ltd

Heat to Eat Holdings Pty Ltd

Heat to Eat Pty Ltd

Vesco Foods Holdings Pty Ltd

  1. Patties Foods Meals Pty Ltd

  1. Cook Freeze Pty Ltd

New Zealand entities (non-reporting entities)

Australasian Foods HoldCo NZ Limited

Australasian Foods TopCo NZ Limited

Food Partners Limited

Patties Foods New Zealand Limited

Leader Products Limited

Southern Pacific Epicurean Limited

USA entity (non-reporting entity)

Patties Foods USA (LLC)

(Appendix A – Corporate Structure Chart.)

Patties Food Group - Structure and Operations

Patties is a food manufacturer, comprising a portfolio of iconic Australian and New Zealand snacking and ready meal brands such as Four ‘n Twenty, Herbert Adams, Nannas, Super Nature, On the Menu, Fitness Outcomes and Ruffie Rustic Foods. Patties is a trusted manufacturing partner of all major Australian based retailers, as well as Lean Cuisine, Weight Watchers and Annabel Karmel ready meals, and Leggos pasta and sauces. Patties has longstanding customer relationships in the retail, petrol and convenience, food service, and QSR channels, and a growing export business to the United States and Asian markets.

By the end of the Reporting Period, the group had six manufacturing facilities across Australia and New Zealand.

While the Head Office of the holding company is located in Sydney, Australia, the head office of the main operating and trading entity – Patties Foods Pty Ltd - is located in Melbourne, Australia.

Patties currently has over 1,700 employees across its business operations in Australia, New Zealand, and the USA. Production workers at each of the five Australian factories are employed and paid in accordance with site-specific Enterprise Agreements, four of which were renewed during the Reporting Period to ensure our workers are paid a living wage and well above Australian Award rates.

Patties’ annual consolidated revenue for the Reporting Period was over $100 million AUD.

Patties Food Group - Supply Chain

Patties’ operations are supported by a large supply chain which, along with the business, has significantly grown and diversified in recent years.

During the Reporting Period, goods and services were sourced from over 1,000 different supplier, and Patties’ raw material and packaging supply base alone spans over 36 different countries. (Appendix B – Country of Origin table.)

Patties Raw Ingredients and Packaging Supply Chain Map

Notwithstanding the wide geographical reach of our supply chain, the main raw material procured for our Australian operations, and largest raw material spend, is beef. Patties only buys 100% Australian beef, and proudly supports local primary producers as one of the largest non-retail buyers of Australian red meat.

All flour, sugar, oats, poultry, eggs, lamb, dairy, cheese, fresh fruit & vegetables and pasta is also sourced directly from Australian primary producers or manufacturers.

Australian operations are further supported by many indirect suppliers, including cleaning and security services, transport and logistics providers, warehouses, waste disposal companies, and professional and operating services such as advertising and accountancy. Other than IT consultants, these are all Australian or New Zealand based.

4Consultation Process

Representatives of all Patties trading entities (noting the main trading entity for the group is Patties Foods Pty Ltd), and other key stakeholders such as the Board of Directors, CEO, CFO Head of Quality and Vendor Assurance, and Procurement Managers have been consulted throughout the year regarding Patties’ progress against its modern slavery strategy and targets, and in preparing this statement.

Modern Slavery governance

Strategy

Patties’ strategic approach to modern slavery is captured within the Ethical Supply Chain pillar of the corporate ESG strategy:

5.2Targets

We have set specific targets pertaining to modern slavery:

100% return rate of our Ethical Sourcing Policy from threshold suppliers[1];

All ingredient suppliers with >$500K p.a. spend risk assessed via SEDEX buyer membership + vendor assurance team; and

Biennial SMETA audits of our manufacturing sites.

A cross functional team comprising representatives of the group’s Legal, Quality, and Procurement departments oversees the implementation and monitoring of the strategy, and progress against targets.

Contractual Obligations and Policies

Patties sets out its expectation that all employees and suppliers be committed to identifying and eliminating modern slavery in its:

Employee Code of Conduct;

New Supplier pre-qualification questionnaire;

Standard supplier terms and conditions; and

Ethical Sourcing Policy.

