Modern Slavery Statement

LAST UPDATED: 28 JUNE 2024

This statement is made pursuant to the Modern Slavery Act 2018 (Cth) (the Act) and relates to the reporting period of 1 January 2023 to 31 December 2023. This statement sets out the steps that Frucor Suntory has taken and is continuing to take to seek to ensure that modern slavery is not taking place within our operations or our supply chains.

Criteria 1 and 2 (s16(1)(a),(b)): Our business, structure, operations and supply chains

Suntory Holdings is the parent company in our corporate structure, which is a non-listed holdings company. It owns 59.48% of Suntory Beverage and Food Limited (SBF), which is a company incorporated in Japan and listed in the first section of the Tokyo Stock Exchange. Suntory Holdings and SBF together with their subsidiaries produce and distribute various popular brands of beverages. SBF has 100% ownership of both Frucor Suntory New Zealand Limited (Frucor NZ) and Frucor Suntory Australia Pty Limited ABN 73 060 091 536 (Frucor AU) (together, the Frucor Group).

Frucor NZ manufactures products which are acquired by Frucor AU. Frucor AU carries on the entirety of the business in Australia, including contracting, property management and all other operations. Frucor AU and Frucor NZ share management and employees but otherwise Frucor NZ does not carry on business in Australia. Certain expertise or roles will be based in either Australia or New Zealand, and employees may travel between the two jurisdictions regularly. Frucor AU is the reporting entity for the purpose of this statement under section 13 of the Act.

Frucor AU has 304 permanent employees, no casual employees and 2 independent contractors. In the reporting period Frucor AU also utilised 30 temporary workers via employment agencies, as well as 22 temporary workers in production and 35 workers in the Information and Technology space. Frucor AU in the reporting period had one employee who was working in an arrangement where their visa was tied to their employment. Frucor AU does not own or control any other entities. Frucor AU does not have any investment holdings. Frucor AU’s operations take place in Australia and New Zealand.

Frucor AU manufactures and distributes non-alcoholic beverages. Frucor AU’s key brands are V Energy, Boss Coffee, Maximus, Rockstar and Lucozade Energy. Customers include local wholesalers and consumers. We also manufacture and distribute a range of third-party drinks including Pepsi, Gatorade and Rockstar.

Frucor AU’s products are primarily manufactured by Frucor NZ at our Wiri site in Manukau, Auckland, New Zealand. Around 90% of our manufacturing is made at these in-house facilities. For the remaining 10% we work with third parties who produce a quantity of our products in Australia and New Zealand. Our products are distributed through a mix of internally operated and outsourced models which vary by country/channel.

Frucor AU sources materials from various regions around the world and acknowledges that many different people are impacted by what we do. We have a range of relationships with our suppliers depending on spend and the risk profile. Contract duration can vary from one to five years. We have collated a list of all the suppliers in tier 1 of our supply chain i.e. all suppliers that Frucor AU directly contracted with in 2023. There is a total of 302 suppliers in this list providing a range of goods and services including: ingredients and raw materials (such as juices, concentrates, fruits); waste services; uniforms; merchandise; glass and packaging; security services; cleaning and maintenance services; transport/freight/port and logistics goods and services; warehouse and storage services; stationery; food and catering; telecommunications; postage and courier services; engineering, accounting, legal and consultancy services; recruitment agencies; human resources services; manufacturing services; information and technology goods and services; and sales, research and marketing. We have calculated that 98.34% of our suppliers are based in Australia or New Zealand with the remainder being located in the United States, Germany, Spain and Singapore.

Criteria 3 (s16(1)(c)): The Risks of Modern Slavery

Frucor AU acknowledges that every entity has modern slavery risks in its operations and supply chains. We are aware of the risks of modern slavery within the beverage industry, and we are committed to implementing and enforcing effective systems and controls to ensure that it is not taking place anywhere in our own business or in any of our supply chains. We are in the process of continually building the knowledge base that we have as to where our own risks may lie, so that we can better assess and address those risks.

