Rotten prices a growing burden

Supermarkets are raking in excessive profits by marking down prices on in-store products and then offering farmers less for the same item, an inquiry has heard.

Farmer lobby groups and vegetable growers told a hearing in Melbourne on Wednesday that retail giants were using their significant market power to set unfair pricing practices, to the detriment of food suppliers.

National Farmers’ Federation spokeswoman Charlotte Wundersitz said: “What we are seeing is the price changes in supermarkets are not being reflected in the prices that growers are being offered by supermarkets or the wholesale intermediaries in between them.

“To a degree, supermarkets are businesses; they pick the price that the consumer pays.

“When it becomes an issue is when supermarkets point to prices in-store as a justification as to why a producer might be getting a lower price.”

Earlier, it emerged that millions of dollars worth of fresh vegetables were being wasted annually due to “manipulative” non-binding supply deals allowing retailers to reject stock based on arbitrary grading standards.

According to Peak industry body AUSVEG, this has led farmers to lose up to $50m each year.

Chair Bill Bulmer said growers were at “breaking point” after two years of droughts, bushfires, global supply chain disruptions and Covid-19.

“Vegetable businesses must be paid fair and sustainable prices for that produce,” he said. “Instead, many growers are under increasing pressure from supermarkets to accept lower and lower prices, with many receiving the same prices they were five, 10 or even more years ago.”

Mr Bulmer warned that the country was at risk of becoming a net importer of fresh goods, pointing to survey data from January that showed up to 37 per cent of farmers were considering quitting.

“If we keep going down the path that we’re going we’re not going to hold or entice any young farmers,” he said.