Prime Minister Tony Abbott says SPC Ardmona plainly didn't need the $50 million it was asking from the Commonwealth and Victorian governments.
The fruit processor's future in Australia had been under a cloud, but was secured by a co-investment scheme with the Victorian government announced on Thursday.
The state government will give SPC Ardmona $22 million as part of a $100 million co-investment that it says will save the company's Goulburn Valley cannery in central Victoria.
The agreement came two weeks after the federal government knocked back a request to contribute $25 million to a $200 million package, which was to be topped up with $25 million from the Victorian government and $150 million in parent company Coca-Cola Amatil's own funds.
Mr Abbott says it is good news the company would be continuing, but the federal government's refusal of the company's request for $25 million was justified.
"The company originally said they wanted $50 million, they wanted $25 million from us and they wanted $25 million from the state government, but plainly they didn't need $50 million," he told Fairfax Radio.
"When you've got a parent company that made $215 million in untaxed profits just the last six months, why the commonwealth should borrow $25 million on the taxpayer to hand it over didn't seem too smart."
The Victorian government money will enable a refit at the company's Shepparton cannery and protect 2700 jobs.
Conditions attached to the government's contribution include that a minimum of 500 full-time equivalent employees are employed for three years and that SPC's parent company Coca-Cola Amatil contribute its $78 million.
SPC Ardmona is hoping a massive boost in sales, which occurred when the cannery's future was in doubt, will continue.
"If we can get the Australian consumer to keep on caring like they're caring at the moment... then we could well grow the people we employ," SPC Ardmona managing director Peter Kelly said.
"The future of all food manufacturing in Australia really belongs with the consumers."