Frucor AU products are primarily manufactured in New Zealand which is a low-risk geographic location and as per the 2023 Global Slavery Index data, has among the strongest responses to modern slavery in the Asia Pacific region. We note that New Zealand is currently in the process of drafting legislation to further strengthen its approach to modern slavery. We also work with third parties who produce a quantity of our products in Australia and New Zealand and we acknowledge that this reduces our oversight to a degree, heightening the risks of modern slavery. Transport of our products occurs partially through internally operated models which is relatively low risk, but also through outsourced models depending on the country/channel which we understand heightens the risk of modern slavery.

We are confident that procurement of our beverages from Frucor NZ itself is very low risk, however we understand that Frucor NZ has its own suppliers whose products and services contribute to the creation of those beverages, which are also part of Frucor AU’s supply chain (beyond tier 1). We are still in the process of investigating beyond tier 1 of our supply chain and properly understanding any risks posed further along, together with how such risks can best be avoided or otherwise managed.

Only 1.65% of our supply chain is based outside of Australia or New Zealand which we consider to be a factor that reduces the risks of modern slavery occurring in our supply chain. Of the suppliers that make up the 1.65%, one is based in Germany which has an even lower prevalence rating for modern slavery than Australia and New Zealand; and another is Beam Suntory which is based in Spain and is in the Suntory Holdings Corporate structure which means we have greater oversight of the steps this entity is taking to assess and address modern slavery risks. The remainder of the 1.65% of suppliers are located in the United States and Singapore, which have a relatively low prevalence of modern slavery according to the Global Slavery Index. We note compared to previous reporting periods our presence in higher risk geographic locations has reduced.

Goods and Services that we are aware of as constituting higher risks that are inherent in the industries / products that we operate with (i.e., by reference to the known global risks, generally), include raw materials, packaging, uniforms, merchandise, security services, cleaning/maintenance services, stationery, food/catering, recruitment agencies and information and technology goods and services.

We have also carefully considered the more indirect ways in which we may contribute or become linked to modern slavery in our operations and supply chains.

We utilise many raw materials in our operations. The price of raw materials can be affected by weather patterns, crop failures, epidemics, strikes, manufacturing problems, transportation issues and other events that are difficult to predict. These events can create undue cost, performance and time pressures on our suppliers. We acknowledge that the presence of these pressures can increase the risk of modern slavery occurring. We acknowledge that for these reasons and in accordance with the existing research, raw materials are a high-risk product in regard to modern slavery and that the Frucor Group’s use of these materials may mean that we are linked to modern slavery through the activities of our suppliers. We source the majority of our raw materials from New Zealand or Australia which are both countries that have a low risk and prevalence of modern slavery.

The beverage and food industries are also highly susceptible to changes in consumer preferences. This means the Frucor Group at times must be reactive and nimble when it comes to changing appeal. This may require rapid response through the introduction of new products, reduction of prices or increasing promotional activities rapidly. Once again, these activities place both performance and cost pressures on our operations and supply chains, providing an environment where modern slavery may be more likely to prosper. We consider that there is a risk that the Frucor Group may inadvertently contribute to modern slavery practises by placing pressures on our suppliers that may facilitate or incentivise modern slavery.

Being a beverage and food manufacturer, the safety of our products is crucial, and we are subject to stringent regulations and laws that must be complied with. This again can place inflexible time and performance pressures on our operations and supply chains. We realise that if these pressures are not appropriately managed, they may manifest in poor practices and therefore pose a risk that the Frucor Group may contribute to modern slavery practises. For this reason, we also have our own strict standards and controls in our operations.

The Frucor Group understands that whilst the COVID-19 pandemic is no longer a global health emergency, the effects of it on society and business around the world linger. We are aware that factory shut down, repeated business closures, wavering demand from customers and cancellations of agreements and orders placed unprecedented, unanticipated pressures on businesses. We understand that the trickledown effect of businesses suffering is the increase in the vulnerability of the workers in those businesses. We are aware that in desperate times some businesses may negligently or intentionally forgo any focus on upholding workers’ human rights. As such, we understand modern slavery risks in all forms continue to be heightened as a result of the ongoing impact of the pandemic and are mindful of this.

