I said SPC was sound: Abbott

Prime Minister Tony Abbott says he always believed SPC Ardmona was a sound business, after the once-struggling food processor signed a new $70 million deal with supermarket giant Woolworths.

SPC on Tuesday announced the massive contract to supply 24,000 extra tonnes of tomato, fruit and beans to Woolies, in a major boost to the company recently refused $25 million in federal government assistance.

Asked if the deal vindicated the decision not to bail out the food processor, Mr Abbott pointed out that its parent company Coca-Cola Amatil was a highly profitable business.

"I always said that this was a fundamentally sound business," he told Macquarie Radio in Perth.

The important thing was not to bail out the Victorian cannery, Mr Abbott said.

"Only the management and staff of the particular business can save the business, and it looks like they've done exactly that," he said.