All threshold suppliers must agree to Patties’ Ethical Sourcing Policy by returning a signed copy, or alternatively provide equivalent assurance such as access to their SEDEX self-assessment and audit information. In returning a signed copy of Patties’ Ethical Sourcing policy, our suppliers provide a formal undertaking to:

take all reasonable measures to ensure that workers in their own supply chains are treated lawfully and are not victims of any form of modern slavery;

maintain oversight of employment conditions of any labour hire and sub-contracted labour; and

not use unauthorised sub-contractors; and

require any specific facility supplying good to Patties to comply with Patties’ human rights and modern slavery standards, if the supplier is a broker.

Risk of modern slavery in Patties’ operations and supply chains

Risk Assessment and Due Diligence

Patties employs a comprehensive due diligence approach to identify and assess the risks of modern slavery within its operations and supply chain. During the Reporting Period, our risk assessment process included the following key activities:

SEDEX Membership Obligation: Imposing a new requirement in our Ethical Sourcing Policy that key ingredient and packaging suppliers (defined as those with annual spend over $500K AUD) connect with Patties on the SEDEX platform. This enabled our team to review linked suppliers’ labour data and risk ratings, utilise Sedex’s comprehensive supply chain risk assessment and analysis tool to generate a ’radar’ report covering all linked suppliers. and monitor non-conformances;

Geographical and Industry Risk Analysis: Cross functional analysis of known geographical and industry related risks for modern slavery in Patties’ supply chain, by reference to SEDEX data and reputable third sector publications such as the Global Slavery Index.

Policy Compliance Monitoring: Annual review of the return rate of signed copies of our Ethical Sourcing Policy from threshold suppliers, ensuring alignment with our standards; and

Supplier Audits: Virtual audits of current and prospective international suppliers, and physical inspections of the farms and facilities of key ingredient and packaging suppliers based in China.

Risk Assessment Findings – Executive Summary

We are pleased to report that Patties’ Australian operations procured no key goods or services from any of the ten countries with the highest rated prevalence of modern slavery[2].

Furthermore, Patties assessed the risk of modern slavery within its own labour force to be very low, given:

all Patties’ manufacturing employees based at our facilities are now employed under bespoke Enterprise Agreements approved by Fair Work Australia, four of which were renewed during the Reporting Period to ensure our workers are paid a living wage well above Australian minimum rates of pay; and

the positive SMETA 7 audit results for our two largest facilities.

However, of the suppliers linked with us on SEDEX, several suppliers to our Australian operations suppliers were identified with a ‘high’ risk rating in the Forced Labour index. We are closely monitoring the non-conformances that resulted in these risk ratings, noting that high risk ratings usually decrease once non-conformances are closed out, and will take further action as necessary in accordance with our newly developed internal escalation process, including discontinuation of business if risk remains unacceptably high.

Risk Assessment Findings - Raw Materials (Ingredients)

Overall, Patties is satisfied that most key raw material suppliers from which we procured ingredients during the Reporting Period posed low modern slavery risk. While we acknowledge there is inherent and unknown modern slavery risk in agricultural industries, and several suppliers were flagged as high risk on the SEDEX platform, the suppliers Patties works with are largely Australian based, or large international businesses, which have been scrutinised by Patties’ internal vendor assurance team, and for the most part of their own governance and compliance controls and commitment to understanding and addressing their risk.

We are now linked with >80% of our meat suppliers, which comprise almost 50% of our raw material spend, on SEDEX. Accordingly, we have better oversight of these suppliers’ labour indicators risk ratings than in previous reporting periods.

Likewise, we are now SEDEX linked with most of our flour, fats and oils, and poultry suppliers, and identified no major risks[3]. We did not source seafood from any high-risk countries in the fishing industry, and received signed copies of our Ethical Sourcing Policy from 100% of our seafood suppliers.

Some areas of higher vulnerability, based on geographical risk, were identified regarding ingredients used in Patties’ ready meal products. For example, small amounts of raw materials and packaging are sourced from Turkey – which has been identified as a ‘top 10’ country for modern slavery risk, particularly in agricultural industries, as well as from Pakistan, India, the Philippines, Guatemala, Mexico and Peru all of which are known higher risk areas according to current Global Slavery Index data.

Additionally, dairy continued to be identified as an area of relative unknown risk, due to the fact that our two key suppliers are not yet SEDEX members. This prevents Patties from being unable to conduct a comprehensive risk assessment. However, given all dairy is sourced domestically where workers tend to be unionised and employed under Australian enterprise agreements – we assessed the likely risk to be relatively low.

