TasFarmers chief executive Nathan Calman told the Senate inquiry into supermarkets that Coles and Woolworths were using their market power to reduce the price paid to farmers while simultaneously increasing prices for consumers.
“At one end of the supply chain, somebody can’t afford to buy something without stealing it,” he said. “At the other end, you’ve got farmers contemplating suicide because they can’t receive a fair price.”
National Farmers’ Federation horticulture sector representative Jeremy Griffith has told the inquiry that some growers have not received a price rise for 15 years. He said the negotiating tactics of Coles and Woolworths amounted to farmers being “held to ransom by a large corporate duopoly,” and the low prices they paid were causing widespread bulldozing of orchards and younger people leaving the industry.Next Generation Sees No Future in Farming
“The average age of every grower is getting way too old, because the next generation simply do not see a future in going into the agricultural sector, and that’s a massive issue for the whole industry, and dare I say, the whole economy,” Mr. Griffiths said.The Senate inquiry, which held its first public hearing in Tasmania on March 7, was told that the supermarkets imposed a tight window on price negotiations for perishable produce, which often meant growers were forced to accept whatever price was offered by supermarkets.
“The issue for our sector is our product’s perishable. Once it’s picked, once it’s ripe, the clock starts ticking. If it’s not sold within a certain time frame, it rots and it becomes worthless,” Mr. Griffiths said.
Forced to Cut Prices
Mr. Griffith said fruit growers were also told they would have to cut their prices to fund a promotion campaign.
“One of the major supermarkets announced last week that they are reducing their prices on a whole series of things,” he said.“They said they’re going to reduce the price of the fruit from $3.50 down to $2.50. The ... public’s point of view, is that’s great. The supermarkets have read the tea leaves, and they’re going to take a hit on their margins.
“[But] that supermarket has now written and advised all the growers on the mainland that they will be reducing their purchase price down to $1 per kilogram.
“This is how negotiations work. It is a very tilted process.
“The ideal policy solution is that you want policies in place to stop duopolies forming in the first place. Unfortunately, for us that boat has sailed.”
Mr. Griffith said vegetable producers who spoke out about the aggressive behaviour by supermarkets risked “commercial retribution,” and warned that Australia’s food security was under threat.
Farmers have also questioned why declining wholesale prices for meat have not been reflected in similar price reductions for shoppers. Wholesale sheep, lamb, and cattle meat prices fell by up to 70 percent last year—though there has recently been a partial price recovery for some cuts—but this was not reflected in supermarket meat prices.
He pointed out that the major supermarkets were often the only providers of essential products such as food and sanitary items.
Dumpster Dive, Steal or Starve
While some people were forced to look for discarded items in supermarket bins, or steal, “the other way that most people have power to control their grocery bills is by just not eating,” he said.
“The really damning thing that makes us all really angry is that supermarkets are making more and more money as it gets harder and harder for the rest of us.”
Amelia Cromb, also from the Grassroots Action Network, said a large amount of edible food is being thrown out by supermarkets.
“It just seems like such a cruel mockery almost that people are going to supermarkets to buy food that is a human right,” she said. “It’s criminal, there’s no other way to put it, it’s just unacceptable.”
She said some of the items had best-before dates months and even years after they were thrown out.
Coles posted a $1.1 billion full-year profit in its most recent full-year results, while Woolworths lifted its annual profit to $1.6 billion. Both results were more than four percent higher than the previous year.