The Frucor Group endeavours to continue to build our knowledge base in relation to the risks of modern slavery in our operations and supply chain. We see great utility in identifying these risks as doing so allows us to more accurately build and strengthen our approach to modern slavery.

Criteria 4 (s16(1)(d)): Actions Taken

Frucor AU is committed to helping lead positive change in the Australian beverage market. Frucor AU is committed to ensuring that there is transparency in our own business and in our approach to tackling modern slavery throughout our operations and supply chains. We have taken the following steps with a view to strengthening our due diligence in this area and also reforming our remediation processes:

• Sedex Sustainability Award – SBF is pleased to have won a Sedex Global Sustainability award in the category of Data and Insights in 2023 after becoming a Sedex member in 2019. Sedex is an organisation that provides an online platform for companies to manage and improve working conditions in global supply chains including in the area of supply chain transparency, risk assessment and ethical data exchange. This gives all within the Frucor Group motivation to keep collaborating with different stakeholders in order to promote human rights in our supply chain.
• Global Child Forum – SBF was also recognised as a Top 2 Company by the Global Child Forum. This forum has acknowledged us as a leader in our responses to Children’s Rights in comparison with 832 other global companies and when benchmarked against 27 indicators.
• Sustainability Awards – In 2021, Frucor AU achieved a Level 5 Beyond Best Practice Award from the not-for-profit Australian Packaging Covenant Organisation (APCO) as assessed against a Packaging Sustainability Framework. We believe our efforts to reduce the impact of packaging on the Australian environment demonstrate values consistent with reducing harm to people.
• Supplier Management – the Frucor Group introduced in 2021 a Supplier Segmentation Framework with the objective of managing suppliers based on their overall risk profile and the degree to which they can help us achieve our strategic objectives. Our strategic imperatives include improving our focus on safety and wellbeing and increasing the internal and external focus on sustainability. We look at the supply chain complexity of those we procure from, to understand how remote/distant the end source is. We also look at stability and predictability noting that volatility is connected to higher risks of modern slavery. We are looking to review tier 1 and 2 suppliers through this Framework.
• Human Rights – The Frucor Group in 2019 formulated a Human Rights Policy to further strengthen our commitment and promote human rights due diligence as well as engage employees and suppliers. The details are at this link. We held expert dialogues in 2019 and 2020 with representatives from global organisations such as Human Rights NPOs (CRT), the IHRB, the Danish Institute for Human Rights and the UNDP. We utilised information in those dialogues to further our due diligence approaches and as a result in 2021 we conducted third-party interviews of migrant workers in the Frucor Group’s Japan group company Izutsu Maisen. In 2023, the Frucor Group engaged in a dialogue with Human Rights Watch (HRW), to discuss assessment of human rights risks and responding to human rights issues. In 2023, we also received advice from human rights experts regarding the need to review the steps we are taking in light of the proposed Directive on Corporate Sustainability Due Diligence in the European Union.
• Modern Slavery & Human Trafficking Policy – This SBF Policy is applicable to all subsidiaries, including Frucor AU and enshrines the ethical standards we set ourselves in relation to modern slavery and human trafficking risks. It is acknowledged that SBF operates in various markets around the world and many different people are impacted by what we do. The Policy explains to our staff that we know because of the prevalence and nature of these crimes, modern slavery is happening across the markets we operate in right now. The Policy educates staff on signs of modern slavery and how to report any issues safely. It also details our mandatory training on these topics and that any employee who breaches the Policy will face disciplinary action.
• Human Rights Risk Assessment – the Frucor Group has also conducted a potential risk assessment in collaboration with Verisk Maplecroft, a global risk consulting company, for the countries in which our 90 factories are located, using general country and industry data, results available here.
• Supply Chain Mapping – Frucor AU continues to map its supply chains by categorising all tier 1 suppliers based on geographic location and the types of goods/services procured and then conducting specific modern slavery risk analysis. We believe that better understanding our supply chains will enable us to take more meaningful action in response to any risks identified.
• Staff Training – the Frucor Group has introduced several new online training courses which are compulsory for all staff to complete annually including on the topics of Anti-Bribery and Anti-Corruption, Conflicts of Interest, our Code of Business Ethics, and a topic entitled Doing The Right Thing. These topics all contribute to creating a culture of good and ethical governance which we believe will produce an environment that prevents and deters modern slavery.
• Code of Business Conduct (the Code) – the Frucor Group’s Code outlines the principles, policies and laws that govern the activities of SBF and its subsidiaries. Employees and others who work with or represent SBF directly or indirectly must adhere to the Code. The Code is distributed to all employees and others associated with the business of SBF, both at the time of commencing their involvement with the company and also through periodic updates. The Frucor Group acknowledges that its employees play a crucial role in its ability to promptly identify and respond to risks of modern slavery in its business and supply chain.
  