Risk Assessment Findings – Packaging

As a food manufacturer of an increasingly diverse range of products, Patties’ supply chain inevitably includes large amounts of various types of packaging, with virgin materials sourced from multiple countries which have various levels of modern slavery risk.

Overall, Patties is satisfied that of our current packaging suppliers posed low modern slavery risk. During the Reporting Period, Patties physically inspected the facilities of our largest Chinese packaging suppliers, and did not identify any significant risks. Additionally, over 90% of our key packaging suppliers returned a signed copy of our updated Ethical Sourcing Policy, which contains modern slavery obligations as well as environmental obligations regarding sustainable packaging and Responsible Sourcing of Palm Oil.

Risk Assessment Findings – Indirect Suppliers

Patties continued to assess the risk of modern slavery in the supply chains of its transport and logistics companies, which account for the majority of the group’s indirect supplier spend and requirements, to be low. Furthermore, during the Reporting Period we ran a tender process for transport and logistics service providers, during which successful appointees were required to contractually agree to our ethical sourcing expectations via a new clause we added to our transport services contract. Confidence in the Australian transport and logistics industry, which was already heavily unionised to protect workers, continues to be bolstered by Chain of Responsibly legislation and technological developments, such as GPS tracking, which have improved worker safety.

As in previous reporting periods, we acknowledge there is possible modern slavery risk within the supply chains of our professional services providers, as identified in their own modern slavery reports due to offshore outsourcing of business support. Similarly, it is acknowledged there is possible risk of modern slavery associated with IT suppliers, due to inherent risk in the production of technological hardware, and the prevalence of outsourcing and sub-contracting in the IT industry.

During the Reporting Period Patties moved towards one main cleaning chemicals provider across the business, however, it is acknowledged the cleaning industry generally is a potential risk industry for unethical labour practices. During the next Reporting Period we plan to investigate moving to one cleaning provider across all Australian facilities, to ensure better oversight of compliance with our ethical sourcing requirements.

Actions taken to assess and address modern slavery risk

Actions

During the Reporting Period, Patties took the following actions to specifically mitigate the risk of modern slavery in its supply chain and to generally gain better oversight over our supply chain:

As stated earlier in this report, we updated our Ethical Sourcing Policy, including a new requirement that any raw material or packaging supplier with annual spend over $500K AUD connect with Patties on the SEDEX platform. This enabled us to review each linked supplier’s labour data and risk ratings, access ‘Radar’ reports and monitor for non-conformances;

Formalised an internal escalation process to provide our executive leadership team with better oversight over high-risk suppliers, and address concerns regarding non-compliance of our ethical sourcing policy, including discontinuation of the supplier relationship if necessary.

Directly followed up with suppliers which had high risk labour findings on SEDEX, to understand actions and timescales to address their non-conformances;

Physically inspected multiple Chinese facilities (existing and prospective) with a Chinese speaking member of procurement team;

Make significant progress towards the transition of all signed Ethical Sourcing Policies onto a newcompliance system. By the conclusion of the Reporting Period over 70% of our threshold suppliers have returned a signed copy of Patties’ updated policy.

Remediation

As outlined above, Patties has formalised its escalation process during the Reporting Period, which includes remediation. Furthermore, Patties’ Corporate Whistleblowing policy, available publicly via the corporate website, creates a grievance mechanism for stakeholders to raise concerns about unlawful practices in the Patties’ supply chain, and trigger an investigation process.

The summary poster of the Whistleblowing Policy, on display at all Australian facilities, cites modern slavery concerns as a specific example of the sort of complaint that could be brought under this policy.

Patties’ remediation program principally involves direct follow up with senior representatives of our suppliers, where high risk ratings are identified. Patties’ approach is to work with these suppliers in the first instance, in the spirit of continuous improvement.

Patties will, however, reassess its supply arrangements with suppliers identified as high risk in the next reporting period, if no improvements are evidenced.

Our Effectiveness in Combating Modern Slavery

Modern slavery remains a challenging risk to manage within the global supply chain environment in which we operate. We recognize the inherent risks in the food manufacturing industry and acknowledge that our risk assessment and due diligence approach is limited to our ability to connect with suppliers on Sedex or inspect their facilities.

Despite these challenges, we have made significant progress during this Reporting Period by:

Increasing our level of assurance for both our workforce and that of our suppliers through Sedex audits of our sites and linking with an increased number of suppliers on the Sedex platform.

