French catering giant Sodexo is battling the loss of major contracts in Australia's mining sector amid ongoing complaints about the quality of food served at its remote worker camps.
The company – which manages accommodation and food for fly-in fly-out (Fifo) mining workers in desert locations – posted a €10 million loss last year as it struggled to meet the expectations of its well-paid clientele.
Its woes deepened when a major contract with Fortescue Metals Group to manage camps at its Chichester iron ore hub in the Pilbara region of Western Australia was awarded to Canadian competitor Civeo.
"The food they serve is pretty much always disgusting, sometimes it's completely inedible and are meals I wouldn't even give to my pets," an unamed employee from Fortescue's Christmas Creek camp told newspaper The West Australian.
Sodexo’s flagship €1.5 billion contract with Rio Tinto, which serves more than 20,000 miners, is set to expire in 2026.
While the company is in late-stage talks to renew the deal, industry rumours suggest Rio management is under pressure to explore other catering options as competitors improve their offerings.
Rival Mineral Resources, known for its "seafood Fridays", has been rolling out an a la carte service at its camps to attract workers in a tight labour market.
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Service upgrade
Sodexo's setbacks have contributed to total losses of more than €100 million over nine years, despite its revenue more than doubling to over €610 million in the past decade.
In response to its bad press, Sodexo has launched an aggressive upgrade of its services, pumping €130 million of fresh equity into its Australian operations since 2017.
New offerings include American barbecue dishes like beef ribs and brisket at Rio Tinto's Gudai-Darri camp, while Asian chefs prepare Chinese and Vietnamese cuisine. The company is also planning to add yoga classes and hair salons to its facilities.
Rising costs have hit Sodexo hard. Labour expenses doubled over the past decade, climbing from €170 million to €312 million. Food costs, meanwhile, have soared to €141 million.
"Like any other player in the food and facilities management industry, we are not immune to the rising costs of labour and raw materials," said Sodexo Australia chief financial officer Abhi Shan.
While Sodexo struggles, Civeo has reported significant profits over the past two years and secured the Fortescue contract Sodexo lost in 2024.
Despite its losses, Sodexo is doubling down on its resources sector strategy.
The company has renewed key contracts, launched 20 new sites across Australia, and recruited chefs from India to address labour shortages.