  The Code has always required adherence to local laws and stringent ethical standards including around bribery and corruption, privacy and appropriate use of employee information, auditing and expectations of suppliers, safety in the workplace, whistleblowing, corporate social responsibility and many other topics.
  
  In recent years the Frucor Group has added in a substantial section specifically regarding modern slavery. This section defines modern slavery and provides examples of same to assist with our employees’ understanding of this area so that they may effectively carry out our due diligence processes. It provides the Frucor Group’s commitment to ensuring there is transparency in its operations and approach to tackling modern slavery and to preventing, detecting and reporting on the risks of modern slavery in its operations and supply chains. This section specifically references various legislation and related materials including the United Nations Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework, the United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, and the ILO Convention (No. 182) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour and states that all employees must comply with the Frucor Group’s modern slavery and human rights commitments including being cognisant of same during third party selection, on-boarding and review. It provides for the maintenance of modern slavery risk related information, a whistleblowing service for reporting (detailed below) and disciplinary consequences of breaching the Code.
  
  All staff complete annual compliance training on the Code including on the modern slavery section.
• Whistleblowing – If an employee has concerns with wrongdoings at work, including any concerns regarding modern slavery or other human rights issues in Frucor AU’s operations or supply chain, we encourage them to voice these concerns through a confidential, independent whistleblowing system, which is available to employees via email or a telephone hotline 24 hours a day, 7 days a week. Frucor AU acknowledges that identifying risks of modern slavery can be a sensitive exercise for employees and encourages open reporting through this retaliation free hotline. In 2022, the Frucor Group introduced a new online Whistleblower reporting system called Speak Up, internally available to staff. We also launched an incident reporting application called Myosh, allowing staff to raise and report concerns in respect of health, safety and wellbeing and diversity, equity & inclusion (in particular in the LGBTIQA+ space). Myosh is confidential and not accessed by management. Our Australian Risk and Governance teams as well as Japanese and Asia-Pacific Governance teams review and investigate any reported cases.
• Modern Slavery Awareness Training – In further acknowledgment of the crucial role each our employees play in upholding our modern slavery approach, we have provided specific training to employees on identifying modern slavery risks in operations and supply chains, proper due diligence, and on our obligations under the Modern Slavery Act 2018 (Cth). Training on modern slavery will be provided on an ongoing basis through the Code of Business Conduct.
• Senior Leadership and Ownership – The importance of ensuring the prevention, detection, and combatting of modern slavery has been discussed and agreed at a senior level within Frucor AU, including the Frucor Group’s Executive Leadership Team, and Supply Chain Leadership, Internal Risk and Compliance, the members of each of which have confirmed their commitment.
• Supplier Guidelines – Frucor AU is also eager to identify, assess, and address risks of modern slavery within its supply chain. As such, it has in place Supplier Guidelines (the Guidelines) that set the principles for the network of suppliers to SBF. These Guidelines are accessible on our website at this link and contain our commitment to act with integrity. The first step of the approval process before any commitment with SBF is to commit to follow these Guidelines. To comply with these requirements, suppliers are expected to engage with their own partners, supply chain and subsidiaries and to require compliance with the Guidelines. For many years now these Guidelines have used the terminology ‘continuous improvement approach’, encouraging suppliers to strive to push their approach beyond one of legal compliance.
  
