TASMANIA'S leading poppy processor has flagged it may expand into Victoria, to ensure supply for its American customers.
Tasmanian Alkaloids managing director Doug Blackaby told a TP Roberts forum at the Campbell Town show, Tasmania, last week, American customers were expressing concern about security of supply from Tasmania.
"It is creating anxiety in the American market in particular - they are insisting we look at diversity, " Mr Blackaby said.
"There are lots of questions about why we are looking at Victoria, in particular we are looking at Victoria because it does give us an opportunity to mitigate our risk and risk for our customers.
Tasmanian Alkaloids is the nation's biggest operator, running a plant at Westbury,Tas.
Pharmaceutical giant GlaxoSmithKline processes poppies at Port Fairy.
"Will it ever replace Tasmania? I suspect, in our case, the risk is very low, particularly if they are unable to get that productivity.
"Ultimately, if we can't convince the growers we are managing the supply risk adequately, that may, or may not, involve growing in another location," he said.
"They will look for another source of supply and that might involve Spain."
TPI Enterprises, another processor, moved into poppy production in Victoria last year, relocating and building an $8 million secure plant in the northern suburbs of Melbourne.
The plant is expected to open this month.
Mr Blackaby said Tasmania was still seen as the premier poppy growing areas in the world, due to being easily secured by air and sea, good farming practices and ideal climate.
"Globally, we are known as being as safe from illicit diversion as you can get," Mr Blackaby said.
"We are widely regarded as being able to supply on time and at reasonable rates," he said.
"Whatever happens in the future we need to make sure that is protected."
Tasmanian Alkaloids might also move back into the supply of morphine, for the European market, Mr Blackaby said.
"The European market itself is very much morphine based," he said.
"Our progress to date, in this space, has been promising and I suspect in the medium to long-term we will have a much stronger presence in Europe to what we currently do."
While Tasmania supplied 90 per cent of the world's thebaine, demand was dropping, due to changes in American legislation.
"Obtaining prescriptions (for thebaine based medicine) is particularly challenging over there, as doctors are not providing prescriptions as much as they used to," Mr Blackaby said.
"Company's making generics were gearing up to enter a particular market segment, but they didn't get approval for that - all these generics have built up stock and they are running through it," he said.
Mr Blackaby said he was sure the thebaine supply was cyclical, similar to that of opium, and would pick up again.
"Don't be alarmed, it will pick up again," Mr Blackaby said.