Dr Sharman Stone at the SPC/Ardmona plant in Shepparton.

Dr Sharman Stone at the SPC/Ardmona plant in Shepparton. Photo: Ray Sizer

SPC Ardmona's $70 million deal to provide local fruit and vegetables to Woolworths was a ''win for people power'' according to a federal Liberal MP who called Prime Minister Tony Abbott a liar over the government's refusal to support the food processor.

SPC on Tuesday announced the massive contract to supply 24,000 extra tonnes of produce to Woolies, just months after the federal government refused the struggling country Victorian cannery $25 million in assistance.

The Victorian government then stepped in, providing $22 million to the company as part of a $100 million co-investment deal.

The agreement follows a big surge in sales of SPC canned goods that the company partly attributes to a grassroots Twitter campaign.

Backbencher Sharman Stone, whose electorate includes the Shepparton cannery, had been highly critical of the government's refusal to provide assistance, accusing the Prime Minister of lying when he blamed over-generous workplace entitlements for the decision.

Dr Stone said the Woolworths deal did not make it right to reject SPC's pleas for help.

''This deal wouldn't have even been on the table but for the massive customer response to SPCA's product,'' said the Murray MP.

''Why was there a massive Australian response? Because they agreed they did not want to see this company go down.''

Dr Stone described the consumer campaign as a ''cry from the heart'' from Australians who put ''their money where their mouth was''.

''They Facebooked, and texted and tweeted, and said go buy Australian preserved fruit,'' she said.

''It was about the power of the consumer. Woolworths responded to that because they're a clever company.''

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 on Tuesday.

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.

SPC Ardmona on Tuesday said the agreement to supply local fruit, tomatoes and beans was recognition that ''consumers really do care where their food comes from''.

''We are very grateful for the unprecedented loyalty being shown for our brands from everyday Australian consumers,'' SPC Managing Director Peter Kelly said.

He said the Woolworths agreement would start to help repair the major decline in SPC Ardmona's profitability.

The Victorian government also took credit for the turnaround.

''There is no question that the fact of the government being prepared to support the package with SPC has been the determining factor in this,'' Victorian Deputy Premier Peter Ryan told ABC radio.

''The company could well have been lost. That $100 million investment is now literally going to bear fruit.''

AAP