  These Guidelines speak to business integrity, bribery, corruption, retaliation-free reporting mechanisms, wages and benefits, working hours, anti-discrimination, freedom of association, health and safety and many other topics. The Guidelines specifically require the prevention of all child labour, involuntary labour, and any form of human trafficking as well as compliance with applicable child labour laws. The threat or use of physical, verbal, psychological and sexual abuse and discipline is prohibited, and suppliers’ employees must be provided with a right to remedy through an accessible and fair grievance process.
  
  Our Guidelines also allow us the right to access our suppliers’ factories/premises to check human rights and ethical compliance assisting in due diligence and remediation. The Guidelines require that suppliers are open and provide all information related to their business with SBF.
  
  We have recently added a schedule to our standard Master Frame Agreement that provides further details and requirements relating to modern slavery specifically in addition to the Guidelines. This schedule provides a definition and examples of modern slavery so that we may educate our suppliers and increase their awareness. It also provides for our commitment to ensuring there is transparency in our operations and approach to tackling modern slavery and to preventing, detecting and reporting on the risk of modern slavery in our operations and supply chains.
  
  The schedule requires that suppliers comply with applicable modern slavery laws which include, but are not limited to:
  
  1. Fair Work Act 2009 (Cth);
  2. Modern Slavery Act 2018 (Cth);
  3. Modern Slavery Act 2018 (NSW);
  4. Criminal Code Act 1995 (Cth), specifically, Division 270 or 271 of the Criminal Code, extending to conduct in and outside of Australia;
  5. Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework;
  6. Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children; and
  7. ILO Convention (No. 182) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour.
• We also require that our suppliers take steps to prevent, mitigate and remediate the risk of modern slavery occurring in their operations and supply chain and further that they comply with any reasonable requests we may make for assistance and information to aid in the review of their compliance. We provide for reporting mechanisms and notification of any breaches.
  
  The Guidelines and schedule to the Master Frame Agreement ensure that all suppliers on boarded ethically align with Frucor AU and its approach to Modern Slavery. These documents set clear expectations and therefore encourage the building of meaningful relationships with our suppliers so we can work collaboratively on our modern slavery approaches now and into the future.
• Supplier Evaluation Framework – the Frucor Group also monitors and conducts due diligence on its supply chain through a Supplier Evaluation Framework involving six key performance criteria. This Framework is utilised approximately once a year for each supplier. As part of this process we undertake a monthly Sedex review. The Frucor Group is working with Sedex to continuously assess risks existing in its global supply chain and conducting appropriate measures to mitigate those risks. The majority of the Frucor Group’s suppliers are already registered Sedex Members.
  
  This criterion also includes considering whether a supplier has an ethical supply chain, including whether it sources from high risk countries, whether it has signed up to any code of conduct, whether it has publicly available ethical supply chain goals, and whether it is an active contributor and partner to ethical supply chain practices.
• Supply Agreement – the Frucor Group further strengthens its approach to identifying, assessing and addressing modern slavery within its supply chains via its Supply Agreement, which our procurements team has implemented with several key suppliers. The Supply Agreement requires suppliers to adhere to basic principles, which more or less mimic those within the Guidelines described above. The Supply Agreement requires that Suppliers shall comply with the Guidelines and as such enact the Guidelines in a more mandatory format, providing the Frucor Group with contractual rights in the event of noncompliance.
• Outsourced Manufacturing Assessments – Only 20% of the Frucor Group’s manufacturing is outsourced. We note this figure is likely to decrease significantly in the near future and we will report on this in our next statement. Where we engage with external third parties to manufacture for us, we conduct thorough commercial and quality assessments upfront, as well as ongoing reviews of their performance against the agreed standards and expectations. We utilise some outsourced models for transportation of our goods but we regularly review these models to ensure any outsourced arrangements meet our stringent selection and performance criteria, which includes ethical considerations.
• United Nations Global Compact – SBF is a signatory to the United Nations Global Compact which contains ten principles in the areas of human rights, labour, the environment and anti-corruption. The ten principles are available here and are derived from the Universal Declaration of Human Rights, the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention against Corruption. Our commitment to the UN Global Compact is detailed within the Suntory Supplier Guidelines.
• Employee Rights – In the Frucor Group’s operations we strive to ensure that all employees have freely chosen their employment through the various mechanisms described above. We have a clear zero tolerance policy regarding any form of child, forced, bonded or involuntary labour. The Frucor Group utilises our employment contracts to try and ensure that all employees are able to leave their employment after reasonable notice and our compliance and human resources teams work to ensure we comply at all times with all applicable laws regarding wages and benefits for our workers.
  
