Supermarkets probe
The major supermarket chains are under pressure over prices as cost-of-living pressures increase. Image by Joel Carrett/AAP PHOTOS
  • politics

‘Unbalanced’ duopoly impacting shoppers, farmers

Andrew Brown March 7, 2024

The market power of supermarket giants has created an “unbalanced” situation for consumers and producers, an inquiry into grocery prices has been told.

The conduct of grocery giants Coles and Woolworths is in the spotlight after a parliamentary committee examining supermarket prices began hearings in Hobart on Thursday.

Supermarkets are being accused of alleged price gouging while cost of living pressures increase and shopping bills rise.

TasFarmers chief executive Nathan Calman told the inquiry the influence Coles and Woolworths had on supply chains made it difficult for producers to receive fair prices for their goods.

Fresh produce is seen in a supermarket in Melbourne
 Farmers groups say it is hard for fruit and vegetable producers to find buyers at short notice. Image by Diego Fedele/AAP PHOTOS 

“The current market dynamics which (producers) supply into are very unbalanced, and that makes them worried about the future not just of the businesses which they operate … but future generations,” he said.

“So many people feel scared to talk out and I think the overwhelming sense that I get from people as well is that they don’t feel like there is a sense of justice.”

Mr Calman said big supermarkets had the power to reduce prices paid to fruit and vegetable producers and pass on higher prices to consumers at the checkout.

“At one end of the supply chain, somebody can’t afford to buy something without stealing it … and at the other end you’ve got farmers contemplating suicide because they can’t receive a fair price,” he said

“If we were to try and redesign the system, it would be starting at the bottom … it definitely appears to be operating in the opposite direction and the lack of competition doesn’t help in that space.”

Jeremy Griffiths from the National Farmers Federation’s horticultural council told the inquiry the Coles and Woolworths duopoly was significantly impacting the industry.

“At this stage, every grower in this country feels they have almost no choice but to accept the price that is put on the table,” he told the inquiry.

The meat section at a Woolworths supermarket
 The Australian Competition and Consumer Commission is undertaking an inquiry into supermarkets. Image by Glenn Campbell/AAP PHOTOS 

“It’s a very, very tilted playing field and this has had profound impacts for the entire sector.”

Mr Griffiths called for the consumer watchdog to be given power to examine the data surrounding prices supermarkets set for buying and selling produce.

The Australian Competition and Consumer Commission is undertaking a year-long inquiry into whether consumers are paying too much.

The federation member said the low prices supermarkets set for buying produce had led many growers to consider quitting the industry.

“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 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 Griffiths told the inquiry the limited shelf life of fresh produce often meant growers were forced to accept the prices offered by supermarkets.

“The issue for our sector is our product’s perishable,” he said. 

“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.”

He said the supermarkets were acutely aware of the issue.

“It allows them to offer rock bottom … and offer take it or leave it prices, knowing full well that the growers have almost no choice but to accept the price that is on the table,” he said.

Coles has defended its prices, saying they were dependent on seasonal conditions and were a result of supply and demand.

Woolworths said it worked to strike the right balance between high quality produce and giving suppliers a fair price.  

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