Australian fruit and vegetable producers have voiced their concerns regarding the dominance of supermarket giants Coles and Woolworths, highlighting the challenges of exporting produce as a significant factor limiting their market options. This sentiment was echoed during testimonies provided at an ACCC inquiry into supermarket pricing. Representatives from the industry, including AusVeg's Lucy Gregg, fruit grower Peter Hall, and Fruit Growers Victoria's Michael Crisera, pointed out the difficulties in navigating export markets due to their instability The competitive nature of the vegetable industry, characterized by high volumes and low margins, was underlined by Gregg, who also noted the stiff competition from other countries that diminishes export opportunities. Hall shared his personal experience of shifting focus to the domestic market following a diplomatic incident that closed off his export avenues to Taiwan. The reliance on domestic supermarkets is further compounded by the fact that a significant portion of vegetables, approximately 78%, are sold through Coles, Woolworths, and Aldi, making growers highly dependent on these outlets for distribution.
Labor and compliance costs were identified as additional factors making exports less viable, with Australia's high wage rates cited as a particular challenge for the fruit-growing sector. The testimony highlighted the sector's dependency on supermarkets, with Crisera noting the total reliance of fruit growers on these retail chains. The role of family farms in fruit and vegetable production was also discussed, with challenges such as labor intensity and the need for specialized equipment being key concerns that deter large corporate investments in horticulture.
The ACCC's inquiry, initiated by the Treasury Department, aims to examine the structure of grocery markets and the impact of supermarket practices on prices. With rising grocery costs contributing to the broader cost-of-living crisis in Australia, the inquiry seeks to understand the extent to which market concentration among supermarkets might be influencing retail and supplier prices. The ACCC's interim findings have highlighted the market share dominance of Woolworths, Coles, and Aldi, and the potential effects of oligopolistic market structures on competitive pricing.
Source: News.org.au