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Australian fruit and vegetable vendors face struggles with supermarket dominance

Lack of negotiating power, narrow avenues for export earnings, and a concentrated domestic market are issues Australian fruit and vegetable vendors are grappling with, as per insights from an Australian Competition and Consumer Commission (ACCC) inquiry. The industry's reliance on Coles, Woolworths, and Aldi has been highlighted, with tactics from these supermarkets limiting vendors' operations to the domestic market, according to the industry's peak body. The duopoly of Coles and Woolworths exacerbates the situation, presenting hurdles such as fragile export markets, international shipping complexities, and scant alternative income streams, testified by industry representatives including AusVeg's Lucy Gregg, fruit grower Peter Hall, and Fruit Growers Victoria's Michael Crisera.

Gregg pointed out the competitive nature of the vegetable industry, emphasizing the domestic consumption of about 98% of Australia's vegetable crop. Crisera noted the low export rates for apples and pears, despite some fruits like stonefruit, citrus, and grapes finding international markets. Suppliers' reluctance to risk their agreements with national supermarkets was underscored by Hall, alongside the challenges of compliance and high labor costs. "Our wage rates are probably the highest in the world," Hall remarked, also touching on the financial burden of transitioning to eco-friendly packaging due to the phase-out of single-use plastics.

Rejected vegetables typically go to charity, as repacking low-margin products is not viable, Gregg stated. She also mentioned the commercial implications of rejecting imposed price margins by supermarkets, leading vendors to be put on a so-called "holiday." The ACCC's inquiry, initiated by the Treasury Department, aims to scrutinize the workings of grocery markets in Australia, where Woolworths and Coles constitute 67% of national sales, and Aldi accounts for 9%.

Source: IBTimes

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