Rotten tales in Tassie

Fruit growers pressured by supermarkets, inquiry hears

Supermarkets have been accused of pressuring fruit growers to slash their prices so they can cut prices in stores.

The Greens-led Senate inquiry into the supermarkets has been told that one unnamed supermarket giant recently boasted to shoppers it was dropping the prices on fruit from $3.50 to $2.50 per bag, but then pressured its fruit suppliers to cut their own prices to fund the promotion.

Suppliers were asked to sell their produce for $1 a bag, Senators were told on Thursday in Hobart in the first public hearings for the inquiry, which represented a significant price cut and which the farmers believed was being used to pay for the supermarket chain to publicise its lower shelf prices.

The supermarket wasn’t named, but was one of the heavyweights, Woolworths or Coles, that are the centre of the Senate inquiry into supermarket prices and market power.

The accusation was made by Jeremy Griffith, council member of the National Farmers Federation, Horticultural Council, who was the first food and grocery industry executive to give evidence before the Senate inquiry and who was followed by Tasmanian farmers and agricultural groups, who complained about the behaviour of the large supermarket chains.

Woolworths chief executive Brad Banducci and Coles CEO Leah Weckert will be called before the Senate inquiry this month, where they will be grilled about market power, treatment of suppliers and allegations of price gouging.

Many farmers and farming groups have also lined up to appear.

Mr Griffith, who represents apple and pear growers, didn’t name the supermarket or the fruit that was discounted by the supermarket, but said his members had seen or received letters in the past few weeks asking for them to cut their own prices and fund the promotion.

Mr Griffith drew attention to the price negotiation system that oversees the commercial relationship between Woolworths, Coles and their suppliers.

For growers of fruit, a highly perishable commodity, prices and volumes were only negotiated in the week before harvest. This meant farmers “bear all the risk” when negotiating with the supermarket giants over the price and volumes they will sell into the chains due to the tight weekly window, Mr Griffith said.

Meanwhile, Tasmanian farmers did not feel there was a “sense of justice” in their ability to be paid fair prices for their produce by the major supermarkets that would let them make a decent return on the risks they take.

Nathan Calman, CEO of peak agricultural group TasFarmers, told the Senate inquiry that farmers felt the current supermarket and market dynamics were “very unbalanced” and that they were worried about their future.