  In 2020 and 2021, we also introduced for our employees a Cultural Diversity Team, a Flexibility/Hybrid working Policy and a Parental Leave Policy. We believe the stronger the rights of our employees the better our culture can deter and prevent modern slavery risks.

Criteria 5 (s16(1)(e)): Effectiveness

Frucor AU is adopting a continuous improvement approach to modern slavery, aiming to build on and refine its current capabilities in the future. We acknowledge that we cannot improve if we do not review our progress along the way.

The Code of Business Conduct (the Code) requires our employees to maintain modern slavery-risk related information. This allows us to keep a record of any new incoming material pertaining to our risks providing a database for review at any time. We also, within legal requirements, keep a record of any reports made through our whistleblowing hotline which can also be reviewed and analysed. Our modern slavery related training within the annual training on the Code for all staff is ongoing and as such we will be able to receive feedback and adjust the training and our broader approach accordingly in the future.

Our Supplier Guidelines (the Guidelines) require suppliers’ compliance with any requests for information relating to modern slavery that we may make. This allows us the ability to review individual suppliers’ compliance on an ongoing basis to understand whether they are following the Guidelines or whether the Guidelines are not as effective as intended.

We will continue to update our Code and Guidelines to ensure there is a clear and relevant articulation of our commitment to combatting modern slavery.

In 2023, the Frucor Group reviewed existing Human Rights frameworks as detailed above and captured at this link.

We utilise our Supplier Evaluation Framework on an annual basis, meaning that we are live to any issues arising with our suppliers including whether our Guidelines are effective, and that we also become aware of any new risks of modern slavery arising that we may cause us to adapt our approach. Our Supply Agreements typically operate for a term of one to five years. This means that at the end of that term, the contents and relationship are reviewed, and Frucor AU has the opportunity to consider whether any amendments are required to our expectations of suppliers.

Frucor AU takes full responsibility for ensuring we meet the standards that we have set ourselves, with support of our Executive Leadership, Suntory Group and others across the business, and we encourage all of our people to engage with, and fulfil, our values.

As part of our commitment to tackling modern slavery and human trafficking, we will continue to look for ways to improve upon our existing policies, procedures, ways of working and in promoting awareness with our employees and our suppliers. We will continue to expect that our suppliers and our partners share our commitment to tackling modern slavery and human trafficking and that they will seek to ensure that their suppliers do the same.

Criteria 6 (s16(1)(f)): Consultation

As stated above, Frucor AU does not own or control any entities. Frucor AU has consulted with external counsel in order to build our understanding and capabilities surrounding modern slavery.

Criteria 7 (s16(1)(g)): Other

Frucor AU would like to take this opportunity to state that we believe in fairness, respect and diversity and we are committed to keeping this at the heart of our culture, both now and in the future. As a business, we are committed to having a positive impact on the lives of our employees and consumers. We are equally committed to fairness and respect across our work force and within our supply chain.

Our brands and our products are trusted everywhere we operate, and our business is built on this foundation of trust. Modern slavery is a crime and a violation of human rights. As a business committed to acting ethically, honestly and transparently, the Frucor Group has a zero-tolerance approach to modern slavery and human trafficking.

Frucor AU makes this statement in accordance with section 13 of the Modern Slavery Act 2018 (Cth). Frucor AU considers that its Board of Directors are its principal governing body for the purpose of the Act. This modern slavery statement was considered and approved of by the Board of Directors of Frucor AU and signed by:

Darren Fullerton

CEO and responsible member of the Frucor Group’s Board of Directors and Principle Governing Body
Frucor Suntory Australia Pty. Limited.
Date: 28 June 2024