Updating and formalising our policies and processes to address modern slavery risks, such as developing an internal policy to escalate breaches of our ethical sourcing policy.

Utilising technology to monitor our KPIs, including transitioning ethical sourcing policy compliance to a new online system.

It is also evident that our teams, suppliers, and customers are increasingly engaged in the common goal of abolishing modern slavery.

Further Steps

Following our review of the effectiveness of actions taken during the Reporting Period, Patties will prioritise the following actions in the next Reporting Period:

Conduct an additional trip to China in January 2025 to physically inspect ten current and prospective raw materials and packaging suppliers.

Continue leveraging Sedex as an evaluation tool for ingredient and packaging supplier risk, as Sedex reports provide reliable data through a combination of third-party audits and inherent supplier risk.

Ensure 100% of threshold suppliers return a signed copy of our Revised Ethical Sourcing Policy.

Ensure 100% of suppliers with spend over $500K are linked with us on Sedex.

This modern slavery statement is made by the Patties Food Group for the financialyear ending 30 June 2024.

This statement was approved by the board of directors of Piranha Holdco Pty Ltd, being the principal governing body of the Patties Food Group, on 18 December 2024.

This statement is prepared in accordance with the requirements of section 14 of the Modern Slavery Act 2018 (Cth).

This statement is signed by an authorised representative of the board of directors of Piranha Holdco Pty Ltd:

...............................................................................................................

Paul Hitchcock, Chief Executive Officer and Director, Piranha Holdco Pty Ltd and all related companies.

Date: ……………………………

Appendix A – Patties Food Group Corporate Structure Chart

Appendix B – Country of Origin Table, PATTIES Raw Materials and Packaging F24

  1. AUSTRALIA: Beef, Flour, Poultry, Eggs, Lamb, Dairy, Cheese, Processed Meats, Fresh Fruit & Vegetables, Sugar, Salt, Oats, Pasta, Vegetable Protein, Packaging (cartons, foil & film, plastic tray).

  1. BELGIUM: Finished Goods Vegetables

  1. BRAZIL: Herbs and Spices, Starches

  1. CANADA: Cured Meats

  1. CHILE: Packaging (primary board), Frozen Berries.

  1. CHINA: Frozen Vegetables, Mixed Herbs, Starches, Packaging (foil trays, plastics & film), Noodles

  1. DENMARK: Cured Meats

  1. EGYPT: Herbs and Spices

  1. FRANCE: Herbs

  1. GERMANY: Starches, Packaging (film)

  1. GUATEMALA: Herbs and Spices

  1. INDIA: Rice, Vegetable Protein, Herbs & Spices

  1. INDONESIA: Herbs and Spices, Seafood

  1. ISRAEL: Packaging (plastic trays)

  1. ITALY: Apples, Rice, (Chickpea) Pasta

  1. KOREA (Packaging)

  1. MALAYSIA: Fats and Oils (Palm Oil), Packaging (grey board, plastic tub & lid)

  1. MEXICO: Herbs and Spices

  1. MOROCCO: Herbs and Spices

  1. NETHERLANDS: Starches, Herbs & Spices

  1. NEW ZEALAND: Frozen & Ambient Fruits & Vegetables

  1. NORWAY: Seafood

  1. PAKISTAN: Dried Fruits

  1. PERU: Quinoa

  1. PHILLIPINES: Fruits, Packaging

  1. POLAND: Herbs and Spices, IQF Vegetables

  1. PORTUGAL: Herbs and Spices

  1. SERBIA: Herbs and Spices

  1. SINGAPORE: Dry Blends

  1. SPAIN: Herbs and Spices, Packaging (film)

  1. SRI LANKA: Herbs and Spices

  1. THAILAND: Rice

  1. TURKEY: Dry Herbs and Spices, Lentils, Packaging (film)

  1. UK: Packaging

  1. USA: Packaging, Herbs & Spices

  1. VIETNAM: Seafood, Herbs & Spices, Noodles

[1] Defined as any raw material or packaging supplier, or any indirect supplier which does more than $100K p.a. business with Patties.

[2] Source, 2023 Global Slavery Index. (North Korea, Eritrea, Mauritania, Saudi Arabia, Turkey, Tajikistan, United Arab Emirates, Russia, Afghanistan, and Kuwait.)

[3]Noting that a number of these suppliers are new to SEDEX and as such have not been subject to external SMETA audits yet.